increased because it is cheaper than cigars. A good cigar can again be bought for a nickel and the 3 for 10 and 2 for 5 stogies are back in popular favor. Office men and women take their lunch to work or go home during the noon hour instead of eating in town. It has become popular to wear old clothes—to brag about poverty and how much you lost in the 1929 crash. It is almost bad taste to give a big party or to drive a new car.
A good plan for the next 5 years would be to save and invest cautiously and plan to have funds in liquid form when the next crash comes.
Our wash-woman said yesterday was the first day’s work she has had in 3 months—her price is $2 instead of $3 and she is willing to work for almost anything she can get.
8/26/36
Looking back now this was a fair guess. Recovery has been moving gradually forward since the bottom was reached in summer of 1932. A spurt came in March 1935 and has continued to date. Bargains are still available in stocks altho they do not compare with what could have been done in 1932. The real estate taken back by the banks during past 5 years is still being liquidated at bargain prices but the choice is now limited. Rents are going up and it is probable that in another year the banks will have liquidated all their foreclosed real estate and then a more normal market will be established. As to the future—it is hard to say if we are heading for a boom or for a few years of normal business. The possibility of inflation makes a guess difficult.
SEPTEMBER 2, 1931
As nearly as I can make out from a study of past panics, the cycle of business is always moving down toward a panic or up toward a boom. It rarely for long travels in a straight line. At the present time we are clearly moving down and the turn has not yet come. In the making of investments it would also seem wise to wait for some sign of the upturn before jumping in. It is impossible to hit the exact turn but as long as things are still definitely on the downgrade there would seem to be no hurry. When the final upturn does come it seems to me it will continue up for 8 or 10 years and culminate in a boom and a crash. The wise investor will disregard the day-by-day fluctuations of the stock market or real estate market and base his buying and selling on these long periods of rise and fall. Above all, and I repeat it again and again—he must have liquid capital in time of depression to buy the bargains and then he must sell before the next crash. It is difficult if not impossible to do this but the conservative longtime investor who follows the general rule of buying stocks when they are selling far below their intrinsic value and nobody wants them, and of selling his stocks when people are bidding frantically for them at prices far above their intrinsic value—such an investor will pretty nearly hit the bull’s-eye. Among such investors are the Morgans, the Mellons and the Bakers. Their secret to a large extent lies in having liquid capital available and the courage to invest when things look the blackest. They say of Mr. Baker that he always bought good stocks when they sold below their intrinsic value—and then held on until the cows came home. It seems to me he took very little risk.
8/26/36
This advice was pretty sound. The turn in the depression came in the summer of 1932 and since then it has worked up—with numerous breaks—but always up. Here is what would have happened to a buyer of stocks in summer of 1932 as contrasted today:
Amer T &T 70 to 170; Yo Sheet & Tube 6 to 80; Warner Bros. 1/2 to 14; Western Union 17 to 80; U.S. Steel 20 to 68; Gen. Motors 8 to 100; Gen. Elec. 8 to 46.
SEPTEMBER 4, 1931
The Allied Council broke all records the other day by handling 1150 calls for relief in one day. There is no accurate record of how many people are on relief in Youngstown today but it is estimated at about 30,000—almost 20% of the population.
A good plan for the next 5 years would be to save and invest cautiously and plan to have funds in liquid form when the next crash comes.
Our wash-woman said yesterday was the first day’s work she has had in 3 months—her price is $2 instead of $3 and she is willing to work for almost anything she can get.
8/26/36
Looking back now this was a fair guess. Recovery has been moving gradually forward since the bottom was reached in summer of 1932. A spurt came in March 1935 and has continued to date. Bargains are still available in stocks altho they do not compare with what could have been done in 1932. The real estate taken back by the banks during past 5 years is still being liquidated at bargain prices but the choice is now limited. Rents are going up and it is probable that in another year the banks will have liquidated all their foreclosed real estate and then a more normal market will be established. As to the future—it is hard to say if we are heading for a boom or for a few years of normal business. The possibility of inflation makes a guess difficult.
SEPTEMBER 2, 1931
As nearly as I can make out from a study of past panics, the cycle of business is always moving down toward a panic or up toward a boom. It rarely for long travels in a straight line. At the present time we are clearly moving down and the turn has not yet come. In the making of investments it would also seem wise to wait for some sign of the upturn before jumping in. It is impossible to hit the exact turn but as long as things are still definitely on the downgrade there would seem to be no hurry. When the final upturn does come it seems to me it will continue up for 8 or 10 years and culminate in a boom and a crash. The wise investor will disregard the day-by-day fluctuations of the stock market or real estate market and base his buying and selling on these long periods of rise and fall. Above all, and I repeat it again and again—he must have liquid capital in time of depression to buy the bargains and then he must sell before the next crash. It is difficult if not impossible to do this but the conservative longtime investor who follows the general rule of buying stocks when they are selling far below their intrinsic value and nobody wants them, and of selling his stocks when people are bidding frantically for them at prices far above their intrinsic value—such an investor will pretty nearly hit the bull’s-eye. Among such investors are the Morgans, the Mellons and the Bakers. Their secret to a large extent lies in having liquid capital available and the courage to invest when things look the blackest. They say of Mr. Baker that he always bought good stocks when they sold below their intrinsic value—and then held on until the cows came home. It seems to me he took very little risk.
8/26/36
This advice was pretty sound. The turn in the depression came in the summer of 1932 and since then it has worked up—with numerous breaks—but always up. Here is what would have happened to a buyer of stocks in summer of 1932 as contrasted today:
Amer T &T 70 to 170; Yo Sheet & Tube 6 to 80; Warner Bros. 1/2 to 14; Western Union 17 to 80; U.S. Steel 20 to 68; Gen. Motors 8 to 100; Gen. Elec. 8 to 46.
SEPTEMBER 4, 1931
The Allied Council broke all records the other day by handling 1150 calls for relief in one day. There is no accurate record of how many people are on relief in Youngstown today but it is estimated at about 30,000—almost 20% of the population.
Similar Books
