Works by Hartley Withers
"Numerous instances of the Wisdom of Withers, culled from a ripe experience and put into literary shape by a trenchant, and occasionally caustic pen."—
Hints About Investments
By
Hartley Withers
Author of "The Meaning of Money," "Stocks and Shares," etc. etc.
Second impression
London
Eveleigh Nash & Grayson
Limited
First Published in 1926
Printed in Great Britain by
Northumberland Press Limited, Newcastle-Upon-Tyne
Contents
CHAPTER I
Investment—The Risk Involved—The Ideal to be Aimed at—Minimum Risk, Maximum Growth of Income and Capital—The Borderline of Investment and Speculation—Investment purely for Certainty of Income—Safety First—Risk for those who can afford it—Handing on the Problem—Creditor or Proprietor—The Ordinary Shareholder—His Chance of Growing Income—The Reserve Fund Policy—The Industrial Risk—A Half-way House.
CHAPTER II
The First Charge on Surplus Income—The Forms of Life Policies—Their Pros and Cons—Survivors Pay for the Casualties.
CHAPTER III
Investing for Income—Registered and Bearer Securities—Jobbing in Long Dated and Short Securities—Trade and the Rate of Interest—The Trade Cycle—A Dangerous Game for the Ordinary Investor—Its Expensiveness—The Risk of Depreciated Buying Power through a Rise in Prices—The Investor's Defence against it—Need he now consider it?—The Probability of Comparative Stability in Prices.
CHAPTER IV
Government Debts—The Prestige of British Government Securities—What is behind it?—The Limits on Taxation—What we Know or Think about British Credit—The Varieties of Securities Offered—Saving Certificates—Victory Bonds—Conversion Loan—The Qualities Desirable in Creditor Securities—Terms of Redemption—Sinking Fund—Municipal Debts—The System of Local Taxation—Its Defects and Dangers—The Assets behind Municipal Debts.
CHAPTER V
The Investment Powers of Trustees—Confined to Consols before 1889—The Extensions of the 1893 Act—The Colonial Stock Act, 1900—Other Additions—A Delusion concerning Trustee Securities—No Guarantee of Safety—Revision Desirable—Restriction to British Government Securities—The Advantages to be Secured.
CHAPTER VI
Difficulty of Estimating Taxable Capacity—The War Risk—Tangible Assets—Bad Borrowing and Lending—Why Governments Borrow—For War—For Public Purposes—Foreign Money an Expensive Luxury—Borrowing to meet Deficits—High Credit and Low Foreign Debt—Points to be Examined in considering Oversea Debt Investments—Impression and Instinct—The Question of Exchange—Liens and Pledges—State Debts—Municipal Debts Abroad.
CHAPTER VII
"Don't"—No Facility for Watching the Investment—The Hard Position of the Landlord—Length of Contract makes him vulnerable by Rising Prices—Injustice inflicted by Government—Right of Foreclosure—The Terms of Mortgages—Their Popularity with Insurance Companies—Their Disadvantages to Private Investors—Violent Fluctuations in Land and House Property Values.
CHAPTER VIII
Sir J. Stamp's Josiad—The Bass Example—A Jaundiced Critic—What is a Balance-sheet meant to Show?—Guesswork Involved—The Opinion of the Directors—Consequent Importance of an Honest and Prudent Board.
CHAPTER IX
What it Shows—Earnings and Expenses—Inevitable and Optional Charges—The Judgment of the Board—Book Values and Real Values—The Auditors' Limitations—The Directors' Record.
CHAPTER X
Back to the Bass Example—The Proportion Placed to Reserve—The Reserve Fund Policy—Capitalizing Reserves—The Test of Profit Division—As a Guide to Investors.
CHAPTER XI
Creditorship or Ownership—Company Debts—Right of Foreclosure—The First Floating Charge—Trustees for Debenture Holders—Railroad Mortgages—Investigation of Labels on Securities—The Preference Compromise—Its Weaknesses and Comforts—Participating Preferences—"Guaranteed"—Ordinary, Deferred and Founders' Shares.
CHAPTER XII
Falling Prices and Ordinary Shareholders' Profits—Mr. E. L. Smith's Investigation—Common Stocks v. High Grade Bonds—The Victory of Common Stocks—The Reason. Why—Some Exceptional Factors in their Favour—Caution in Drawing Conclusions—A Test of the Reserve Fund Policy.
CHAPTER XIII
Ownership with Reduced Industrial Risk—Banks, Discount Companies and Insurance Companies—Their Widespread Service—The Inevitable Demand for it—The Liability on the Shares.
CHAPTER XIV
The Westminster Balance-sheet—Comparison with an Industrial—Smaller Proportion of "Doubtful" Assets—The Big Reserve Fund—The Profit and Loss Account—Its Reticences—Fallacious Inferences. Therefrom—The Nationalization Risk—The Dividend Question—The Union Discount Figures—The Discount Companies' Function—Their Advantages.
CHAPTER XV
Their Attractions—A World-embracing Business—Its Complications—"Doubtful" Assets Scarce—The Investments—The Economist's Summary for 1924—High Prices of the Shares.
CHAPTER XVI
The Trust Company Principle—Wide Diversification—Their Attractions—The Edinburgh Trust's Career—Mr. Harman's Criticism of Trust Company Finance—Low Expenses—The Industrial's Full List of Investments.
CHAPTER XVII
Safety First—British Government Securities as Foundation—The Next Layer—The Ground Floor of Financial Ordinary Shares—The Upper Storeys—"Promising" Securities—Some Simple Rules.
CHAPTER XVIII
A Serious Problem—Social Danger and Bad Investment—What Can be Done?
This work is in the public domain in the United States because it was published in 1926, before the cutoff of January 1, 1929.
The longest-living author of this work died in 1950, so this work is in the public domain in countries and areas where the copyright term is the author's life plus 73 years or less. This work may be in the public domain in countries and areas with longer native copyright terms that apply the rule of the shorter term to foreign works.
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