|
VIII. LONG-SHOT SPECULATION-PURCHASE OF PROMO-
TIONAL SHARES IN HOPE OF GREAT GAINS 56
Growing Industrial Sectors 57
Resume 59
IX. SHARE PRIVILEGE SECURITIES-CONVERTIBLE BONDS,
CONVERTIBLE PREFERREDS, AND WARRANTS 60
Radio Corporation 3%% Convertibles 61
Buy Convertibles When Their Yield Is Highest 61
The Convertible Preferred 62
Reasons for Purchase and Issuance of Convertibles 63
Stock Warrants 63
Resume 65
X. INVESTMENT COMPANIES 66
Closed-end Funds 66
Open-End Trusts Called Mutual Funds 67
Rapid Rise of Mutual Funds 68
Marketing and Marketability of Mutual Funds 68
Commissions on Mutual Funds 69
Kinds of Mutual Funds 69
Advantages of Mutual Funds 70
Mutual Fund Management Companies 71
Public Offerings 72
The Principal Mutual Funds As of November 1,1960 72
Resume 75
XI. PUTS AND CALLS 76
Description of Put and Call Options 76
Examples of Uses of Puts and Calls 78
Puts and Calls for Defensive Purposes 79
Resume 80
XII. COMMODITY TRADING 81
, Commodity Markets 81
Speculative Advantages of Commodity Trading 83
Resume 84
XIII. DIFFERENT CORPORATE CHARACTERISTICS 85
Public Utilities 85
Railroad Regulation 86
Other Transport Forms 87
Banking and Insurance 87
Industrial Companies 88
Resume 88
XIV. DEVELOPMENT OF YOUR OWN INVESTMENT PROGRAM 90
Three Types of Investment Programs 90
Diversification 91
Sample Portfolios:
I. Conservative Income Program—Sample Port
folio of Common Stocks 92
II. Investment Program Stressing Income Less,
and Capital Gains More (Businessman's
Risks) 93
III. Investment Program for Capital Gains from
Long-Term Growth 93
Market Barometers 94
The Dow-Jones Averages and the Dow Theory 94
Dollar Cost Averaging 96
Resume 97
XV. SOURCES OF ADVICE AND GUIDANCE 98
Investment Dealers and Brokers 98
The Broker and Your Order 99
Other Sources of Information and Advice 99
Investment Counsel and Custody 100
Resume 101
XVI. THE SECURITIES AND EXCHANGE COMMISSION 102
Laws Administered by the Commission 102
Truth in Securities 103
Securities Act of 1934 104
National Association of Securities Dealers 104
Public Utility Holding Company Act of 1935 105
Other Laws Administered by SEC 106
Resume 106
XVII. MARKET PRECEPTS, PRACTICES, AND GENERALITIES 108
Leverage 108
When to Sell Stocks 109
Resume 111
XVIII. PLACING AND EXECUTING YOUR ORDER 112
Mechanics of the Stock Exchange 112
Unlisted Execution of Orders 114
Stop Loss Orders 115
Resume 116
|