Word: investors
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Dates: during 1950-1959
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Wall Street's golden bull added still more muscle last week. Shrugging off a nip at margin accounts by the Federal Reserve (see below), the U.S. investor drove the market to still another historic high. Led by some of the nation's biggest corporations, stocks on the Dow-Jones industrial average rose to 637.04 at midweek. By the final gong at week's end, profit taking had clipped only 2.51 points from the mark to put the weekly gain at 13.17 points...
...most Wall Streeters and nearly all stockholders like splits. A split produces an optimistic psychology among investors; it seems to promise that things are going well with the company, especially when the split is accompanied by a hike in the dividend. Corporations like splits because they keep the price low, broaden the market for their securities. Many an investor would rather buy 100 shares at $15 a share than ten shares at $150. Atlantic Refining was selling at $86 and losing stockholders when it split its stock in 1952. In the following few months its list of stockholders increased...
...informed investor thinks that there is the slightest risk that the Treasury will not be able to raise funds on some kind of terms. But Treasury officials know that their financing problems are a great deal bigger than outsiders realize. The chief source of the trouble is deficit spending and fears of more inflation. Not only did the Treasury have to make up for an estimated $13 billion gap between income and outgo this fiscal year, but by the end of 1962 it must refinance $129.5 billion in public debt, most of it incurred during World War II and Depression...
...Treasury must even compete with other federally backed obligations to find customers-often coming off second best. Many investors who once insisted on a Government bond are now happy to buy a Government-guaranteed mortgage. Not only is the interest rate higher than what the Government pays on bonds, but the investor does not have to wait until maturity date to get his money back...
Much of the responsibility for wildly gyrating stocks can be blamed on the exchange and brokers. A new investor's first purchase may be a staid mutual fund. Now, according to Mutual Fund Specialist Arthur Wiesenberger, fast-talking customers' men have been switching customers out of mutual funds into highly speculative stocks with the promise of quick killings. Many a customers' man will offer ways to get around the 90% margin requirements. Customers arrange loans with "specialized finance houses," which permit buying with only 10% down. It is this "easy money" that has caused some rapid rises...