Word: raskob
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Dates: during 1920-1929
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...major result of last week's Virginia election was to shake the hopes of Hoovercrats of holding 1928 gains in the south. Another result, no less significant, was the subsidence of "Raskobism" as an effective issue within the Democratic Party. "Raskobism" became more respectable, more reputable, than it had been since last November when some 160,000 voters in Virginia supported men who approved of John Jacob Raskob, chairman of the Democratic National Committee and intimate friend of Alfred Emanuel Smith...
...Reynolds Tobacco Co., Luther Blake of Standard Statistics Co., Walter P. Chrysler, Roy A. Hunt of Aluminum Co. of America, Matthew C. Brush, Walter S. Gifford of American Telephone and Telegraph, K. R. Kingsbury of Standard Oil Co. of California. William Wrigley Jr. and John J. Raskob announced that they were buying stocks...
...fact that very soundest stocks were selling at ten times current earnings and many a stock such as that of the General Motors Corp. reached a point where it was only five or six times current earnings. And General Motors, according to the once unchallenged statement of John J. Raskob, should sell at 15 times earnings. Quite aside from their relation to earnings many stocks sold at a point where their actual yield in dividends was higher than the yield of bonds. The following were typical of stocks which were purchased at a price to yield in dividends between...
...maxim used to be that a stock should sell, other things being equal, for about ten times earnings. The maxim now says "15 times earnings." This is known as Raskob's Rule, because one day in March 1928, John Jacob Raskob, then finance director of General Motors, walked up a gangplank on his way to Europe and remarked that 15-times was a proper modern ratio-that General Motors ought to have been selling at that time...
...Since Raskob's Rule came from a motor-maker, quidnuncs laughingly pointed to automobile stocks as they studied belated earnings reports for the first six months of 1929. Though many another stock was up to 20, 25 and even 30 times earnings, only three prominent motor stocks were selling at "15 times" or more. Many were below the ten times ratio even in the bull market of 1929. The following table shows recent prices of a number of representative automobile stocks and the price they would command at "15 times" according to first-six-months reports...