Word: raskob
(lookup in dictionary)
(lookup stats)
Dates: during 1960-1969
Sort By: most recent first
(reverse)
...United's president. United was eventually merged into General Motors and Durant was ousted by the Du Pont family, already large G.M. stockholders. New President Pierre S. Du Pont asked Sloan to stay as operations vice president; he had undoubtedly been influenced by Du Pont Director John J. Raskob. "There," said Raskob about Sloan, "is a man who should be President of the United States. He never will, because he is not colorful enough...
Ever since Wall Street's Blue Monday crash, economic sages ranging from mutual fund managers to Treasury Secretary C. Douglas Dillon have been recalling the late John J. Raskob's half-forgotten rule of thumb (TIME. June 1) that even the stock of a promising company should be priced at no more than 15 times the company's per share earnings. If that ratio held, the warning ran, the Dow-Jones industrial average would have to sink to 540. Last week it fell even farther than that; in five days of almost unbroken decline...
...classic way to gauge a stock's worth compared to its price is the price-earnings ratio, i.e., its market price in relation to profits per share of the company. In the late 1920s, Al Smith's good friend John J. Raskob, who then functioned simultaneously as an officer of Du Pont and General Motors, shocked the investment world by allowing that under favorable circumstances a stock might be worth as much as 15 times earnings. (Despite this bullish tenet, Raskob, like the President's father, Joseph Kennedy, saw the 1929 crash coming; unlike Kennedy...
...their peaks, such stocks as IBM. Texas Instruments. Xerox and Hewlett-Packard climbed to anywhere from 80 to 120 times earnings. Raskob was a piker. Some companies such as Itek and Farrington became glamour stocks even while they were still operating in the red. And as investors became more and more intoxicated by growth, the inflation in price-earnings ratios spread across the board, from speculative risks to the conservative blue chips. Such companies as General Electric. Johns-Manville and International Paper saw their stock prices rise even though their per share earnings failed to increase-or even declined...
...remain uninterested in heavy buying, stock prices could scarcely help falling even farther. And in the mahogany board rooms of 'the mutual funds and banks last week, there was growing talk that the right time to buy a stock is when its price-earnings ratio gets down to Raskob's 15 to 1. Since the earnings of all 30 Dow-Jones industrials were running at an annual rate of $36 in the first quarter of 1962, scrupulous adherence to the 15-to-1 rule, notes Executive Vice President Charles Bliss of the Bank of New York, would mean...