The stock market crash - and after

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Monograph

Identifikator:: 1815583320

URN:: urn:nbn:de:zbw-retromon-204544

Document type:: Monograph

Author:: Fisher, Irving http://d-nb.info/gnd/118533541

Title:: The stock market crash - and after

Place of publication:: New York

Publisher:: Macmillan

Year of publication:: 1930

Scope:: XXVI, 286 S.; graph. Darst

Digitisation:: 2022

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XV. Remedies and Preventives of Panics

Collection:: Economics Books

254 The Stock Market Crash—And After demand for this type of loan, to pay a high rate of interest; but looking back over several years we find that the rate was usually around between 3 and 4 per cent and has only occasionally risen above 6 per cent. This is as it should be, since, if the lender accepts only the minimum of risk, he should also receive only the minimum return. In my plan the accepter of the option agreement voluntarily assumes a certain share of the risk for which he receives a relatively high payment in return. The purchaser of these securities assumes the larger part of the risk, and is in a position to receive the larger part of the profit in the event of advance in price. He is also willing to pay more highly for the funds that he is borrowing, since he is assured of not being sold out in the event of a decline. It is essentially a method of financing purchases for the “long pull.” It is not suitable for the trader who desires to be in and out of the market. The volume of stock retained for long-term holding is probably far greater in total than that used by the trader, and were it lifted from the marginal loan system there would be little opportunity for a break of large magnitude to develop. But even should it develop, the makers of these option agreements would find their holdings undisturbed. There was one difficulty that I found, however, in making these option agreements. That was the lack of an organized financial institution equipped to make contracts of this character. It was therefore necessary for me to approach private investors, and

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