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

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XVI. The Hopeful Outlook

Collection:: Economics Books

The Hopeful Outlook 261 senior securities. That is, the common stock absorbs the advantage which bonds, because of their fixed return in dollars, cannot absorb. The common stock will go up to the extent that the bonds and preferred stocks cannot go up. A Public Schooled in Borrowing There had been an initial rise in the value of common stocks because the dollar had depreciated in purchasing power during the war, and here again common stocks, because of this equity principle, absorbed the lion's share of increased dollar earn- ings. It was not until the general public realized that stock prices should rise even faster and higher than the rise in the post-war level of commodity prices that the great boom in common stocks began. Investment had also been encouraged by the war “drives” to promote the sale of government bonds. The public had been trained to “borrow to buy bonds” and from that it was but a step to borrow- ing to buy common stocks. After the war and post-war inflation and deflation came the stabilizing of all prices on a higher level, and on top of this stabilization came the marvelous increase in the rate of production, with resultant rises in earnings and in the rate at which earnings were plowed back into business. All this justified the expectation of prosperity and boosted the stock price level still higher. Industry had found that in its research laboratories, staffed by scientists from

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