CHAPTER IL 
WHAT INFLUENCES THE REALISABLE 
VALUE OF STOCKS? 
In writing this chapter we have assumed that 
the reader is already acquainted with the 
various types of stocks which are in existence, 
and that he knows how they respectively rank 
for dividends and how they compare with one 
another in soundness and desirability. These 
points we have fully explained in How to 
Manage Capital, which is the companion 
volume to the present hook, and we need not 
repeat the explanation here. In the previous 
chapter we showed that in the selection of a 
stock for investment the chief characteristics 
to be considered are :— 
1. —The capital security which it affords. 
2. —Its income-producing power. 
These two questions have at all times 
received attention from all cautious investors, 
but their investigations have rarely extended 
beyond these two points. We now intend 
to explain the existence of a third influence, 
which is even more potent than the other