FINANCE AND INVESTMENT AFTER all, it seems, the political sceptics
have been right. Most people, including many who, in my view, were well placed to have known better, took for a clearer sky what was really only the prelude to the storm. The word recovery has almost died on the market's lips, and prices have, of course, fallen back fairly sharply. It is all very tragic, the more so after the rise which took place, not without a good deal of fan- ning from Westminster, only a fortnight ago. I cannot blame the jobbers or the investors, now licking their wounds, who feel genuinely aggrieved at the liberal dose of sunshine recently administered from Downing Street. Could sunshine talk ever have been more inopportunely timed ? Well, what of the future ? One thing is clear. Politics are back in the saddle and once again investors must make their own estimate of the political risk. Except on the most pessimistic view—that war is not merely inevitable, but close at hand— 1 see no reason, subject to the obvious desirability of being reasonably liquid, for throwing good shares overboard.
That this is the attitude which most investors are adopting is apparent from the general behaviour of the stock-markets which, although they have retreated, have shown no disposi- tion to panic. Indeed, apart from the inevitable closing of speculative " bull " positions and the sales of the "bears," the volume of selling has been quite exiguous. Whether investors are still hopeful about politics or are merely resigned—I think it is a case of half-and-half cannot be gauged, but they are showing a very praiseworthy fortitude. I, for one, do not advise selling unless an investor is con- vinced that the political prospect is nothing less than grim. And if the worst should happen, I cannot see any very great advantage in holding cash rather than equity shares.
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