Venturers' Corner
Is it necessary to point out that in present conditions the arguments advanced in this section of my notes should be regarded as being for information rather than for action ? Speculative shares are obviously more likely to fall than rise in price so long as high political tension persists ; would- be buyers should therefore hold their hands for the present unless by chance they are willing to back a view that the war-scare is ridiculous and will rapidly blow over. There are naturally some very tempting bargains in the Throg- motion Street window, but again I say, Don't buy just yet unless (t) you can easily afford the money ; (2) are prepared to see a further fall in price ; and (3) assess political appease. ment as more than an even chance.
With these preliminary considerations in mind, speculative investors might like to look at the position of Paterson, Laing and. Bruce 6 per cent. cumulative LI preference shares. This old-established merchanting firm, whose business is mainly in Australia, reorganised its capital last year. In consequence, the First Preference is quite a small issue and requires only some Liozoo to cover its dividend. Earnings depend largely on general conditions of purchasing power in Australia which, in turn, are closely related to the price of wool. Like other commodities wool is fetching less than at this time last year but at the present price is high enough to maintain Australian spending power at a satisfactory level. Already, the half-yearly dividend due on April 1st has been declared and I should be surprised if profits are not covering the full 6 per cent. rate by a sub- stantial margin. The LI shares are quoted around 12s. 6d. to yield over 9i per cent. At this price they seem greatly under-valued on the assumption that world trade is not
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