To the Editor of the ""Nonu-Cuuwa Dany News." the press have referred to git local rubber share market, and ita investment potentialities, One. writer has talon three examples at random—Kroewoeks, Tanah Merahs and Tebongs—and expressed the opinion:—"that sornetone has an extremely expenciva baby to be foisted off on an ignorant someone else in the near future."
He also opines:—"I personally have no doubt that the present high prices of rubber shares are in no way justified by returns."
Disagreeing with his view, an eminent firm of sharebrokers' har one to some trouble to point that at present market prices an investment inthe above-mentioned cent panies should return an average of About 10 percent, by way of Further than this, they point out that:—"Some of our companies have fumused coupons in hand for a con siderable amount of rubber, which goes far to annulling the temporary Inconvenienco at whick they al placed due to the 20 per cent, out 'They record their opinion that:- "We cannot see. that anyone carrying the baby' in buying shares at the present moment, especially if, they sate financially strong enough to hold for w period of time."
Touching the soothing syrup the "Unused Couron". for those carrying rubber-babies, I note that. Measrs Symington and Sinclair of London in their report on the state of the rubber market for the week fended November 4, make extended reference to this anonyme, using the following sentences "The reason for the decline is to found in disappointment at the manner in which the unused export Ticences or coupons have been dealt with."
"So far og the imme into futare of the market is concerned, the fate there unused licences is more sin portant even than the 20 per cen cut"
"After the drop in prices. owing to the disappointment in the matter of coupons.
Rubber then stood at 1/782.
One gathers that a fosiing of disappointment. prevailed in - London regarding the magic of "Unused Coupons" in early November, and tone rejoices that no euch footings prevail in Shanghai on December 15 with rubber standing at 1/64d., for the local firm. of rol: ers alread: fainted. express the following epinion:—With the uncertainty of the situation prevailing locally, many new investors, both fore kin ard Chinese, axe considering: rubbers about the best lock-up for their money."
"They also give an interesting table of highest and lowest prices for. shares" since the September cement day.
roryocks 1' Movohs Tekegen Sah i G23 Dec, 18 354 1.60 "According to this table, dividends paid by the above three companies Guring the quarter amount to the suum of Tis, 55,000.
Now in order to ge! a general dirds-eye view of what the above actuation mean during the past three months, and tke relative Aividend—return to investors—one can tabulate as follow
Kroowoeke 58,00 @ 36—'81,925,000 Shaves Bt, Moras 1,800,000 @ 1.80—¥2'340,000 etonss" "Hulo00 @ 4 1082 011,000 solstice Dee. 18 6.724.000 arkst values, Oct. 25" 89850.
inese figures enable one to envi ego the tedious pastime of holding the rubber-baby' in. the following!
"In three months three Shenghat companies have "depreciated "Ti. 452,000 in_market valuation, hat have. accretioned Tis, 88,000 dividends.
Tu the two months, since October 26, these same companies have depreciated Tie. 2,261,000 is mark atudtion, with "aecect'on of Tis, 35,000, in dividends, Whether it is worth while to pay via, 2,209,000 in cash in two month to tective Tis, 68,000 ju dividends Imatter of taste, of course It is cheaper, naturally and obviously, merely to pay Tis 450,000 cash in three monthe to receive that Tis, 55,000 in dividends.
But the puzzle is—whether the securing of dividends in this way really worth the cost?
T draw the conclusion cha Shang-Thai investors are like the deluded animal in the fable who, having a good piece of meat in his mouth, walks on a plank over the water i which he sees the reflexion of another piece of meat—so he drops what he has, and pursues the reflected mored.
Tt seems to me that seekers after wealth are at present concentrating on working out their nine, 10, oF 12 per cent. and so on in terms of [return on capital in dividends.
Experts minister diligently to this pursuit rendering it abandan'ly lear and easy for them to do s0.
But, is this the whole of the story?
Would it not be equally interssting—even profitable, perhaps—if Shanghai investors would calculate as to the other factor—viz., loos of] capital in securing dividends?
1 I spend Tls. 2.260,000 in couple of months to make Tls. 55,000—do I make a profit, or a Toss?
If I am economical and only spend Tle, 450,000 in three months: to acquire the Tis, 65,000 prize piece of meat—what, peradventure is my percentage of gain in dividend. requiring-experience as compared with my loss in coot-cash?
On the answer to these two con-un drums will depend the answer to, a. third:—Is the cost of gaining Tocal market experience worth the cash you get in dividends?
T have no idea, I leave the solution to eminent experts and financial wizards who have these: things at their finger tips, and who! can spiflicate my. little sums. in! elementary arithmetic by bewilorting me with visions of Unused Coupons and other" sources of wealth, We do not doubt that dividends! are paid to us—for certainly they. are—but the perplexity which haunts us is:—Does it pay ws to be) paid these dividends!
T am, ete,
Text read from the printed page and cleaned; old type leaves the occasional error.