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CARRET & COMPANY'S PHIL CARRET
(continued from preceding page)
"Dime Savings Bank is a leading thrift institution in the New York metropolitan area. Its nearly 23 million shares had a stated book value of $26.73 a share on March 31st last. Some 70 institutional investors held over 70% of the outstanding shares. The regular 15¢ quarterly dividend was paid on September 5th last. The shares listed on the New York Stock Exchange are selling around $4-1/2."
"What's wrong with this picture? Is the Dime about to become another client of the Resolution Trust Company? I don't know. But I'll hazard a guess that it will not. If my guess is wrong, this country is in far deeper trouble than any of us has yet supposed."
Much to my surprise, I got paid - this time, anyway.
"The investor who stands before you pleads guilty to having bought Bank of New England shares for his own account far above their recent low of $1 per share. The rationale was simple: Unlike Bank of Boston, its competitor, Bank of New England had no Third World country loans on its books. Instead, as it turned out its lending officers had enthusiastically welcomed real estate developers."
"Incidentally, I have compounded the felony possibly by buying their long-term notes - their 9-7/8s. I bought some at $22 and then I averaged down at $15. I bought the first bonds on September 1st. And to my astonishment - and some degree of pleasure - they paid the interest on September 15th. I don't expect to get paid next March...."
"So much for big commercial banks."
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I hope that someone will explain the new innovations to me.
"We live in an age of technological innovation far surpassing anything ever known to an earlier generation. Even 20 years ago, who had ever heard of Primes, Scores, index options, or the triple witching hour? I hope someday someone will explain all of these to me."
"These gimmicks. however, have nothing to do with the speculative investment possibilities of sound, out-of-favor stocks."
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