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Cedar Rapids Gazette (Newspaper) - July 29, 1974, Cedar Rapids, Iowa Jft'tift, ii.A.-*t. tv -ir The Odar Rapids Gazette: Mon , .lilly 21. 1974 By Sam Shulsky Q — It seems to me that good convertible debentures in natural resources companies should be safe in a possible depression and a hedge in c ase of uncontrolled inflation, but I'm probably missing some point. A — Theoretically, you are correct. In the classic approach to investing you would think that a security which enjoys the defensive qualities of a bond and the appreciation potential of a common stock would give you the best of both possible worlds. But a good deal of classic economics has been disproved in rec ent years Sam Shulsky Both bonds and stocks have fallen in market price in recent years. That's supposed to be wrong. High interest rates have not curbed inflation as we were taught years ago but, in fact, have seemed to feed the inflation Many convertibles have fallen materially in price because the rise in interest rates has made them less attractive as a bond and because the drop in common share prices has all but wiped out the value of their conversion privilege, or, at least, reduced it to little more than a far-off hope So, we come back to the old story: You can’t tell a book by its cover, nor rate an investment by its title. A triple-A bond rating has not protected the investor from a market decline; a “blue-chip” or “growth” label has not protected the equity investor from loss. I am not ruling out any form of investment. All I can contribute is the warning that one should not consider himself safe from Iocs merely because the word “preferred” or “convertible” or any other designation attaches to his investment. If you go shopping for convertible bonds, in fact, you must take more factors into consideration than when you buy a triple-A bond In the latter case, all you’re concerned with is: Can the company pay the semi-annual interest? Will it be able to pay off the bond at maturity? Wrhen you buy a convertible you must, of course, take these same factors into consideration. But, in addition, you must study the common shares and satisfy yourself that there is enough potential growth in the equity to add value to your convertible debenture If there isn't, why pay for the conversion factor? And — weighing quality against quality — the conversion factor does cost you money. Voting rights:    The shareholder’s right to cast a vote at the annual or special meeting of a company. Most common shares have one vote each Preferred shareholders may or may not have the right to vote Q — We are un our Ms with no plans for retiring soon When we do quit we will get social security and a pension We own some oil, food, utility and bank stocks I d like to liquidate all the stocks, take profits and reinvest in certificates of deposit to add to our present income. We would also be able to get the money easily if we needed it. A — A couple of your stocks are yielding less than savings certificates The utilities are yielding more I don t know the bank stocks. Frankly. I don t understand this wholesale change unless you are convinced stocks are going lower. Clearly, insured bank deposits carry no risk as to dollar amounts If you fear for your stocks, make the change. However, money in time certificates is not “easily” available unless you accept the penalty for cashing them in Tuesday: A new list of stoc ks which will help you set up a dividend-check monthly plan Mr. Sbultfcy welcomes written ques tiont, bul he will be able to provide answers only through the column For lists of growth ond dividend stocks, please include a self addressed, stamped en veiope Address your reauesfs to Sam Shulsky, core of The Gazette 3rd Annual Biggybank Bike Races Sunday, August 18th BeverPark You re all invited to see one of Americas fastest growing sports    Bicycle Racing See some of the American Bicycle League s top racers in action on the tough 8/10 mile Bever Park course. Also watch your friends and neighbors as they compete for ribbons and trophies In the public races, Sunday afternoon. Fill out an Entry Form and join the fun yourself. Free T-shirts for riders under 7. Free bike flags for riders 7 and older .,. it s for kids and adults alike. A great way to spend a Sunday. PUBLIC RACE SCHEDULE ABL RACE SCHEDULE Bush League Cookies Hotdogs Unicycles Young Adults Adults Jet Set 1 OO p m. 1:30 p.m. 2:00 p m 2:20 p m 2:45 p.m. 3:15 p.m. 3:40 p m. 200 yards 1 Lap 2 Laps As far as possible 4 Laps 6 Laps 3 Laps 2-6 (Separate races for each) 7-10 11-13 All Ages 14-17 18-25 26 and up OO a rn.    2    miles    Midget Race 15 a.m.    4    miles    Intermediate Race 30 a.m. 15 miles Women, Junior Men & Veteran Men Race 9:15 a.m.    25    miles    Senior Men Race (Class    III) 10:30 a m.    30    miles    Senior Men Race (Class    I    & ll) OFFICIAL ENTRY AND ATHLETE’S RELEASE (NON ABL RACE) REGISTRATION — This form must be mailed to Merchants National Bank or presented to the official s table not later than one hour prior to your event to receive your numbers. ENTRIES WILL NOT BE ACCEPTED UNLESS ON AN OFFICIAL ENTRY FORM In submitting this form for the event below, I do hereby for myself, my heirs, executors and administrators waive, release and forever discharge any and all rights and claims, for or to be. for which I may have or which may hereafter accrue to me against the Mercants National Bank. The Amateur Bicycle League of America. Inc., for the City of Cedar Rapids, and/or any other persons connected with the event individually or collectively, from all responsibilities for any injury to persons during this event PLEASE ENTER ME IN THE NAME_ RACE AGE ADDRESS (Street) I have a single speed bike    (City) I have a multi-speed bike    (State) SIGNATURE OF CONTESTANT__ SIGNATURE OF PARENT (if under 18) _ No printed signatures will be accepted Minors (under 18) must have parents or guardian s signature Entry will be refused if not property signed Merchants National Bank i:i Cedar Rapids. Iowa 52401 A BANKS OF IOWA' BANK ;

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