Quotes About Securities

There was a time when people thought that if you piled a bunch of mortgages together, the top of the pile was AAA. There are a lot of things that become consensus.

But in other cases, making allowance for conversion rights—and the existence of stock-purchase warrants—can reduce the apparent earnings by half, or more.

No borrowing to buy or hold securities. No increase in the proportion of funds held in common stocks. A reduction in common-stock holdings where needed to bring it down to a maximum of 50 per cent of the total portfolio. The capital-gains tax must be paid with as good grace as possible, and the proceeds invested in first-quality bonds or held as a savings deposit.

The real money in investment will have to be made- as most of it has been in the past- not out of buying and selling but of owning and holding securities, receiving interest and dividends and increases in value. pxvii

1. There should be adequate though not excessive diversification. This might mean a minimum of ten different issues and a maximum of about thirty.†

Principle for the securities analyst: Nearly every issue might conceivably be cheap in one price range and dear in another.

However, the risk of paying too high a price for good-quality stocks—while a real one—is not the chief hazard confronting the average buyer of securities. Observation over many years has taught us that the chief losses to investors come from the purchase of low-quality securities at times of favorable business conditions. The purchasers view the current good earnings as equivalent to "earning power" and assume that prosperity is synonymous with safety.

Know what you are doing—know your business." For the investor this means: Do not try to make "business profits" out of securities

An offering of New Housing issues in July 1971 yielded as high as 5.8%, free from both Federal and state taxes, while an issue of (taxable) New Community debentures sold in September

For most investors, bond funds beat individual bonds hands down (the main exceptions are Treasury securities and some municipal bonds). Major firms like Vanguard, Fidelity, Schwab, and T. Rowe Price offer a broad menu of bond funds at low cost.9

Securitizations exploded, with everything from lotto winnings to proceeds from tobacco lawsuits being turned into securities that could be sold to the investing public.

Make the financial industry pay for its mistakes. That's the idea behind the best of the Obama administration's reform proposals: If banks issue securities backed by mortgages, say, then require them to hold some of that paper so that they will bear some of the losses.

Many significant stock-price inefficiencies can occur when a company is spun off.

But seeing such truth can be dangerous. Philosopher Mary Daly reminds us, "It isn't prudent for women to see all of this. Seeing means that everything changes: the old identifications and the old securities are gone."21 The question, she says, is whether women can forgo prudence in favor of courage. That was the question that followed me as I made my way into the new year.

Windsor Horne Lockwood III, president of the prestigious investment firm of Lock-Horne Securities in midtown Manhattan.

Why should the court impose a judgment in a case in which the SEC alleges a serious securities fraud, but the defendant neither admits nor denies wrongdoing?

While markets are supposed to ensure transparency by showing orders to everyone simultaneously, flash orders are currently allowed because of a loophole in securities regulations that allows for immediate trades.

The U.S. stock market now trades inside black boxes, in heavily guarded buildings in New Jersey and Chicago.

The creation of the mortgage bond market, a decade earlier, had extended Wall Street into a place it had never before been: the debts of ordinary Americans.

By May 2007, however, there was a growing dispute between Howie Hubler and Morgan Stanley. Amazingly, it had nothing to do with the wisdom of owning $16 billion in complex securities whose value ultimately turned on the ability of a Las Vegas stripper with five investment properties, or a Mexican strawberry picker with a single $750,000 home, to make rapidly rising interest payments.

16 billion in complex securities whose value ultimately turned on the ability of a Las Vegas stripper with five investment properties, or a Mexican strawberry picker with a single $750,000 home, to make rapidly rising interest payments.

But the more we looked at what a CDO really was, the more we were like, Holy shit, that's just fucking crazy. That's fraud. Maybe you can't prove it in a court of law. But it's fraud." It

By early 2005 all the big Wall Street investment banks were deep into the subprime game. Bear Stearns, Merrill Lynch, Goldman Sachs, and Morgan Stanley all had what they termed "shelves" for their subprime wares, with strange names like HEAT and SAIL and GSAMP, that made it a bit more difficult for the general audience to see that these subprime bonds were being underwritten by Wall Street's biggest names.

It took us weeks to really grasp it because it was so weird," said Charlie. "But the more we looked at what a CDO really was, the more we were like, Holy shit, that's just fucking crazy. That's fraud. Maybe you can't prove it in a court of law. But it's fraud." It