SPECULATION IN STOCK

Evening Post, Volume CXXXVII, Issue 128, 1 June 1944, Page 3

SPECULATION IN STOCK

DEALER AS STABILISER O.C. PALMERSTON.N., May 31. "The stock dealer or speculator is generally unjustly maligned, for he is actually a market stabiliser., His buying when the market is slumping steadies it from going too low, and his selling when the market is rising, checks an over-boom. Over a period a dealer's profits average a very modest sum per head of stock handled, for although substantial profits may be made on some lines, there are liable to\ be heavy losses on others." This defence "of the stock speculator was made by Mr. H. A. Seifert, ttue well-known agricultural writer, tonight, in an address on livestock mar- , kets to students of Massey Agricultural College. The speaker dealt with seasonal variations in prices, and stated that it was most desirable that all farmers should be capable of working out on paper, as opposed to making a general guess, the "true worth" of any class -of stock at any time. Usually, what was called "market value" approximated to "true worth," but at times it drifted considerably. Livestock markets resulted from a complicated massed judgment based fundamentally upon the law of supply and demand, he said. Values were determined by the worth of meat and wool, hides or skins to be derived from the fattened stock, by the state of feed available within the transport area, the quality of any particular offering of stock,' the varying influence of crowd psychology, and by the quantity of money in general circulation among the farming community. The foundation markets for the whole of the North Island were at Feilding and Morrinsville, and values of stock in other areas were to be assessed at plus or minus, according to.the freight cost to or from those centres. Winter fat stock prices were not so good as they looked, added Mr. Seifert. In the case of fat sheep it was particularly so, for the actual mutton price was obscured by the great worth of the skins carried by the sheep of that season. A fat wether sold for about £2 at the end of winter might be making no great premium over summer prices, on the actual price of its mutton. Whereas the skin of a freshlyshorn wether might be worth but Is 6d, a heavy skin of an August-killed sheep might be worth 13s or 14s. In the case of both sheep and cattle there had to be recognised the big feed consumption and added trouble involved in supplying the winter and spring markets. Analysed over a long period, it was evident that'the seemingly high prices secured by those supplying were really not unduly profitable; if anything they, had been rather on the low side;. Some compensation had, however, been derived by winter fattened—from a pride gained in securing big prices, and particularly did that apply when one "topped the market." The winter fattening of stock should not be undertaken on an extensive scale until one had had considerable experience gradually to work up to that state.