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 the interesting discovery, from a series of tests that he applied to a large number of securities, that over a long period the investor in a diversified selection of common stocks, would have fared better in the matter of income than if he bought, instead of common stocks, such high grade bonds as were available at the time of purchase. And he gave the reason, which is beautifully simple and obvious when once it is pointed out.

Everyone who considers these matters has always known that ordinary shares, if one gets the right ones—a considerable "if"—are the pleasantest of all securities to hold because they grow in income and value. But Mr. Smith has first shown us the logic of the matter and why there is a probability that they should do so.

The reason why this increase is probable in the case of well-financed and well-conducted industrial concerns is not only the natural tendency of a good business to grow in activity and profit—which is likely to be checked by competition stimulated by its example, and is subject to the inevitable risks which all forms of industry involve in varying degrees—but by the fact that it is a canon of sound company finance never, except in times of acute depression or exceptional misfortune that is not likely