The careful investor (1914) PDF book by Edward Sherwood Mead
Excerpt:
American investors, under our crude and careless methods of finance, have lost incalculable amounts of money by purchasing bad securities. Not alone has the "get-rich-quick" company preyed upon the investor, but hundreds of millions have been lost in the bonds and stocks of the railroad, public-service, and industrial corporations — securities often issued under the auspices of responsible and respected banking houses, but which, either because of defects in the securities which a careful preliminary examination would have disclosed or because of bad financial management, have failed to come up to expectation.
Made wise by costly experience, the American investor has grown critical in recent years. He is disinclined to speculate. He looks for security before income. He asks many questions concerning assets, earnings, the quality of management, the strength of franchises, the extent of monopoly control possessed by the companies into which he puts his money. It is no longer easy to victimize him with junior lien mortgage bonds or wit!
inflated stocks.
Investment bankers have also learned that a reputation for sound judgment as to the value of the securities which they offer is their greatest asset. Competition for the investors* money is growing constantly more strenuous. Salesmen are quick to seize upon the weak points in the securities offered by other houses. The banker cannot afford to take chances by selling bonds of whose merits he has not thoroughly satisfied himself.
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