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THURSDAY, FEBRUARY 8, 1879

•* Detroit*, m^ity «mU ; pUata Bo InagK ml' oat that obc» rcroroj Mtooaotiae lBoiH Iomwb m tM\ VoBreatihle." Somewhere atoaf the Bw H Ml rirtim to dechoiag thmua4 - the remit of tit eow«fio«hl(. riamf errata oe aome other, qweatioaahle beachmarh of '‘propeaa." We're happy to report that Bo ■oeh aorrowfal fate haa befaBeai' -other - ami quite dtfferait -

apcnn ql Ike eoMr«vtihltf: the wmtihle boad. Sach bomk - mti their preferred stock coaatoiparte - are dhre, weO and floeririringaM two of the more popwUr inrestment dteraatiree

in stock brokerage

“shoWrooma’' *What acco

.' •• ■ ; for truly „ unforgettable dining pleasure HENNY’S; In Stone Harbor

Brings You SALAD BAR Complete New Lunch Menu & Hours! 1 1:30 - 4:00

97th St. & Third Ave. Stone Harbor 36S-2929

Winter Dining Hours Fri.&Sat. 5-10 P.M. Sundays 3-9 P.M. Closed Monday

Dlmimff Out Gmim§ Out Takimff Out

R9CK *N CHAIR • Little Chair open for lunch and dinner, serving delicious .meals, excellent service and cozy atmosphere. 26th It Dune Drive, Avalon. WHITEBRIER - 20th at the Beach. Serves lunch and dinner dally Ih a relaxed setting. -Music and dancing Wad. thru Sunday. ^ CAPE MAY GOLDEN EAGLE INN - Batch Drlw, Capa May. Eariy I Dinnar Spadala 5 PJP. (o 7 P.M. Spacial chlldran'a ith Opan.dally. - j RIO GRANDE 4 G'S RESTAURANT - Route 9, Rio Grande. Homemode Italian ahd seafood specialties. Delicious steaks. Complete take out service. Open dally for breakfast, lunch, dinner. jfta ' ' r ( MENZ RESTAURANT • Next to Fort Apache, Rio Grande. Specializing in seafood and broiled foods. Take out service available. Open dally 11:00 A.M. to 9 P.M:

STONE HARBOR HENNY’S RESTAURANT - The nautical atmosphere makes dining a delight. Luncheon and dinner dally. h WILDWOODS „ KURTZ RESTAURANT - Overlooking Sunset Lake. Specializes In seafood. Open daHy for breakfast, lunch and dlhner. REGENCY ROOFTOP RESTAURANT BnrthtaMngvMw of th, Oman - Beautiful Docor • Delicious Cuisine p rope red by Chef Mike Mullln. Uee musk. Open Wed. thru Sun. .VILLAS THE INN "BILLY MULLIGANS” ■ Loceted on Vllles on Beyahore Rood, e favorite family restaurant. CLOVER INN • Located on Ooverdale Ave., byrthe^ay, In vines. Open daHy for lunch and Inner. Entertainment Friday and Saturday. LOBSTER HOUSE - Enjoy a dockside view of fWilm boat, •ntertn, and leavin, the harbor, whlH dlnln, at the Lobatas Houee. Now opan 7 days. Luncheon and dinnar.

INFLATION INVESTING

provided by Alfred F. Bracher, 7r! and Thomson McKinnon securitiet, Inc. Member of the

New York Stock Exchange

I accounts for the

and popsderity of the convertible nveetment is that it trieb to, be al thk^s to al

investor*. Afthoogk H may not sncceed in Ibis endeavor in every case, it comes mighty dose most of the time, and certainly nobody, can faidt H for trying. First off, the convertible bond

stock. For example, a conversion price is set, always at a preminm to the prevaimg price for the common stock. If the common is selling for $20 per dtare. a reasonable coavenion price for

is a bond, pure and simple. It W the bond might be $25. That iasned by the corporation as a meats each $100 bond would be bond, and it can remain a bond convertible into four riiarea of as long ps the bu yer of it wiahre common stock ($100 dividend

- or until it is redeemed by the \ by 25).

issuer. Bonds, as everyone most But when sad how does H surely know, are promissory happen? Good question. So long

notes, corporate promises to pay or, more in the vernacular, just plain IOITs. In investment parlance they are fixed income investments which pay a fixed rate of return for a stated period of time and then return the invested principal on maturity

dale.

In a word, bonds are, or tend to be, safe investments because the payment of the interest - and the return of the principal - is enforceable by law. Failure of the corporation to do with its bonds what it says it will do and when it says it wil do it can be a mighty compelling reason.%o go out of business - to satisfy creditors, if nothing else. But the convertible bond does even more. At the option of the bondholder a button can be pushed and - presto, change-o - the bond “converts” to a^ common stock and all the risks and rewards ‘ it represents. Unfortunately, once the conversion from bond to common stock is made, the process cannot be reversed, but no investment could' be that perfect. A few more details are in order here. The convertible bond, when it is issned, haa special terms and conditions spelled out as (o when and how it may be converted to common

with a tower interest rate so its interest costs are kspt down. Secondly, most KmorafosM that issue mnvcrtftle bonds dever plan on paying them olf. They operate on the premise that the borrowed money wB nuke them grow farter and that the iaveators wS ultimately convert all tfkir- bonds to common stock to akare in the growth. So in truth they are obtaining lower coat equity money masquerading as debt Foully, there are aome occasions when market conditions are so difficult the only way for the corporation to raise money is by imomg the popular convertible debt issue*. So, if convertibles are as good for the goose as for the gander, fro there, then, any caveats? We’re glad you asked. We’d like to mention one or

two.

First, as ahrays, remember that only good corporations ■me good bonds - convertible or o thenrim. Don’t touch the other kind. Make sure the issue has at least q/ “BAA” rating, preferably higher. Also, if high

the price of the common

below the $25 level H nukes no

whatsoever to convert to

But when something

happens to move the price of the common to and above $25, the thoughtful bondholder gives the ■tuition a second look. Now he has a reason to think about conversion and a long upward (hopefully!), ride with the

common stock.

What makes the price of the common stock go up? The usual forces: wild-eyed rumors or speculative excesses - which the prudent investor would ignore and hold tight to his bond. Or riaing earnings and rising dividends (or the solid prospect of same) which the prudent investor would act upon and make the converrion to common. By so doing he would thereby enjoy a higher rate of return than afforded by the bond, not to mention a dunce for worthwhile price

appreciation.

But how about the corporation that elects to iame such convertible obligations? Is it a beneficiary, or a victim? We’re happy to report that convertibles are good for them,

too. Firat of all. by chooamg th« mvntmnit adUmnxat convertible route the oorikderablenote,

corporation probably can ret bv

CURRENT income is your main investment objective, “converts” should probably be avoided for, as mentioned, one doem’t get as much income bang for his buck as with stnri^it debt issues. Finally, make sure the company issuing the convertible debt has a record of conspicuous growth. That enhances the prospect for future growth and makes the conversion “event” a much more likely ponihility. In sam, the convertible issue comes very dose to giving the invertor a generous portion of cake and allowing kirn to eat H, too. In a sometimes very hostile inflation environment that is an

of

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rolden Eagle Inn , OCEANFRONT ST* CAPE MAY 884-5611 COMPLETE BANQUET FACILITIES LARGEST IN THE AREA Accomodate 25 to 400 BANQUETS WEDDINGS PARTIES

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Wildwood Craft

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25 to 300

Wedding, a Meetings a Parties Phone 729-6000 For Reservations

PHONE: 886-3430 Sftfu tsMutfltjani ®fie 3nn Gsektall Lounge dk Restaurant 401 BAYSHORE RD. VILLAS N.J. RESTAURANTS: WHY NOT A D VERTISE

ifitn

886-3795

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> Weddings • Banquets

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<8

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