Stockbroking Today PDF
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STOCKBROKING TODAY STOCKBROKING TODAY ]. DUNDAS HAMILTON WITH A FOREWORD BY HAROLD WINCOTT INVESTORS CHRONICLE AND STOCK EXCHANGE GAZETTE Palgrave Macmillan © J. Dundas Hamilton 1968 Softcover reprint of the hardcover 1st edition 1968 978-0-333-08551-6 Published by MACMILLAN & CO LTD Little Essex Street London w C 2 and also at Bombay Calcutta and Madras Macmillan South Africa (Publishers) Pty Ltd Johannesburg The Macmillan Company if Australia Pty Ltd Melbourne The Macmillan Company if Canada Ltd Toronto ISBN 978-1-349-00574-1 ISBN 978-1-349-00572-7 (eBook) DOI10.1007/978-1-349-00572-7 TO F. W.R.D. CONTENTS Foreword by Harold Wincott ix Introduction xi PART ONE: STOCKBROKING TODAY 1. The Industry and the Profession 3 2. Sales-and-Service 20 3· Production 47 4· Research and Statistics 104 5· Finance 119 6. Fixed-Interest 135 7· New Issues 150 8. Foreign Securities 180 9· Stockbroking as a Profession 196 PART TWO: STOCKBROKING TOMORROW 10. The Investor of the Future 209 11. The New House 216 12. The Specialist Departments 227 APPENDICES I. Institutional Assets and Share of the Market 289 2. Scale of Minimum Commissions 289 g. Quotations on the London Stock Exchange 289 4· Table of Charges for Quotation 289 5· Contents of a Prospectus 289 6. General Undertaking for Companies 289 7· Dealing in the United States 289 8. Dealing in Canada 289 g. Dealing in Australia 289 IO. Dealing in New Zealand 289 I I. Dealing in Belgium 289 I2. Dealing in France 289 I g. Dealing in Italy 289 I4. Dealing in West Germany 289 I5. Dealing in the Netherlands 289 16. DealinginDenmark 289 vii viii CONTENTS 17. Dealing in Sweden 289 z8. Dealing in Norway 289 zg. Dealing in Switzerland 289 20. Dealing in Austria 289 2 I. Dealing in South Mrica 289 22. Dealing in Japan 289 23. Dealing in Israel 289 Glossary 209 Recommended Reading 216 Index 227 FOREWORD THE shelves of my bookcase are full of books about The Stock Exchange. Almost all of them are descriptive, intended more for the layman than for the professional. Inevitably, therefore, they tend to be superficial rather than penetrating and con structive. This book by my old friend Dundas Hamilton strikes a new and to my mind very topical note. Britain, plagued by a succes sion of no fewer than seven severe economic crises since r 945, is now in a mood to examine the structure of her industry and commerce more critically than ever before. The little Neddies are doing the job in industry; the Prices and Incomes Board has examined or is examining our building societies, our banks and our solicitors. Age-old practices and habits and structures are being questioned. This is often an uncomfortable business for those with preconceived ideas, but it can be salutary. The great merit of Dundas Hamilton's book seems to me to be that here we have a detached and impartial survey and analysis ofwhat is, as Mr. Hamilton himself points out, at one and the same time an industry and a profession. The Stock Exchange, which I have been observing and commenting upon now for nearly forty years, has, to its credit, never believed itself to be perfect, has always been engaged in a process of continuing reform. But it has always insisted that the reforms should come from within. The Stock Exchange itself should therefore welcome Mr. Hamilton's ideas, for they are essentially practical and born of long experience of The Stock Exchange and stockbroking and the needs of the clients. But the community at large should welcome his ideas too. For without an efficient Stock Ex change and modern, sophisticated stockbrokers, the capital market on which British industry depends cannot do its proper job. That capital market is, in fact, the envy of many of our competitors in Europe and elsewhere. If it is to maintain the lead it has established, it will have to take good account of the ix X FOREWORD constructive suggestions in which Mr. Hamilton's book abounds. HAROLD WINCOTT Investors Chronicle and Stock Exchange Ga~ette INTRODUCTION WHEN I was first asked to write a book under the title Stock broking Today, it seemed to me that three principal questions required to be answered: What was the purpose of the book? For whom was it to be written? What, if any, were my own qualifications for undertaking the task? The purpose was perfectly clear. Many books have been written about investment and about the operation of stock exchanges, both in the United Kingdom and throughout the world, but none about the actual day-to-day work in a stock broker's office, and very little seems to have been published to erase the pre-war image of the typical stockbroker. In this book I have ende.avoured to lift the veil a little and to show that the efficient stockbroker of today must first and foremost be a technician, expert in his trade or a specialist in part of it. The readership is intended to cover almost all those interested in investment, but particularly the student who is considering stockbroking as a career. It is proposed in the future that new entrants to all Federated Stock Exchanges shall be required to pass an examination. This book is not intended to provide the answers to all the technical questions set out in the draft syl labus. It is designed, however, to give a background to the profession of stockbroking, bridging the gap between a purely technical manual and a general study of the subject. Finally, my own qualifications for writing on this subject are lamentably few. Almost exactly twenty-one years ago I became a clerk in a small firm of stockbrokers, whose total numbers amounted to eight, equally divided between partners and staff. It was an excellent grounding, for everyone was forced to cover almost all the facets of the business. Five years later I left to join a medium-sized firm, which later amalgamated to become a much larger and more decentralised organisation. I have been fortunate, therefore, in gaining experience from firms of all sizes and recently from the particular problems of manage- xi
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