Higgledy Piggledy Growth

Otherwise the sample consists of all companies charted by Moodies belonging to the following groups: Breweries * Building (including materials but excluding the sub-industries 'contractors' and 'road making materials') * Chemicals and Pharmaceuticals Cotton Textiles * Electrical Engineering, Radio, and Television Food * Motors (including components and distributors) * Mechanical Engineering and Shipbuilding Miscellaneous * Paper and Printing, Newspapers and Publishers Stores * Wool, Silk, and Rayon.N0TE.Those marked with a star are amalgamations of different sections published by Moodies, the purpose of amalgamating being to obtain a reasonably large number of companies in each group.Other groups were excluded either because I did not want them (Banks, Hire Purchase, Investment Trusts, Oil, Mining, Plantations), or because there were both less than 20 firms in the group and it could not be plausibly amalgamated with another (e.g.steel).'The miscellaneous group was already large enough without adding such firms to it.The total number of firms in the sample for this part of the paper was i.A second sample consisting of public companies of small size has also been used.This was selected at random from Moodies Index of Public Companies.Companies without a continuous record from 1951-59 were again rejected, and also those with trading profits of over 25o,000 in 1951.This limit was low enough to ensure that there was in fact no overlap between the samples.The figures used are throughout corrected for scrip and rights issues.This task was undertaken by Moodies Services, Ltd.2The figures from which the growth rates produced below are derived are in respect of three magnitudes:Dividends expressed as a percentage of equity capital.Earnings, net of interest, taxation, minority interests and preference dividends, (i.e.'earned for ordinary '), expressed as a percentage of equity capital.1 Financial and commodity companies were excluded because I thought it unlikely that they would exhibit similar laws of growth (if any existed) to those of industrial and commercial companies.The formula used is as follows: suppose the issue is 1 for n new shares at a price of pr per share.Suppose the last cum rights price is pc.Then the correction applied to pre-issue dividends, earnings, etc., is n+ 1 pc 14680084a,