Most investment trusts buy securities that they expect to pay dividends and increase in price, and then wait for their hopes to come true. Manhattan's Phoenix Securities Corp., run by a group of hard-headed businessmen (its chairman, bald Wallace Groves, is under indictment in a mail fraud case not connected with Phoenix), favors another technique. It often looks up an anemic corporation, gives it a financial blood transfusion and an infusion of hardheaded management and takes its fee in the form of options on shares that prove valuable if the treatment is a success.

In its last semiannual report (to...

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