Tabell’s Market Letter – November 25, 1949

TABEll'S MARKET LETTER 35 WALL STREET. NEW YORK 5. N. Y. Digby 4-4141 Despite the fact that the market reached a new high of 194.35 on Wednesday, the market shows increasing signs of technical deterioration. I mentioned in last week's letter that the short term indicator i, , gauge had registered an overbought condition and was very close to in dicating a short term sell signal. This signal was given on I'1onday. It must be stressed that this action applies to the shorter term gauge. The intermediate and longer term gauges continue favorable. Rather than a sharp correction at this time, would expect the usual early December irregularity caused by the various' cross-currents of tax-selling and switching. Would expect the lows to be reached near the middle of the month. Would take advantage of such possible irregu- larity or weakness to add to holdings in recommended issues. The airlines are one group that will probably be targets for some year-end tax loss selling as these issues have had severe declines from the 1945-1946 highs. I definitely like the airline issues. Their action may continue to be slow for a while but they are building up very strong technical patterns. From an earnings viewpoint, they appear to have turned the corner as witness the earnings for nine months ending September 30, 1949, as compared with the same period last year … , ' , ,, , Alaska Airlines AlTIer.Airlines, 3-t pf AlTIer. Airlines Braniff Airways Capital Airlines Eastern Airlines No.West Air, pfd No.West Airlines Pan Amer. Air United Air 4t pf United Airlines Western Airlines Last Sale 4 3/4 65 1/4 9 1/8 8 1/4 8 1/4 14 1/4 17 5/8 9 7/8 8 1/4 81 13 1/2 7. High 1945 – 1946 16 1/2 98 19 7/8 37 1/2 49 3/4 33 1/2 27 1/4 63 1/2 29 120 7/8 62 1/2 40 1/2 Earn.per sh.9 Months ended Se)2t.30 1949 1948 .39 14.84 .76 .02-d 2,77 .57 5.09 2.01 N.A. 28.60 1.16 .66 .42-d 8.54-d .69-d .01 .19 .32 5.44-d 2.99-d N.A. 2.52-d .27-d .75-d -1948 High d-deficit – 8 months ended June 30. – 6 months ended June 30. – includes non-recurring profit from purchase of debentu.re!-s-..—;7' ., ; . One service has calculated that earnings of all airlines in,the . September quarter increased 324 over the same period in 1948. This isi the largest percentage increase of any group. For the last year, or longer, individual issues in this group have /' been holding in a relatively narrow range. The chart patterns indicate persistent accumulation. I recommend the airline issues. for long-term , capital gains. The potential base patterns indicate the possibility of at least 100 appreciation in most issues over a period of time. They ,J should be bought on all price dips. . I believe they present greater long term price appreciation possi- bilities than such issues as Curtiss-Wright, flew York Central,Pepsi-Cola, j….. Lackawanna, St.Paul common, Kaiser-Frazer,Bldwin, Packard, Glenn Martin, and other depressed issues. A switch from Assues of thls type into alr- lines is recommended for tax-loss purposes. November 25, 1949 EDMUND W. TABELL WALSTON, HOFFMru & GOODWDI This memorandum Is not have an Interest In 50me to or be all construed III an of the securities offer or lolicitation of mentioned herein, The o'oHreer9l0tion9bumy atoernalelUhaasnybeseencurpirtieepsareFdrobmy.tuiJmell5 to time Walstn, Hof!man & Good;w,n may maHer of Information only. It IS based upon information believed reliable but not necessarily complete, Is not c;luarilnteed as accurilte or flnill, and u not Intended to foredole Independent Inquiry . . '. . . . . .., ….–.' .. . .'…. .. c…… – 1