Viewing Month: December 1950

Tabell’s Market Letter – December 01, 1950

Tabell’s Market Letter – December 01, 1950

Tabell's Market Letter - December 01, 1950
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, ,Wolston.Hoffmon& Goodwin, NEW YORK 5, N, Y 35 Wall Street DIGBY 44141 PHILADELPHIA 2, PA 1420 Walnut Street PENNYPACKER 55'77 TABEll'S MARKET lETTER LOS ANGELES 13, CALIF 550 South Spring Street MADISON 93232 SAN FRANCISCO 4, CALIF 265 Montgomery Street SUTTER 1-2700 The market moved in a'wide 'range during'the past week. From a high of 236.06 'on Monday, the industrial average aeclined to 223.82 on Wednesday and subsequently retraced about half of the decline to reach a high of 230.42 on Friday. The market has been swinging back and forth in a wide range for ovr ,'two months. Since October 1st, the market has had ten moves up or down of five pOints or more. At this week's low of 223.82, the industrial average . had almost retuned to the August high of 222.17. It is tt,(Se nervous rapid moves that l-;-'c caused me to be extremely cautious in recent letters. Since mid-Septembel' the market has been ;-.ing 'ing back and forth in a range bounded by the Novemter 26th high of 23 .63 and the November 6th low of 220.59 on the industrial average. On several composite averages, particularly on the New York Times 50-Stock Combined , ,average, the market has made a triple top at the highs of 157 reached twice in October and on November 24th. As a result, a very sizeable potential top has been formed. From a technical point of view, a downside penetration of the 147 low of November would indicate the possibility of a decline to 137 followed by 124. Translated into terms of the Dow-Jones industrials, the first figure would mean about 210-205 and the second about 195-190. The graphs of individual issues seem to indicate that the first figure is the more probable in the event of a downside penetration. The graph patterns of individual issues show quite diverse patterns. Quite a number of issues show vulnerable patterns similar to that of the averages. Other issues show only minor tops and even in the event of a general market depline should meet support not much below present levels. There are many issues of this type that we are still retaining in our recommended list published in last week's letter. Examples are National Supply, Bullard, Fruehauf, Lowenstein, Fansteel,and some of the airline issues. Most of these stocks have had only moderate advances. Other issues have had sharp advances and have reached their upside objectives. We have advised profit taking in these issues in our recommended list. Examples are General Motors at 54 and Standard Oil of New Jersey at 90. There are other issues that have advanced sharply but have not yet reached their objectives. These issues are still retained. For example, Reynolds Metals recommended at 22 and again'2t 33 reached a new high of 42 3/4 on Friday. However, it has not yet reaeLed its ultimate objective. Some consolidation may be needed in issues of this type before the advance is resumed. There is no change in the general advice of this letter. Would con- tinue to be 60 liquid in intermediate term trading accounts and 25 liquid in investment accounts. Would make no new purchases except for very short term trading purposes until the market declines or the pattern clarifies. In last week's letter we listed the better grade and medium grade issues in our recommended holdings. We did not have room to list the speculative group. This group is listed below. The figure in parenthesis is the originally re,commended level. The other. figure is Friday's close. SPECULATIVE GRADE American Air (9 3/4) ll, American Air,pfd.(68) 72, Amer.xport Line (23) 17, Amer.& Fgn Power,2nd pfd.(14) 15 3/4, pcan fWeoleng 33 1/8, BGnu\-1-um7(-) 29L Braniff Air 8) 10 3/8,-Btldd-G-G'- (9) 15, Capital Air (9 3/4) 9 7/8, Central Fdry. (lO2'l 7 7/8, Gfticagcr;- Ind& i 14 7/8Deny 16 1/8, .- las cic StoJ Nut (9 1/8) . 10L ande 2 Eversharp ( ) 10 464 3/ , 8 ) Eastern Air.(15 3/ 14, Goodall-San- 8 ford (14) 16 3/4, GruJ Mfg. ( 10-9) 10, G-1rl.-f,MeM-l 111 /iH 19 3/8, Long Bell Lumber A (27) 24, National Air.(8) 11, Northwest Air.(12 3/) 10 3/4, , Pan-Amer.(9 3/4)8 7/8,'R-K-0 (7) 7 3/4) Reynolds Metals (22-33) 42, L s- Servel (13) 8 3/4, Spiegel (9-11) 11, Sunshine Mining (10 Stores,2nd 1/8) 10 pfd.(lO 1/8 3/4) T1W0A, (17) 18, Western AiUrn.i(t8ed) Air.(14 10 3/8, 3W/4y) an18'ot7te/8,(1U4)ni1te3d. December 1, 1950 Closing Averages Dow-Jones Industrials Dow-Jones Rails 228.89 69.82 EDMUND W. TABELL WALSTON,HOFFMAN & GOODWIN Thi, memorandum Is not to b. (ostrnd a. en off., or .ollcltatlon of offers to buy or seU any secutltl. From lim. to time Waldon, Hoffmu 3 Goodwin may hue an Intarut In some or all of the lecurltio. mntioned herein. The lorego1n9 material hal been prepared by UI as a matter of information only. It is ba58d UDon information believed rellabl. but not necessarily complete, II not 9uarante.d 115 IIccurate or final. and II not Intended to lorecl08 independent Inquiry.

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Tabell’s Market Letter – December 08, 1950

Tabell’s Market Letter – December 08, 1950

Tabell's Market Letter - December 08, 1950
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Walston.Hoffman (\ Goodwin NEW YORK 5, N Y 35 Wall Street DIGBY 4-4141 PHILADELPHIA 2, PA 1420 Walnut Street PENNYPACKER 5-5971 TABELL'S MARKET LEnER LOS ANGELES 13, CALIF, 550 South Spring Street MADISON '1232 SAN FRANCISCO 4, CALIF, 2bS Montgomery Sheet SUTTER 12700 The diverse impacts of the de se program on the various segments of our economy was well illustrated by this week's market action. On Monday, both averages reached their lows for the week. The industrials, at 221.31, were just a shade above the November 6th low of 220.59, but the rails, at 66.69, held more than two points above the comparable low of 64.00. This was the clue to the subsequent action of the rails. On Friday, the rails, on heav' volume, advanced into new high territory since 1931 to reach 72.67. The industrial leaders, on the other hand, made only labored up.side progress. Many of the higher priced issues appear to be under distribution. Issues like duPont, Standard of New Jersey, American Cyanamid, have built large potential tops. General Motors and Chrysler had previously ..formed distributional patterns and have reacted sharply. Much of this diverse action can be explained by the vulnerability or lack of vulnerability to excess profits taxes, price controls, credit restrictions, etc. Now, more than ever, the action of individual issues must be watched much more closely than the action of the averages. That is why this letter, while recommending profit taking on strength and a general increase in liquidity, has still retained the issues in the recommended lists published in the last two letters. As many of the issues that appear to be undergoing distribution are in the averages, it can be expected that the low of November 6th of 220.59 on the Dow-Jones industrials will be penetrated on the downside to reach the 210-200 area. Such action may result in relatively mild correction in issues with favorable patterns. Comments on individual issues in the recommended list follows BETTER GRADE / 'ii American News closed at 32 on Friday. This stock has been relatively inac- tive and has held in the 29-36 range for a long perjod of time. With an intensified defense program with more people traveling back and forth, prospects for this company should improve. The yield is generous and the stock has an interesting technical pattern. American News sold as high as 60 in 1946. Otis Elevator is another better grade issue that is selling close to the year's low. Friday's close lias 32. The stock has a good long term techni- cal pattern and combines good yield with moderate appreciation possibili- ties. MEDIUM GRADE National Supply closed at 21 3/8 on Friday and was quite active. Our origi- nal recommendation on this issue was at 19. The stock has a very strong . technical pattern, a good tax base and excellent yield at 1.60 plus 401 extra. In event of a general market decline, there is strong support at 19-18. Electric Boat is beginning to show signs of life. Friday'S close was 19. This stock has been on our recommended list for a long time at 18. The stock has a good upside potential and support at 17-16. Pacific Mills closed at 39 3/4. This stock was originally placed in our list at 30 and has since reached a high of 47. The long term technical pattern is very favorable. There is good downside support at 37. Stock should be purchased on weakness. SPECULATIVE Airlines. This group has done little or nothing marketwise but the long term technical patterns are very favorable. Increased travel should result in higher earnings and it is probable that airlines will receive special treatment under EoPoT. Most of the airlines are in our recommended list. Denver,Fio Grande & Western closed at 50 3/8 on Friday. 'This stock was consistently recommended at 28-29 earlier in the year and again at 39 when it penetrated its trading range on the upSide. The upside objective is rather vague at 47-56 but would take profits on further strength. December 8, 1950 Closing Averages Dow-Jones Industrials – 226.74 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN This .Q)fIa; r. to coni rued e. an offer or ;'ol1c1tatlon off…. to buy or 11111 IInv I.curitle. From tim. to tlma Waldon, Hoffman & Goodwin mlly hay, lin Int.red In lome or lit! of the s.curlti mlntloned hr'!' The lor.gol9 malerial has been prepared by UI III II metter of information only, It is baled UDon 'nformatlon believed r,lIebl, but not necearlly complete, II not qUllrollnfeed llf accurate or final, and i, not Intended to foredOe Independont InquIry, –

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Tabell’s Market Letter – December 15, 1950

Tabell’s Market Letter – December 15, 1950

Tabell's Market Letter - December 15, 1950
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Wolston.Hoffmon &Goodwin NEW YORK 5, N. Y. 35 Wall Street DJGBY -4414/ PHILADELPHIA 2, PA 1420 Walnut Street PENNYPACKER 55i'77 TABELL'S MARKET LEnER LOS ANGELES I J, CALIF. 550 South Spring Street MADfSON 9321 SAN FRANCISCO 4, CALIF. 2b5 Montgomery Street SUnER 11700 It is undoubtedly true that one does not buy or sell the averages and that rather trite observation is particularly true today. Since June, 1949, I have been stressing the fact that the market leaders would be the better grade dividend paying issues and special situations and that the more speculative groups would do little marketwise. This has been true up to recently. However, the pattern now appears to be undergoing some change. The signs of distributional patterns are more evident in the better grade issues. The more speculative issues, in most cases, show relatively little distribution. This leads to the possibility that a decline to 210-200 in the industrial average might have only a minor effect on a great many issues . . J'hgr.cmhElof the various averags-.S'Dtinue to give the i'!!!pressio l1. tha t lli.e.Jllarket has been inadi.tribu;l.ypJlas.5Ls.inreerJ OC)'.Qp.er. The.. many shap' moves up aBd down in a ,o2er!Od of time are one of the accom- p.gnlments of a distribuH9.!lQQP. ustbow fODg-.Uch-athcrseWln-I…LJ.., ' lJmaJ;Jcl.-TFie 191iP tOP.1'LClJ-si…J1lonths.ilJ…f!JI!JIJ.j,l1g Some of the less im- portant tops such as 1947 and 1948 were formed in two or three months. Present indications are that this top will be more in the nature of the latter formations. The industrial average will most likely be ullable to penetrate the 233-235 leveL HoweV'eil, 'there is always the possibility of a sharp climactic upswing into new high territory. In such an event would further lighten accounts. Recent advice has been 25 liquidity in investment accounts and 60 in intermediate term trading accounts. Listed below are the relative strength measurements of various groups. Unless there is decided switch in the trend of news developments, it would be expected that these groups will continue to remain in their present classification. However, it must be realized that some of the favorable groups have already advanced very sharply and may have discounted their relatively favorable position in the economic pattern. Conversely, some of . the unfavorable groups may have almost discounted bad news. General Motors, which we sold at 54, is nearing its downside objective at Friday1s low of 43 3/8. FAVORABLE Agricultural Machinery, Aircraft JIll'grs., Air Transport, Cotton Goods, Dept. Stores, Distilling, Machinery, Mail Order, Meat Packing, Mining & Smelting, Office Equipment, Rail Equipment, Rails, Rayon, Variety Chains, Woolens. NEUTRAL Baking, Cement, Chemicals, Coal, Containers-Glass, Containers-Paper, Copper, Electrical Equip., Fertilizers, Foods, Investment Companies, Leather, Motion Pictures, Paper, Petroleum, Retail Food,.Rubber & Tires, Shipping, Shoes, Soft Drinks, Steels, Sugar, Utilities, Utilities-Communications. UNFAVORABLE Automobile, Auto Parts & Acces.,Auto Trucks, Building Supplies, Containers-Metal, Drugs, Finance Cos., Gold, Household Appliances, Natural Gas, Radio & Television, Tobacco. \ On checking the position of the issues in our recommended list, I find that sales have been advised on 40 issues during 1950. The average recommended price was 36 and the average sales price was 50 or a profit of 39t. If one had purchased the Dow-Jones 65-Stock average at the year's low and sold at the ,year's high, the extreme gain would have been 20. The issues still remaining in our list show an average purchase price of about 26 and a present price around 29 or a gain of a little over 11. December 15, 1950 CloSing Averages DOW-Jones Industrials – 224.70 DOW-Jones Rails 7338 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN Thh mlmorandum is not to bl construed a. an offer or IOlIcit.tlon of offert to buy or .ell .ny securities. From time to time Waldon, Hoffm.n & Goodwin may hUI an 'ntlrest in .ome 0' lilt of the securltie. mentioned he,.in. The foregoin9 matlrial haa been prepued by us al a matter of Information only It is based uoon .nform.tion believed reliable but ftot eulSIIrlly complete, h not 9uar.ntled as accurate or flnat, .nd II not Infended to foredo, Independont Inquiry. .' . JJ.

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Tabell’s Market Letter – December 22, 1950

Tabell’s Market Letter – December 22, 1950

Tabell's Market Letter - December 22, 1950
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Walston.Hoffman &, Goodwin NEW YORK 5, N. Y 35 Wall Street DIGBY 1141111 PHILADELPHIA Z, PA. 1420 Wlnut Street PENNYPACKER 55977 TABELL'S MARKET LETTER LOS ANGELES 13. CALIF 550 South Spring Street MADISON 9l232 SAN FRANCISCO 4. CALIF 265 Montgomery Street SUTTER 11100 This week's market featured the lower priced speculative issues that until now have been relatively dormant all during the broad advance that started in June, 1949. The higher grade issues, which had previously paced the advance, moved only moderately higher during the week. The DowJones Industrial average, composed largely of quality issues, was unable to reach new high territory despite the sharp percentage advances and increased activity of the general market. A great many of the better grade issues have technical formations similar to that of the industrial average which, after an advance of forty pOints in less than six months, has heJd in a broad trading range between 236 and 220 since October. If this later proves to be adistributive top, the downside possibility is around the 200 level or lower. If it proves to be a re-accumulation area, the potential is 240-250. The question at the moment, is whether recent strength in specula- tive issues means that a new phase of the advance has started and that the better grade equities will also join the advance into new high territory or whether the sharp run-ups in the more speculative issues is the last phase of the advance from the 1949 low of 160. The picture is far from clear but various technical factors lead me to favor the probability that we are in the process of forming a distributional top and extreme caution should be used until the pattern clarifies. The market may continue strong for some further time. It took almost six months to form the tops in 1945. Continue to recommend taking profits on strength and a partially liquid position Suggest taking profits in the following issues in our recommended list. The figure in parenthesis is the originally recommended price level and the other figure is Friday's close. American Woolen (33) 43t, Bullard (20) 29 3/8, Chicao, Indianapolis & Louisville A (10) 16 3/, Gulf,Mobile & Ohio (14 5/8) 23 3/4, St.Louis- San Francisco (12) 23 3/8, Southern Pacific (52) b6, Southern Railway (36) 50 5/8, Western Pacific (35) 52 7/8. For new purchases would buy only issues that have reacted or have not yet partic1pateC in the advance. Some of these issues, listed belOW, have been subject to year-end tax loss selling and could rebound when such pressure is released. All appear to have support not far below present levels. BETTER GRADE American News (33), C.I.T.Financial (43), Commercial Credit (45), Endicott-Johnson (30) Kresge S.S. (37) McCrory Stores (31), Mercantile Stores (17j, Otis Elevator (33), Western Auto Supply (39), MEDIUM GRADE Associated Dry Hewitt-Robins Goods (19), (19), Lambert A(v2co3,PfdL.er (44), Elliott Co.(23), ner Stores (23), Natio nal Department Stores (20), National Suply (21), Penn Dixie Cement (22), Public Service Elec. & Gas (21), Shamrock Oil (31). SPECULATIVE GRADE , American Export (19), Central Foundry (8), Eversharp (13), Gray Manufacturin (11), Northwest Airlines (13), Speigel (12) United Stores 2nd. (9), December 22, 1950 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN Closing Averages Dow-Jones Industrials 231.53 DOW-Jones Rails 76.84 This memorandum II not to be condrnd fli an offer or sollcitetlon of offen to buy or ull eny UlcurHies. From tirne to time Walston, Hoffman & Goodwin may have en Intered In some or all of th securities mentioned hereIn. The fore\1olnq malerial has been prepared by us as a matter of information only. It IS based UDon information b.lleved reliable but not ece,sarlly complete, Is not queran..ed al accurate or final, and iI not intended to foreclose Independent inquiry.

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Tabell’s Market Letter – December 29, 1950

Tabell’s Market Letter – December 29, 1950

Tabell's Market Letter - December 29, 1950
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.Walston,Hoffman &Goodwin NEW YORK 5, N. Y. 35 WaH Stree' DIGBY 4-4141 PHILADELPHIA 2, PA. 1420 Wlnut Street PENNYPACKER !i-5917 TABELL'S MARKET LETTER LOS ANGELES 13, CAliF 550 South Spring Street MADISON 9322 SAN FRANCISCO 4, CALIF. 265 Montgomery Street SUTTER '2700 In the life of a market lett, writer, the holiday season of Ilerry Christmas and ''''appy New Year is tempered not only '.. – ,. conscien- tiousness of a forthcom''.lg prediction as to what the stock market will do during the year to come, but is also sharpened by a remembrance of how last ear's prophecy worked out. In this letter I want to take stock of 1950's analysis and follow the usual procedure for 1951. ,VIy 1950 forecast, when the industrials were 197 and the rails 53, was – My prediction for 1950 is that the industrial average will attain a high of at least 225 with a good probabilit that the 240-250 level will be reached. I doubt if c' low of the year it, below 185. I also believe the rails will test the 63-65 level. The market leaders, at least in the earlier stages, will continue to be the higher grade, long dividend paying issues that are yielding 5 to 8. The more speculative situations may ;t'equire more time to develop. The over-all prediction proved to be fairly accurate. Both averages will end 1950 near the year's highs. At Friday's close, the top on the industrial average was 236.63. The low was 193.94 in January. Th rail average penetrated the 1946 resistance to reach a high of r.. The advance, until recently, was led by the better gr'. -c, Lssues with the more speculative groups relatively dormant In the ;.'a,3 two months, the general pattern of the market has changed. The scc ,dary and speculative issues have, in many instances, advanced sharply while the better grade issues have done little marketwise. Any prediction for 1951 may prove to be very misleading if it is based entirely on the aver,.ges. 1951 may prove to be, to use a hackneyed phrase, a market of stock, rather than a stock market, The reason for such development is,of couse, the diverse effect of excess profits taxes, controls, allocations, defense orders, tc., on various securities. .. cause many of the better grade issues found in the Dow-Jones industrials may be temporarily hurt by the above mentioned developments, it is probable that the average will not move much above the 1950 high of' 236,63. On the other hand, some of the more speculative situations favored by a defense program and a good tax base, may move sharply above their 1950 highs. Selectivity will be pronounced and the market will not move as a whole. I believe the general public has yet to realize how deeply the proposed excess profits tax and additional taxes to be proposed later in the year will -cut into 1951 earnings of certain companies with a poor tax base. 01 other companies, the effect will be relatively mild. My prediction for 1951 is that the Dow-Jones industrial average, composed largely of better grade issues that may be temporarily hurt by defense problems, and which have s.'wn signs of distribution, will not move much above the 1950 high of 236.63,8ven though more speculative issues, not included in the average, could show good percentage advancement. I would not expect the 195J top to be above the 240-2 ,' ,level. On the downside, the industrial avel'age might dc line to about the 200 level during the year or even reach the 1950 low of 193.94. The rail average has a relatively better pattern and should meet support at 68-65 or at least at 60. This is well above the 1950 low of 50.66. The outlook, at the moment, is such that the intermediate term trader should be extremely cautious when the market enters the 230-21, range, take profits, and remain in a fairly liquid position to re-enter the market around the 200 level. For the long term investor, holding good sound issues, it would appear that the comparatively narrow trading range envisioned would not make it worthwhile, because of taxes and loss of income, to do other than to hold through any ensuing decline. However, would defer neVi purchases for a more advantageous buying level than prevails at present. Despite this seemingly gloo;ay prediction, it is entlr'ely possible that there will be excellent profit opportunities in indiv jual issues re- gardless of the action or the aver'c. These canot be co 3ed now but I will attempt to present them in l'';\;rs over the forthcoming ;year. December 29, 1950 EDl-JH8 111. TABELL Closing '''''rages WALSTO. ';OP(iJ';lI\.N & GOODWIll ThIiti(lfaert'.JdiIIl7iG'; ibn.iadJ6ltia'i&liilf., cr'lolIEti.ol4-6Jr.rl to buy or sell any ,.curiti.s From tim. to time Waldon. Hoffman & GoodwTn may uhD&..hRAOAioi!ftodnein.slO.vrn..a-PtDI ,n,11.flfISthebuStlcnuortltinecmesesna',lloInrecdomhp.ln.l, 11\6' f9(.goillg mater; 1MOl 9ua,anfd al ho!ll been prep,ned b., UI as accurat 01 'lnal, and iJ not maHer of information only It is baled Intended to 'oredOJ.e independent lnqulfY. 1

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