…../…… ……… ' .. '. Walston.Hoffman (\ Goodwin SAN FRANCISCO, CALIF. NEW YORK. N. Y. PHILADELPHIA, PA. LOS ANGELES, CALIF. BAKERSFIELD BEVERLY HILLS EAST ORANGE. N. J HARTFORD, CONN LONG BEACH MODfSTO OAKLAND RIVERSIDE SACRAMENTO SAN 01 EGO SAN JOSE EUREKA FRESNO HAGERSTOWN. MD. HARRISBURG, PA. PASADENA PITISBURGH, PA. PORTlAND. ORE. SANTA ANA SEATIlE, WASH STOCKTON VALLEJO TABEll'S MARKET LEnER 35 WALL STREET. NEW YORK 5. N. Y Digby 44141 HOTEL WALDORF.ASTORIA In last week's letter we noted 'that the ability of thPeLoin96dB6u0 strial average to hold above the 195 support at 195.40 and the divergent action of the rails in failing to react below the June 27th low of 50.66 probably indicated that the market had reached its low for the intermediate phase and that the pattern suggested an attempt to reach the 205-212 area. Also we noted that a change in leadership was expected and listed a large number of issues that appeared favored in a defense or semi-war economy. This week the market staged a strong rally led by the type of issues mentioned. The rail average reached new high territory for the year on Friday at 59. 83. The industrials rallied into the 205-212 range to reach a high of 208.89. Rails, steels, oils, metals and textiles were the strong.groups. The advance has been rapid and some consolidation may be needed to strenghthen the technical pattern. Recommended issues should be bought 'during periods of market weakness. Four weeks have elapsed since the invasion of South Korea on June 25th. The confusion and emotionalism of the early days has passed. The situation and pattern is still far from clear but there are a number of things that appear to be at least probabilities if not certainties (1) The Korean happening is probably not an isolated incident. It will probably be followed, over a period of months and years, by similar incidents in various parts of the world. (2) This implies continued ,spending over a long period of time to build up not only our own defenses but those of other non-Communist nations. (3) It probably does not mean all-out war. The production of Soviet Russia and her satellites is not sufficient to cope with this country at this time. As of 1948, America produced more than half of the steel in the entire world and four times as much as Russia. We produced almost two-thirds of the petroleum and almost ten times as much as Russia. With Canada, we produced more than half the world's copper and six times as much as Russia. Even with all of Europe and Asia in the Soviet'p hands, it would take time to build up a production of these vital materials equal to ours. (4) The happenings of the past four weeks mean inflation. There never has been a deflationary war. The value of money will be downward. (5) Business will be good and remain good for a long period of time. All fears of a nearby depression can be eliminated. (6) The amount and form of taxation, controls and allocations will depend on war developments, but it does not appear that there will immediately be more than a moderate amount of curtailment of civilian production. It will be a sort of twilight period between war and peace. (7) Under such conditions, some companies will be less vulnerable than others due to past average earnings and invested capital. Furthermore, in a semi-war or defense economy, the major companies will ,have less of a competitive advantage over the secondary or marginal companies. (8) This implies a change in the leadership of the market with red chip issues in the van rather than the blue chips. (9) 1\s the initial emotional phase is replaced by more sober thinking, it appears probable that the investor will deCide that, in an inflation- ary economy, the ownership of common stocks is preferable to holding cash or high grade bonds. July 21, 1950 EDMUND W. TABEL WALSTON, HOFFMAll & GOODWIN ….. This memorandum is not h/llve lin Intorest in some to or be all construed as an offer or solicitation of of the securitiu mentioned herein. The offers to buy or leU any securities From time foregoing material has been prepared by us to as atimmaettWer aho ftonIf(H)romfaftmioann & Goodwin may only. It IS based upon rnforrn/llflon believed tenable but nof necess/llrrly complete, 11 not 9ueranteed as accurate or final, lind is not intendlld to foroclose independent Inquiry

Wolston.Hoffmon &, Goodwin SAN FRANCISCO, CALIF. NEW YORK, N. Y. PHILADELPHIA, PA. ,;- ', LOS ANGELES, CALIF. BAKERSfiELD BEVERLY HillS EAST ORANGE, N J HARTFORD, CONN LONG BEACH MODESTO OAKLAND RIVERSIDE SACRAMENTO SAN DIEGO SAN JOSE EUREKA FRESNO HAGERSTOWN, MD HARRISBURG, PA PASADENA PInSBURGH, PA PORTLAND, ORE. SANTA ANA SEATTLE, WASH STOCKTON VALLEJO TABELL'S MARKET LETTER 35 WALL STREET, NEW YORK 5, N Y. Digby 4-4141 HOTEL WALDORFASTORIA Pllllr.a 9006860 For the common stock buyer whose chief interest is in long ,'cen! capital gains rather than current income, I believe that the stocks o air- line companies present an outstanding opportunity at preset price levels. Of all of my twelve-hundred or more graphs o,r ir;ividual stocks, the air- ILles have the clearest technical pattern for subs.tant.i.al long term appre- ciation. Obviously, these issues, most of which pay no diVidends, are speculative. Also, from another an31e. they may not be suiCable vehicles for short term trading. But I believe i;l,ey .ffer the possibility of vf.ry large percentage gains cr,at'; the patlan!J'c,;'lOldei', ,L.f.cause ,1 . (1) The airlines are definitely growth issues;,…Fron; lQ40 to 19)9, passenger revenue and revenue passenger miles fi6Wnhave;icreased each year. Pas senger revenue was 53.3 million in 1940 arid, 389 .3 millioli. in 1949. Fvenue passenger miles flown were 1,052 million in 1940 and 6,816 .;- 1'1111ion in 1949. Another example of growth io; the fact that the ra'cio 'of , air passenger miles to Pullman travel was 3.90 in '1935. In 1940 it had in- Gl'oased to 12.81. In 1949 it was '(0.30. In addition, the number of air- craft in service has increased sharply. There wer.e 369 in lc,40 and 8b'5 in 1949 .. – . (2) espite this tremendous ,rcwth, the average price of airline stocks today is not much higher than in 1940. ,.' (3) In addition, at present price levels, te' average airlin, stock'is selling considerably below the 1945-1946 highs. Barron!s airline average is now o.rouncl. 40 as compared with 84.06 on January 1st', 1946. , (4) The airlines in World War II benefited greatly, .from the stii,lUlus of wartime traffic. In our present defense or semi-war ec anomy , a' similar stimulus to airline traffic should cccur. In the event of a lessening of the war tension and a return to a peace econo;ny, airiine traffic vlOuld also .tend to imc.rease..;. T.r,'ffiC for June .is e;pected,)to,,show a large gain over a year a g o . , ' ;;.'.. , (5) Costa should not rise in proportion to additibi'iail business and most of the gain, \Quld be carried, down to net earnings,' ,';;, .' ,' (6) ,The airlines, in the war period from September 1939 to Pearl Harbor advanced 60 as compared with a 10 decline in the market. In the entire war period from 1939 to 1945, the airlines showed the gre2t;est p,ercentage appreciation of any group and advanced over 400. , . (7) In the event of an excess profits tax, the airl'inea could be a ; speciai case. In World War II, they had a favored status. Their tax exemp- tion was related to mail contracts rather th&, average earnings or invested capital. While it is only a conjecture, it appeavs probable that, due to the importance of alr.l.ine transportation in a war'emergency, similar favor- able treatment would occur. (8) The safety record of airlines is showing constant improvement. According to some sources, traveling by scheduled airliner is safer than , riding in an automobile. As improved instrument landing and radar equip- ment are installed in more cities, delays and cancellations will be lower- p.d and the passellger jvo'c,ntial will be greatly increased. . (9) Express and freight shipments, which are 'now only a small and rela', tively unprofitable ;'lal't of airline revenue could increaGe sharply. . i(10) Large institutional investors, such as mut'clal funds, trtlts ,pension. funds, insurance companies and the like have a very small percentage of fj 'cheir assets invest;ed in bonds, preferred s cocks and cotmr.on stocks of the irlines due to their speculative character and uncertain income. A change or the better could release a tremendous potential demand for airline aecurities due to tl,eir growth possibilities. (11) The technical pattern.s ')1' the airline iS31;\e are. v.cr-j',,' favorable. Very s.rQng accumUlation baStS Dave been formed Wiin.;'P,,3,sibilities of wide r,ercentage appreciation from present levels. . ,, ' . (12 );'The l)obmtially unfavorable fae tors snch as ',deendence on our mail 2ubsidies and the commandering of fleets in the e',rent' of a war emergency ,la' be 'overstles;ed. A discussion of these possibiiities and a list of the most favorable 3tocks in the group, from a' tec.hiifcal viewpoint, will ;Je discussed in my next letter, ., EDl'IDllD W. TABEtL ' C t memoradumJu h s not to be construed as an offer or solicitation of offers to buy or sell any secuHtes From Ilfn to time Walston, Hoffman & Goodwin may heye an interest in some or all of the securities mentioned hersln. The foregOing material hal been prepared by UI as a matter of informofion only. It is based upon informotion believed reliable but not necessarily complete, is not gUaronteed as accurate or final, and is not intended to foredose Independent inquiry ..'.' …..- – ;.–It., – – I – I,. – ' (-..,…'.,. …. ;, .''.f, …- – – —-

P-,',—————————– — ——- Walston-Hoffman &, Goodwin, SAN FRANCISCO, CALIF, NEW YORK, N. Y. PHILADELPHIA, PA. LOS ANGELES, CALIF. .,9'- 8AKERSFJElD BEVERLY HillS EAST ORANGE, N J. HARTFORD, CONN LONG BEACH MODESTO OAKLAND RIVERSID!! SACRAMENTO SAN DIEGO SAN JOSE EUREKA FRESNO HAGERSTOWN, MD. HARRISStJltG, PA PASADENA PIITSBURGH, PA. PORtlAND, ORE. SANTA ANA' SEATTLE, WASH STOCKTON VALLEJO TABELL'S MARKET LEnER 35 WALL STREET. NEW YORK 5. N. Y. Digby 4-4141 In last leek's letter I expressed the opinion thThtWRf iaj ,line conpanle. of;er outstrmding profit pDss'Lbili tL s fur I!!-m9'on , 'st')ck buyer vlhose chie, interest is in long term capitBl gains ruther than in vurrent income. I stated twelve reaL,ons some technical and some unda i', nental, for thIs conclusion. Lee us novi consider some 01 the 'Leemingly un- ,favorable factors in the airline situation. At the em, c' World War II both the .'3.irlines aI1d the investing pu;lic ,.-ere ver' optimistic on t;,e future of the industry. The companies e;;panded rapid 1\' . Tey borrolved money, boug.ht ne'; equipment, hired big sto.f,s and extenled their routes. Passenger revenue increased sharply in 'he period bet1'ecn 1)46 an6 1948, but not uS l'apidl- as the te0 rapIdly ex- ,panl ec. coses. Ac a result, most companies lost money in the three-e.lr per, ,,'. Air rle,ll S;)',)sidies, '.hih ;,ad been reducec. 2, in 1945, were L ,s,a),'ply inreasc( i1 1948 In an eff rt to assist se;;e Clf the more mar,;inal ',;. ' ,p'lies. In 1049, 1;ile picture slc,'l;; started to c'lanGe. Costs l'ere cut '. tlL',rply ariC, as trafic cClnJinue1 to increase, '1 large '.i'1ount was c'.rried , 'n Lnto net In ),0. This improvement 1li',S coneinued lnto 19S0 vlhic- brings \'.p t e possi!.ility cf rl cu'c in /,ir .nil pY,1ents , I shall n0t atte1Pt to enter into the argument of novi f.lUch of' air ,',8il Pl,- is '-,r serviceD render0( an h01 much i8 sultic',y. Tile iolportlnce -. tle question varies itl indi,vidu;-;l companies. Air rfall revenues are less th,m ''7 ,r t0tal reVC;1Ue 'r E23tern All'line, a; ag,,inst 2'J Lor SOFle ,, t ,e sFi.ller c.arr.Lers. ',';le rne v,l'ies ,'idelr , Some of t1,e smller 'cr'rrLer; receive tel, tir,lee as ;.111 p2r ton i1'.-1 '5 so(,le or t'1e .'.trol1Ger ,', ;.irlL1e, In m.' event;, as totnl reVUlUe increase3, the per(,2nt,fe )l de- po-t'ence 'n ir ..ail vlill r.ecli1e. Mail ',;'.S 11 , total re\'enUe3 ',n 1949 ', s ,,;ainst 3'; ,.n l(;iO, ,'tal o,ir iLil r.eveme ,1 1949 12.S 58 .illion. ,'- I '!e c-nBjder r1.',t h2.1 ,' it ',',as c;uC)sic.J (lhi l ' is ver; q'-estion)le) it ;;'J.s still a s!la11 (-3t Lor !laincainin, approxi,ately 1000 tr–.nspcrt plC'.nes ' '1' potentlal 1een3e purposes. It in ver; s'lall s cor'.psrec. '''-;'1 s'1e 3 , ''illi,n (ove).' one hun(cre(, times as ;mch) I.e h;,lve t,ed up in.'ar.1 p'ice ftlp)rts oi pe;il1uts, potr coes 1.d ct-er 1'c.rm cor(Jc(l icier, . Un 2er t iC pr2cent ',;v'tential ';a1' e;1erc.ency, it is ('oubtul that dn, c'lange '1111 be ,ue ''n lr ''i.l rates. An(tieCi' possi'ilit7 is the co,,;ml',deel'if, o' the airIleet in , ' r e;;wrcenc)', Thls ,ppers doubtful. In Worl,l W-i II appro;'i–mtely 40 cf '/e' 0 airline pl,mefl Here t.ken ewer J,'Jt i;1Cre'1sinc; load fae or of tile re,;',.t.r,,' planes 1(' T'C th,n ut'I'set the (Lference. During 1943 tc 1945, plQ,nes ,,;-'pec'ateci. ;.;; p.ppr( xi, ,E',telJ- 90 capacit' ; '3 co;–.par8d with appro;i Cltel;' (0 , ii'l 1;41 ad 10il . ,'he '1V'-, ',Ie factors end t1e very attrC'.!'cive technical p;tterns ,appe.ilr to greatly' ,''ce,;,,; t;e potentiall- unLevc', l.)le o.ctors. Fron a tech,,';Jc.l lOilt (,f 'Ie'. ,the –)l'\'inc ss'.1er have at,-';cactive .raph p;ttrns . (1) In t.!e Cl VL en(,-p(l.).n( pref erreL stocle c;roup, Afilerican Alrllne3 , j'3,'0 pref'errec' sellinL at ;-5' and convertitle lnto 4.6 shares 0' cO.r.;on, ir-.l( Unite; Alr Li.!,.50 preferred, \,, convertible into 4,2 shrres 01 1 C 'rJ ,)11 appe2r nttrac ti ve i'or incont plus appre' iation. (') In tlle ')etter c;raoe CO!!1;lOr, steel; class,f; cation Alerican Airlines , ( 1) ) C(.1( Eastern Airl''nes (1(; ) are ,1utstandc',g, 7he 19115-2!6 ;',Ihs ,'ere ;,1 1/2. and 33 -!-. Be,t lssues are in strong L,ancIcl position ,',nel ilave .11 ,jependeflce ,'n E',.Lr . il subsidie,. The ch,;rt potterns indicrte at ,,'.(,' t an appr( ',1 .,'ti(',1 (' tl e 1911'46 highs. . c) III tl v)re 0peul,tive ;,r('up, 'illuse ejJenaEnce on .ir , a'l cub- ;31 les is l'J)t ,',(Jr.' Llp0rtmt, I 1I0Uld inclUde li',ed Air LinelJ (13 ) and I ' Wil (,O ). TlE. 14116 lliC'lS I'ere 62 1/2 Qnd-' , S. Neitle2 0' tlJese S3ues ''Gr;;' in as scunC 'innncLl positio') aIS A'eric'..L a,ld Ecst;el'n b;t cC,clld ShOll '; re,-.ter pe','ce.l'ca 'e ppr.;latIr,n 11 a ;.)OU 8.irl..e (,mrf(' and t;reat(,, 105ses 'J C. Q. ,.- ec 111in I !o.r'cct.. . , (it) In t' ,e Rztre ,el' specllat,Lve ,-,roup I l1c,,',ld choose We. te.rn Air Line; . ,( 1' ) an' 31 ;Li,,'l Alr;'2-S ( 10) cmd ,,;,'r,thnst AirlL'lcs (12). 'rhe 1945-6 , ; ,,-,b ',!el'er.upe t,',vel-' he; 1/2 ,'r WRstern, 3'( 1/2 i'or ErcenL'f' 'l' 63 1/2 . 'r \'rtl es (,. ,.p;'eGe ..LBS'.leS are pel'1.1,,tive b ' t Llat.. ( ',.1 Lc1e Q,ppreci2. cJ lon if' PrJElS . i I i L.l . C) All t,le abrve issues f.re listec on t 11e N.Y.S.E. I', the unlis'ced tel' Delta Airlir.o,,, '/'. is cLlts-candln,. TL 194,-46 high .. as 69 1/2, ';',e Ji;;pany i.s ,,ne 01 ,e tetter resional 0ar iers, S..nce 19 1!1,coLp'.ny has ('urneL .me in ever' ear \'lith 8F!eptlon 01 1,)7 a,1d has p,',ld dividends AIn' lIT\tttt.lse jind\O; lnitf,s' i som;cJr '0…. l..fipon in'ormafon eJle\l'fld e .r CI til ane; ar Of ,ollcitatlon ell of the securities mentioned herein. tel/able but not necessarily compl.fe, of The Is onlofoffre.ngqolltllolnlt9bnumtyeaetdoerr l.laelJ..IchLcWulr,bft,l&eoerr/h.f.i.MFlp,rAonmbdyi1is'f.Iin.&lorl-ttl1Iti'n.;4lletnM'td teDWdralosftofoInnr,efodHrOmoJfaeftmiolannndeo&pnelyGn.doMoItdIwIsi)nnbqaumslea.yd ….. … …….. . – – .. -.. '. ;, . .- – — –

N! — '.' ., 'Volston.Hoffmon &. Goodwin. ;' SAN FRANCISCO. CALIF. NEW YORK. N. Y. PHILADELPHIA. PA. LOS ANGELES. CALIF. 8AKERSfiELD BEVERLY HILLS EAST ORANGE. N. J. HARTfORD, CONN. LONG BEACH MODESTO OAKLAND RIVERSIDE SACRAMENTO SAN DIEGO SAN JOSE EUREKA fRESNO HAGERSTOWN, MD HARRISBURG, PA PASADENA P1TISBURGH, PA PORTLAND, ORE SANTA ANA SEATTlE, WASH . STOCKTON VALLEJO TABELL'S MARKET LETTER 35 WALL STREET, NEW YORK 5. N. Y. Digby 4-4141 HOTEL WALDORFASTORIA PL… 96860 6- ..3 The industrials and rails last week, at 217.53 and ,reached ,'new high territory since the Korean decline. The advance has been rapid and ''Would expect at least a consolidating phase. The industrial average has re- traced two-thirds of the decline from the June highs and appears overbought for the short term. For the past six weeks, the most popular pastime in Wall Street has been the compilation of lists showing how the earnings of various companies might be affected by the imposition of an excess profits tax. Con-' Sidering the fact that the provisions of such a tax are not known, and most ,likely will not be known for several months, any conclusions to be drawn 'from such compilations could be subject to considerable amount of error. … Most observers have used the E.P.T. provisions of World War II as , the basis for their conclusions. This results in rather unfavorable potential, earnings for the growth issues such as chemicals, television, utilities,etc., 'and some rather favorable earnin6s potentials for quite a few companies whose management and outlook could best be described as mediocre under normal con-, tiitions. Basing a possible 1951 E.P.T. entirely on the 1942-1945 E.P.T. ' might result in some rather bad mistakes such as occurred in 1942 when the .1917 -1919 experience was used as a criterion. For example, the soft goods ..' issues were heavily sold after Pearl Harbor on the theory that their tax and economic picture was unfavorable. Montgomery Ward dropped from a 57 ;..high in 1940 to 23t in 1942. A year later it was selling at 50 . .; The purpose of an excess profits tax is one on which everyone .agrees – namely, to take the profits out of war. However, in applying this principal, it is impossible to be entirely fair. It is very difficult to ',differentiate between increased earnings that are due to war and increased ,' earnings that are the result of normal growth and efficient management. , It is doubtful that E.P.T. of World War II will be used in its , ntirety. I believe that the government realizes that there were several L inequities in the Act. Some allowance was made for growth, but this prin',ciple may be further enlarged in a new law. Also, the profit on direct war work may be sharply reduced by new forms of contract that will apply to sub- contractors as well as original contractors. It is even possible that we might have higher direct taxes rather than an excess profits tax. . It is too soon to come to definite conclusions, but the technical , supply and demand formations of individual issues and groups are beginning to form longer term patterns as the hectic emotional period following the .. invasion of Korea is slowly being replaced by more calm and reason. . Some of the groups that were hardest hit,such as chemicals and . utilities and televisions, are beginning to show signs of reaccumulation. , hese groups appear to have reached their lows during the heavy ; liquidation of late June and mid-July. Some further time may be needed to ., ' ..broaden out the potential base patterns, but they should be bought during ','periods of technical correction. . The utilities, for issues of their quality, have reacted sharply ',from the May high of 44.39 to the July low of 37.15. The 37 level is one of very strong long term support. While these issues are not volatile market performers, they are now available on a very attractive yield basis for the longer term investor. 'August 11, 1950 EDMUND W.,TABELL WALSTON, HOFFMAN & GOODWIN This heve muemIonrtaenredutmInhlon.mote to or be '.III con,trued ,n an offar or IOlldtatlon of of the securities mentioned here1n. The offers to buy or sell u forogolng matarlal hilS y securities From time been prepllred by us to as II timmaettWeralosftonIfoHromlflffmlonn & Goodwin may only. It Is bllsed IIpon Informahon behoved telleble bllt not necessarily complete, Is not guaranteed s accurate or fll'JllI, and is not Intended to foreclose Independent inqu1ry. ,..

r–;;'- —— – – Wolston.Hoffmon &, Goodwin' , SAN FRANCISCO, CALIF. NEW YORK, N. Y. PHILADELPHIA, PA. LOS ANGELES, CALIF. BAKERSFIELD BEVERLY HILLS EAST ORANGE, N. J. HARTFORD, CONN LONG BEACH MODESTO OAKLAND RIVERSIDE SACRAMENTO SAN DIEGO SAN JOSE EUREKA FRESNO HAGERSTOWN, MD. HARRISBURG, fA. PASADENA PlnSaURGH, fA PORTLAND, ORE SANTA ANA SEAnLE, WASH. STOCKTON' VALLEJO TABELL'S MARKET LETTER 35 WALL STREET, NEW YORK 5, N. Y Digby 4-4141 HOTEL WALDORFASTORIA PLa.. 96160 Both averages reached new highs on Friday with the industrials at 219.88 and the rails at 63.81. Both averages are now at upside resistance levels. Would favor taking trading profits and assuming a 50 liquid posi- tion on short term and intermediate term accounts. The panicky buying and hoarding of sugar, tires, nylons, and other goods that were shortage items in World War II, has fortunately subSided. It was an excellent example ofhow temporary hysteria can run directly , counter to facts and reason. The jittery portion of the public that expected a repetition of the , 1940-1945 pattern lost sight of a very important factor. Today, our economy , ' and productive capacity is much different from that of 1940. Even in the !,.i event of all-out mobilization, the impact on our economy would be relatively ' small as compared with 1940-1945. , , In 1940 we were just emerging from a ten-year depression. Our pro- i'ductivity was low. In 1939 our gross national product, the measure of the rate at which goods and services are being produced, was about 91 billion . annually. In 1940, almost 8 million people were unemployed as against 48 ' i . million working. Our plants and equipment were old and inadequate to meet ..' , the' tremendous demands of the coming war. We had no synthetic rubber plants ,i i Ino huge aircraft plants or ships. By 1942, more than 50 of our output was ., for war. Half of our food output was for military or lend-lease purposes. ' We all know what happened in the period between Pearl Harbor and 'the surrender of Germany and Japan. It was a great tribute to American in- jdustry and production. The plants and factories were built, the planes and , ships and war supplies were produced in unbelievable amounts. We not only ; i fed and equipped our own military and civilian economy, but also supplied '1 and fed our Allies, including Soviet Russia . .. ! Today, the situation is quite different from 1940. We have just .passed through ten years of prosperity and increasing production. As of , . June 30th, our gross national production was running at the fabulous rate I' of almost 270 billions. This is above the all time high reached in the ..; I j final quarter of 1948. We are turning out goods and service at a rate three I '. times greater than 1939 and twice greater than 1941. Our plants and equip- ',ment are modern and greatly enlarged. The synthetic rubber plants and the airplane factories are built. There are huge quantities of ships and equip- ment in mothballs. The steel for these items will not be needed in the vast quantities of 1940-1945. It is estimated that one-half of 1 of our present steel production is being used for defense and, in the event of all-, . out mobilization, the percentage for war would be only 10 of present outputi.'j Of course, there will be some shortages but they will be mainly in ; impol1t commodities and possibly in some of the metals. On,.the whole, the ,tremendous shortages of 1940-1945 will not exist. Production of goods i' using materials needed for defense will be cut but not as drastically as ! '.. most people imagine. For example, according to a recent estimate, automo- i' .bile production may be 5 million cars as against 8 million at present, i i' television cet production may be 4 million as against 6 million at pre, sent and refrigerators may be cut to 4 million from 6 million. There will be shortages only in relation to the amount of money I that people have to spend. As compared with 1940-1945, consumers goods and food will be in heavy supply. This leads to the conclusion that some of the stocks in the auto- mobile, refrigeration, television, air conditioning and housing fields may have been oversold in the light of the above possibility. August 18, 1950 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN This memorandum Is not to be construed as an offef or solldhltlon of offen to buy or 5811 tiny securltles, From time to time Walston, Hoffm!ln & Goodwin m!lY h!lv& an Interest In some or all of the securities mentioned herein The foregoing m!lterial hu been prep!lred by us as a matter of Information only It is bued upon Information believed renable but not necess!lrlly complete, Is not CJuerenteed !IS at';Uf!lte or fln!ll, and Is not Intended to foreclose Independent inquiry.

—————– — — – – – – – – – – – – – – – – – – ….Walston-Hoffman &, Goodwin SAN FRANCISCO, CALIF. NEW YORK, N. Y. PHILADELPHIA, PA. LOS ANGELES, CALIF. BAKERSFielD BEVERLY HillS EAST ORANGE, N. J. HARTfORD, CONN. LONG BEACH MODESTO OAKLAND RIVERSIDE SACRAMENTO SAN DIEGO SAN JOSE EUREKA FRESNO HAGERSTOWN, MD. HARRISBURG, PA. PASADENA PITTSBURGH, PA. PORTlAND, ORE. SANTA ANA SEATTLE, WASH STOCKTON VAllEJO TABELL'S MARKET LETTER 35 WALL STREET. NEW YORK 5, N. Y. Digby 4-4141 HOTEL WALDORF.ASTORIA pu… 96860 In my letter of July 7, 1950, when the industrial average was at 208.59, I stated that The downside indications on individual issues point to the 205-195 range as the most likely area where this intermediate de- cline will bottom out. Included in this letter was a list of issues with . attractive technical patterns for long term appreciation to be purchased ; during periods of market weakness. In our next letter of July 14th, the , day after the industrial average reached its low at 195.40, I made the following comment The fact that the industrial average met support at the expected 195 level, plus the divergent action of the two averages,gives credence to the probability that the market has reached its low of the in- termediate phase. In this letter we listed a number of issues for near term trading purchases. Some of the issues in these two lists have advanced . sharply from their July 14th prices. For example, Reynolds Metals has ad- i ! vanced from 23t to a high of 32 3/8. Schenley from 34 1/8 to 41, LibbeyOwens-Ford from 59 to 76, Chicago-Milwaukee & St. Paul pfd. from 32t to 1 40 7/8, Illinois Central from 39 1/8 to 48 3/8, Missouri-Kansas-Texas,pfd. from 24 to 34, etc. I continued to maintain a constructive attitude toward the market until last week and in my last letter of August 18th said – Would favor taking trading profits and assuming a 50 liqUid position on short term and intermediate term accounts. I would continue the cautious attitude. The short term indicator gave a sell signal on Tuesday and the in- termediate term indicator is heavily overbought. I expect a retracement of one-third to two-thirds of the twenty-seven point advance from the July 13th lows. This would bring the market back into the 213-204 area. To 1. narrow it down a bit,. 212 to 208 looks like a logical buying spot. I would defer purchases until that level is reached or until the pattern indicates '1 a change. For the longer term I repeat my opinion that the averages will 'j !remain in an area bounded roughly by 230 high and 195 low — possibly a 5 leeway on either side should be given. It is entirely possIble that this ., range will hold for another year to two years. Such a market, of course, will be selective and there will be ample opportunity for capital appre- ciation if one holds the right stocks. If the averages should enter the 212-208 range, I would add to hold- ings. I am listing below a group of stocks that would appear suitable for purchase if averages reach that level BETTER GRADE .. Aluminum Company of America, Atchison,Topeka & S.F., Bethlehem Steel, Caterpillar Tractor, Columbian Carbon, Fairbanks Morse, General Elec., Ingersoll Rand, Kennecott Copper, McCrory Stores, Montgomery Ward, National Lead, Owens-Illinois-Glass, Chas. Pfizer, Stand.Oil of Calif., Stand.Oil of Indiana, Std.Oil of N.J., Union PaCifiC, Wewtern Auto Supply, Westinghouse Electric, Youngstown Sheet & Tube. MEDIUM GRADE Allied Stores, Associated Dry Goods, Bullard,Burlington Mills,Carrier, ! , .'.,; Celanese, Chain Belt, Chic.Pneumatic Tool, Chicago-Rock Island, Com- .,. .1. bustion Eng., Electric Boat, General Tire & Rubber, Hewitt Rotbins, Illinois Central, Lowenstein, Northern Pacific,Pacific Mills, Republic Steel, Schenley,A.O.Smith, So.Pacific,Sperry,Texas & Pac.,Western Pac. SPECULATIVE Amer.Airlines, Amer. & Fgn.2nd pfd.,Armco,Bohn Alum., Braniff Air., Budd, Capital Air, Chic.Great West.,Chic Ind. & Louis.A.,Chic.Mil & St.Paul pfd.,Denver & R.G., Eastern Air, Elastic Stop Nut,GoodallSaruford,Gulf,Mobile & O.,Minn & St.Louis,Minn.St.Paul& S.S.Marie, M-K-T pfd, Northwest Air,Pitts.Consol.Coal,Reynolds Metals,St.Louis- San Fran., Seaboard Airline, TWA, United Air, Western Air, Western Maryland, Western Union, Wyandotte Worsted. August 25, 1950 EDMUND W. TABELL WALSTON,HOFFMAN & GOODWIN ,'I Thb memorandum Is not to be construod as an offer or solIeltatlon of offors to buy or sell any seuritilll From time to time Walston, Hoffman & Goodwin mey heye ,an Interest In lome or !!III of the &ecurlfies mentioned herein. The foregoing material h!!ll been prepared by Ul as a matter of information only. It Is based upon Information belleyed reliable but not necessarily complete, is not guaranteed a, accutate or final, and is not Intended to foredose Independent Inquiry. .. -,,.- – ..-…… .

Walston.Hoffman &Goodwin NEW YORK 5, N, Y 35 Wall Street DIGBY 4-4141 PHILADELPHIA , PA 1420 Walnut Street PENNYPACKER 5S'in TABELL'S MARKET LETTER LOS ANGELES 13, CALIF, 550 South Spring Street MADISON '3212 SAN FRANCISCO 4, CALIF, 2b5 Montgomery Street SUTTER 12700 Ever since the downside gap in the industrial average on Friday, August 25th, the market has been unable to make much upside progress. On Tuesday, the rail average reached a new high at 64.18 but the industrial average, at 220.20, failed to penetrate the August 24th high of 222.17. On Thursday, the industrials declined to a low of 216.21. I am still of the opinion that we will witness a further correction of the undigested twenty-, seven point advance from the July low of 195.40. Volume indications have been unfavorable and there does not seem to be sufficient buying power at this time to immediately penetrate the heavy supply area in the 219-229 range. A decline to the 212-208 area would be suffiCient, in my opinion, to correct the overbought condition created by the rapid advance. If that level were reached, I would advise the purchase of selected issues. In last week's letter, I listed a number of issues suitable for purchase if the industrial average reached the 212-208 area. To that list, I would add the following stocks- Chain Belt, Dresser Industries, Mathieson Chemical, National Supply and Square D. The investor today must keep one thought uppermost in his mind. The main, basic factors that will eventually determine the long term trend of equities are predominantly in favor of higher stock prices. It is not necessary to repeat the details. They have been covered many times before in this letter. The situation has not been changed by the Korean criSis. In fact, the happenings of the last two months have intensified the longer term picture even though they may temporarily hold back the eventual up- swing. The invasion of South Korea will not pressure but it will also mean a high level only add to of business the for inflationary years to come. -, An increasing supply of money and higher earnings should result in higher stock prices. That must be the inevitable result. Temporarily, the trend may be held back by taxes, controls, allocations, re-negotiations, etc. An even more potent factor holding back an immediate rise is fear by the investor of outright war, the atom bomb and war reversals. These fears will not provide the background for unrestrained optimism but neither do they give much reason for flight into a depreciating dollar. It is my opinion that the upward push of increasing inflationary pressure and higher earnings will temporarily be held back by the restrain- ing influences of wartime controls and taxes and by the psychological fears-.; of the investor. It will result in the market, as portrayed by the averages holding a narrow range for a considerable period of time. It is possible ,the range so far in 1950 of 229.20 high and 195.40 low will contain the – market, with a 5 leeway on each side, for a long time to come. This should result in an excellent trading market while the averages and individual issues are influenced by the temporary hopes and fears of changing war con- ditions. However, eventually the basic inflationary factors will become pre- 'dominant. It may be a year or two years, or even three years, before this occurs. No matter what the time element, it still is my opinion that high grade common stocks offer the investor the best protection from a depre- ciating dollar. September 1, 1950 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN Closings; Dow-Jones Industrials – 218.42 Dow-Jones Rails 63.38 Thil memorandum Is not hue an Int.rest In some to or b. all construed ,/II .an 01 the securities offer or sol1c1tllllon of mentioned herein. The oHeri to buy or sell any securities From time to time Waldo., Hoff'!lfln foregoin9 material hu been prepued by us as II matter of tnformehon o&nlyG. oIotdwIsinbameady upon Information ben..,ed rellabr. but not eCflnarlly complete, 11 nof quarufd as ccurate or final, and il not Intended to foreclole Independent inq\llry. . . … . … .. . . -t., .

.. 'Walston.Hoffman \\ Goodwin NEW YORK 5, N, Y 35 Wo.'IlI Street DIGBY 44141 PHILADElPHIA 2, PA 1420 Wall'lul5treet PENNYPACKER S 5977 TABELL'S MARKET LETTER LOS ANGElES 13, CALIF, 550 SouJh Spring Street M)OISON 932J2 SAN FRANCISCO 4, CALIF, 2bS Montgomery Street SUTTER 12700 n increased volume, the market moved higher on Friday. The rails , were the leaders and the rail average reached a new intra-day high at 64.63. The industrials also advanced but, at the intra-day high of 220.9!', were – just a shade above Tuesday's high of 220.71 and over a peint beloH the rally peak of 222.17 reached on AugUst 24th. Special situations rather than the usual market leaders scored the largesl advances. Despite the seemingly good actio;1 of the market, I would remain cautious. Two weeks ago, with the averages about he same level they are 'today, I advised taking profits and assuming a 50 liquid position in short term and intErmediate term trading accounts. I see L) reason t.o change this advice at the moment. The in-cermediate term inriicator has net 'ret corrected the overbought condition brought about by the sharp rapid advance from the ,Tuly lows. Further consolidation for two weeks or so or a techni,cal correction would be needed to change this pattern. Until this Occurs I would keep a 50 cash position in tradirg &ccounts in order to be able to take ad-Jantage of a reaction. This does not apply to long term invest- -ment accounts. They should continue to remain fully invested. 'l'le 11bral -yjelds and increasing inflationary pressure indicate that good common stocks are a much sounder holding than a depreciat';'ng dollar. Low-priced issues, from a percentage poi t of view, usually show illuch !)reater appreciation than higher priced stocks. A ten polnt advance in a jilO stock is equivalent to 100 profit while a cnilar move in '1 stock' selling at 30 is only 33 1/3. Pro'-idcd one has patiE'YJce and is wDling to assume speculative risks, low-vriced stocks can S10W the holder large percentage profits. Low-priced issues have, not been market fa'/orites a'.d they lave shown only mocerate appreciation from the-lows of the last four years. The twelve issues listed below all hve p0tentially cttractive technical patterns. For a mere 11,'350. (excluding cO.1missions) one can purchase 100 shares of each of these stocks. ' This 'lCkage was worth a maximum 01 34,960 at the 1945-1946 highs. Purchase l'f the entire package is recommended rather than concentratio'1- in one or two issues Austin Nichol Braniff Airways Jush Terminal Central Foundry C0ntinental Motors Delaware,Lack. & West Elastic Stop Nut Gray Mfg Northwest Airlines R-K-O Spiegel Western Airlines 1945-19).6 HiCh 25 3/4 37 1/2 15 3/8 17 3/4 24 16 3/8 16 3/8 24 1/2 63 1/2 28 1/8 39 7/8 40 1/2 7 – /3 9 e 3/8 10 1/2 9 7/8 10 3/4 10 3/4 7 5/8 10 1/2 9 3/8 Closing Averages Dow-Jones Ind. — 220.03 Dow-Jones Rails – 64.39 September 8, 1950 EDNUND -W. '1'ABELL WALSTON, HOFFMAN Co GOODWIN Thh hue menmlonrla.nrd.,u'mIni,I()nront. to or upon Information believed bI.I construed illS an of lhe securities on., or sol1cil!lon m.ntioned h.rein of The reliable but not ntunarlly compl.te, h ofoffreengotionqbumy aoternoleillh,nl'beseentur1ptr1eepsarFedromb., not quarante.d al acturate or fiMi, and time 10 time Wolllo.n, Hoff,!,,n .. Good!,ln m., us as is not a matter lnl.ndad of 10 foinrf.ocrlmolaotioInndoopnle.,n.deItntIIlnbqolsr.yd. -;-

Walston.Hoffman &, Goodwin NEW YORK 5, N. Y. 35 WlI Street DIGBY 44141 PHILADELPHIA 2, PA 1420 Walnut Street PENNYPACKER 55977 TABELL'S MARKET LETTER LOS ANGELES 13, CALIF. 550 South Spring Street MADISON 93232 SAN FRANCISCO 4, CALIF. 265 Montgomery Street SUTIER 1-2700 The industrial average on Wednesday decisively broke out on the upside of the long trading shelf between 222.17 and 216.21 in which the average had held since August 18th. A high of 226.32 was reached on Friday. The rails were the original leaders of the advance and the rail average, at the week's high of 67.10, was approaching the 1946 high of 68.77. I .wulrl not follow strength at this stage. Three weeks ago, when the averages were around 220, I advised ta.king profits on 50 of' holdings in short term and intermediate term trading accounts and while adviSing com- pJ ete retention of long term holdings, suggested no nevI purchases. The present pattern of my technical work indicates n) change in that advice. The industrials are entering an area of he.cvy supplr at a time when boch the'short term and intermediate term indicators are in an overbought condition due to an undigested advance of over thirty pOints in two months. It would appear doubtful that 'che up\,iard mome,tum cnn continue to be rl8.in- tained for a suffic ient time to absorb the overhead ''Jfferings. The consolidating period from mid-August restored e. lou,h technical strength for a short te'm advance to the 223-226 area but the il'.termedlcte term ina.icatul' is still in overbought territory and this 'eek's ltrengt, has again placeC the short term indicator. in selling territory. The two main motivatin forces behind the present rise are (1,) hlr;her. earnlngs and dlvldends and, (2) the.lnflationary potential qf greatly increaser, government defense spending. Both t'ese factc'rs will, in my oplLion, result in much higher stock prices. I can eventually envision the possibility of a prLe level above the highs of 1929. But I do nei., believe that this is the. time, for ,such, a move. Inflati h and .,;l1gher commodity prices would 'be directly against the interests.of' the defense program and the government will do everything in its povler to hold down the inflationary potential. Actually, we have not yet felt the impact ;f iJ'1creased government spending. It will not be evident until the latter paLt of 1951 and in 1952. There is a time lag between appropriations for purchase and the actual spending. The cash deficit for the 1951 fiscal year will be comparatively small. In the meantime, the government will do all it can to .hold back rising prices by a strong anti-inflation pr,)gram. This will be particularly true after Election Day. Cre01t controls and higher taxes and moves by the Federal Reserve Boa;j can be expected. All of tese thlngs can adversely affect common stock prlces for the short term. , I continue to believe that the factors pushing up prices will be 'temporarily balanced by factors that will hold back the marlet. The re'suIt will be a rather narrow tradlng range for an E'xten.ded period of time, possibly or'as long as two years or more. During that period, I do not 'believe the market will move much above the June 1950 high of 229.20, or 'much below the 195.40 low of July, 1950. When the inflationary factorf gaLl t8.llpordry ascendency, and the averages reach ,he 220-230 area, I would lighten trading accounts and (l,f'er invest;ent purchases. When the repressive factors seeming to be holding the line against rising prices and th averaes enter the 210-200 area, I would becoe fully invested for' both the short and longer term. Closing Averages DO',1-Jones Industrials – 225.85 Dovi-Jones Rails 66.74 EDMmm W. TA3ELL WALSTml, HOFFl'flAN & GOODWIN September 15, 1950 This mamorandl,lm is not to b. construed Cli an oH.r or sollci'aUon of offers to buy or sell any securities From tiMe to time Wahton, Hoffman & Goodwin mey have an Int.r.st In 10m. or all of the securities mentioned herein The foregoing malerial has been prepred by 1,1, .n II matter of information only It is baled upon information beheved rellabl. but not necenarlly compl.t., II not guaranteed U o!Iccurate or final, and is not Intended to faradaiC! Indo pendent Inquiry. . .. – .. . .'. . … … – -,;;.–

,,' Walston.Hoffman (\ Goodwin 5 NEW YORK 5. N. y, 3S Wall Street DIGBY' 4-4141 PHILADELPHIA 2. PA 1420 Walnut Street PENNYPACKER 5;977 TABELL'S MARkET LEnER ' LOS ANGELES 13, CALIF 550 South Spring Street MADISON 91m SAN FRANCISCO 4. CALIF, 265 Montgomery Street SUTTER 1.2700 , , In June, 1949, this letter recommended the purchase of stocks in the 165-160 area of the industrial average. The low was 160.62. Later it was .. stated that the upside obJective for the advance was a minimu.'ll of 225 and a maximum of 240-250. In June, 1950, the average reached a high of 229.20. 'Then followed Korea. We again advised purchase of selected issues in the , 205-195 area. The low in July, 1950 was 195.40. The market has now, in a , little over two months, regained almost the entire decline. Friday's high ,was 228.17. At this stage, I would advise caution in following the advance. It is possible that the'maximum objective of 240-250 may be approached, but', 'I would rather doubt it. The market entered overbought territory on August' 24th when the average reached 222.17. At that time we suggested lightening , intermediate term accounts 50 while continuing complete retention of long term holdings. Would continue to follow the same procedure. The market appears to have enough momentum ta hold in the broad 230-220 area for a , little further time and special situations may have moves of their own. I , 'trading accounts, some advantageous switches might be made in order to take 'advantage of such special situations,provided 50 of funds remain liquid. ,,' Below is a review of some of the issues in my recommended list. ALUMINUM CO.OF AMERICA was recommended in late February at 55, so it , is now,a long term holding. The last sale was 71 3/4. The original object- ive was 70-75. Seems high enough at the moment. ! CALIFORNIA PACKING was originally recommended at 36. The technical , pattern indicated an advance to 52-55. The recent high was 52. Is near its obje'ctive. ', INTERNATIONAL MINERALS f, CHEMICAL. Originally recommended at 25 and 'again in July at around 35-37. Last sale was 49 3/4. The longer term pat- ,'tern still indicates higher levels at 60-65. Would buy on declines. LOWENSTEIN & CO. This issue has been conSistently recommended in the '20-25 range. Last sale was 38 1/8. Recent advance has been rapid but longer, term indication is 50-55 on present stock. Declared 25 stock dividend this week. Buy on price declines. MISSOURI-KANSAS-TEXAS, PFD. Originally recommended at 26. The stock 'has a very bullish long t8rm pattern and indicates much higher levels. However, at Friday's high of 39 1/4, the stock was just below the upside supply at 40-50 and may need some technical correction before the advance ,is resumed. Buy on dips., PACIFIC MILLS was recommended late in May at 30. Thursday's high was 47. The advance has been rapid but the intermediate term objective is 50-56 and the longer tern objective is even higher. Would not follow . strength at this stage but would add to holdings on price declines. , REYNOLDe METALS has conSistently been recommended in the 10\1 20s. ',Recent high was 32 3/4. There is some supply of stock around present levels that temporarily may hold Qack the stock but long term indications are much ,higher. Buy on declines or on ability to reach 33. ' SCHENLEY INDU3'rRIES was one of favored purchases early this year when it \'fas selling at around the equivalent of 24 for the present stock. Last 'sale was 33. While some consolidation may be needed, highet levels are ul- timately indicated. The objective is 45-50. Buy during periods of market weakness; SEABOARD AIRLINE. This has been one of our favored rails. Stock was originally r,ecommended at 15 and again at 22. Recent high was 39 3/8. At that level it had over-reached its intermediate term objective of 37 and may need some consolidation to form a new pattern. WESTERN UNION originally was recommended at 26 in May wher, it broke out on the upside of a long accumulation area. At that time it was stated that the objective was 0-)5 where a heavy supply of stock would be met. At Friday's high of 41 7/B, this objective has been approximated. Closing Averages Dow-Jones Ind. -,26.64 Dow-Jones Rails – 67.90 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN September 22, 1950 This memorandum is not to b. construed 1111 an offer or solicitation of offe,.. to buy or sell any ,ecurltlos. From time to lime Waldon, Hoffman & Goodwln may hay. an Int….lt in lome ot all of the securlthll mentioned herein, the foregoln9 matl!rial has been prepared by us a1 a matter of information only, It is based ut!on Information believed liable but not neceuarlly compl.t., Is not Guaranteed lIS accurate or final, and i, not Intended to foredose Indopendent inquiry. . ;… \' .,… -. – ……