'– -' -, —…r;T7 I' -. -,,-'. – '-'-,'- jr..,. t;' ;1;1,,; fAil 'I NEW YORK 5, N. Y. PHILADELPHIA 2, PA P', 35 WaU Street t DIGBY 414141 1420 Walnut Street PENNYPACKER S-5977 i'';' – – – . , . – – – – – – – – – – LOS ANGELES 13, CALIF, 550 South Spring Street MADISON 9-322 SAN FRANCISCO 4, CALIF, 265 Montgomery Street SUTTER ''700 I;;;, TABELL'S MARKET LEnER , !' '- '; , '!'I ,.,I' ;' VI II'q',,!!,,1I,i \\-,'\ ;-\ During the early part of the past week, the market drifted slowly ''iLower on small volume. The industrials, at the early Wednesday price of ;,,244 .98, were at the lowest level since the March ,14th low of 242.06. But ,,;, '-;the rails, at Wednesday's low of 79.23, held above the previous week's L I,' rt',,',' ,;, -,,, 'l'; 1(78.65 bottom.. In line with their barometric action of the past two years, iI ii,t,'the firmness in the rails waf a signal for a sharp rally that started in ' ',the last hour Wednesday. By Friday, the industrials had rallied to a high !of 252.22 and the rails to 83.53. At Friday's highs, both averages were ,plose to very heavy overhead resistance. There is considerable supply at f t,;,253-255 in the industrials and at 84-86 in the rails. It ma require some hews development of major importance to enable the market to penetrate the ' ;1',pverhanging stock. \; '; The longer the market remains in a trading area Similar to the , ;','257.06-242.06 range of the Dow-Jones industrials, the more dynamic will be ,,'; ;ithe move in either direction. 4t the moment, an upside penetration of this' I'trading area in the industrial average would indicate a potential of about ;',;260. A downside penetration would indicate a potential of about 236-232 , ';' 'This last objective is somewhat lower than the previous objective of 240- ',;, ;,,236 because the recent rally may result in the broadening of the possible ;,top. There are Similar patterns to the above in the other averages and ,'ln individual issues. !I The direction of the next near term mdve is uncertain but my work ;j', 'iipontinues to favor the probability 1tional top pattern. Both averages that we are slowly building a distriburemain in an overall downtrend Since 1, (' ,the February high of 257.06 and 90.82. Even a mild upside penetrat1'on by , !-;,one of the averages would not destroy this potential top formation. Sharply ( , 1''increased volume apparently would be needed to penetrate the overhead ,,,,7 i,iresistance. Volume indications remain relatively unfavorable up to the , '(present. Thursday's volume of 1,790,000 shares on the sharp upswing was below the 2,330,000 share trading of March 12th on the decline. I., ,' At Friday's close, the market gave some indications of losing its ', 'momentum on the short term upside move. While both averages reached new highS, volume dec lined from the previous day and there were 601 advances if 'l'in individual issues against 840 on Thursday. A-lso, declines increased to 273 on Friday as against 133 on Thursday. This action coupled with the ', ,f'indications that the market is near overhead supply and that the short ;, term indicator is now in overbought territory, suggests caution. ','; ',; I still advise 60 liquidity in intermediate term trading accounts ,;; Las t week, I suggested fifteen issues for purchase at specified prices and t; ;',;;an increase to a 60 invested position if the industrial average reached ;'the 240-236 area. I would not ,follow this procedure at the present ti(lle ;because the rally may have broadened the potential tops. I would remove ;;,the buying advice on the f'ifteen issues mentioned in last week's letter ,!,u n t i l the pattern clarifies. Only one issue of the fifteen, Lowenstein, reached its indicated ,,' ;;', ' , ';' '' !',','purchase price. Lowenstein, Which was originally recommended at 19 and y;i;,the sale recommended at 36, reacted to slightly below the indicated 30 ' ,,, ',cbuyiilg level and is now included in my recommended list 0 ,0, f , 6, 1951 EDMUND W TABELL WALSTON, HOFFMAN & GOODWIN – J ,, , Closings Dow-Jones Industrials 250.83 Dow-Jones Rails 83.02 , i' ThIS memorendl,lm Jt'J\ot to 'b. construed as an offer or solicitation of Offeu to buy or sell any secur.lull frm time to lime Waldon, Hoffman & Good….. mell' have an Interest in some or all of the securities menticrUld here.n. The ,fore90,ng ml!lhmr has been preparfd by IJI as II matter of information only It h bued upon Informl!ltion tfeved reliable but not neuuar.I, complete, is -kot ;uaranleed ./IS, accurate orfinal; IS not intenged to foreclose independent inquiry. – ';7;.I'. –'1;, -,1 — -, – ,.-, . .– – I ;';T,;-,-\ ,-! I/– – –7'- – –

f-' ,-,'1 -I,';J;'-',; ,'-!'–,; Walston.Hoffman c,. Goodwin ' , –,-;—'– c,– -''-r- 1'11 ff /' ,-, ! cy;4mned U/eoe i ,- '1' '-, NEW YORK 5, N, Y PHILADELPHIA 2. PA LOS ANGELES 13. CALlF SAN FRANCISCO 4. CALIf, ';- ! ''-, 1- I 35 Wall Street r DIGBY 44104' ,Z–z, 1420 Walnut Street PENNYPACKER 55977 550 South Spring Street MADISON '31)2 265 Montgomery Street SUTTER 12700 ,.! 1l'! 'Ii./..-, \ TABELL'S MARKET LETTER k ;I – '.-, ,. I n,,-,1 , .;. r ;.,;ol Nervousness over MacArthur's ouster and a fear of a nearby end Z f'to hostilities brought selling into the market early Wednesday and the in- , cdustrial average reacted to a low of 247.70 and the rails to 80.99. The , ;. market steadied after the first hour selling. At the lows, the uptrend ;; tfrom the March bottoms of 242.06 and 78.65 still remained intact. As the tweek wore on, fears of peace appeared to dissipate and, aided by short i covering, the market rallied moderately on Thursday and sharply on Friday i! ';; to attain highs of 255.31 and 83.63. ;';;;, ;'f. At Friday's highs, the industrial average was less than two poin(iS (', away from the February high while the rails were more than seven pOints be— ( low the comparable top. Considering that the industrial average sells fOUIL t; times ,higher than the rails, and moves over ,a much wider range in terms of 'I;, ;,-,- points; this is a considerable divergence. It would appear that the indus –' trial average has enough momentum to test and possibly carry above the !c' 'February highs to reach 260-265. However, it appears doubtful at the mo- –, '-ment that the rail average will be able to penetrate the February high of ;c-; 90.82. ;- .- It still appears to me that, from a teqhnical viewpoint, we are –, ; -in a broad distribution area that may cQntinue to form for some further ; cc time. In some respects the pattern is 31-ping up somewhat like the 1946 ,- – '-, top. It will be recalled that the industrial average reached a high of – . around 207 in February and the rails 68. A sharp sell-off followed. The '-' industrial average rallied to a new high at 213 in late May but the rail '-average could do no better than reach its former high of 68. This was -'c followed by some further distribution at slightly lower levels and the .,.-September break. .' .'' The action of the market must be watched closely on the preseilt L– ',– rally. New highs accompanied by a weakening internal market pattern such , .- as fewer new highs and adva'ces in individual issues and declining volume 1 as compared with the previous advancing phase is usually a pretty reliable i- –indication of a deteriorating technical pattern. As yet, the present phas; ,– of the advance is too young to draw any definite conclusions. It may be , ;,-noted, however, that Friday'S volume of 2,120,000 shares was less than the i– , last heavy day of downside volume of 2,330,000 shares on March 12th. It , -was also well below the average volume of 4,500,000 shares in December and;- r 3,500,000 shares in January when the rally from 220 was starting. ' – From a short term point of view, the advance could carry some- -i;- wha t further. From a timing viewpoint, the advance is just entering over- i- bought territory and several more trading hours will be required before a ;-' short term selling signal can be given. .'-'.,. ' However, this letter concerns itself with the intermediate term ,– .;- of several months rather than short daily and weekly fluctuations. From r i atn inttermdeddiattehtelrdmi pOintAof vdiew, thtiS hard21Y;oaPiPeatrhs tiodbetthiealPSrWopeUrld i; i me 0 a 0 0 ngs. n a vance 0 even ( n e n us r 0 ' be only 6. iHth most individual issues at or near their indicated ob- ''- tjectives, a percentage advance of such a small amount is not worth follow- -ing,considering the risks involved. On the contrary, would rather lighten ; holdings on further strength and build up a buying reserve of 75 in inter…;,,- – mediate term trading accounts. — Large capital gains are made by buying stocks on \'ieak;eas after t– — sharp declines and not by following strength after an already st0ep ad- , ,-' vance. This requires conSiderable patience and ability to ignore the illusion of a perpetual advance. I still believe that a worthwhile buying i; ;- opportunity will present itself before the start of my expected advance to !– —; a level above the 1929 highs of 386. r,, April 13, 1951 Closings -'- – Dow-Jones Industrials Dow-Jones Rails 254.75 83.44 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN ,– '- '- ' ,- , Thh memorandum it not to b. tOndrl/.d a. an off.r or solicitation han an Int.r.st In some or all 01 the Itlel/rltil. mentioned h.,.ln. of off.rs to bur or s.1I lhe 'oreQoln; material any s.turltiu, from tim. hIS been pr!pared by til to tim. Wahton, Hoffman IS ,a matt.r of Information o&nlyGooItdwIsinbameildy ,,' !t upon information beneved ,enabl' but not necessatil,. tompl,t Is not u.,anleed a, accurate or fInal, and Is not Intended to for.tlose Independent InqUIry, !4 f- r';; ';I,,,!JI,';r7, ,i,; ;''7;/,,71';'; I,';,,; -I ;t',;'dtl't;',;'5' I'; ,;,1,;7' ;, ; 1/';, ;',;'Y '; ,;' ,- ',', –'\ ..

— Walston. Hoffnton 6- Goodwin ,0 ,' ''.'' , ',' tfmed a/ece 't't '- NEW YORK 5, N. Y. PHILADELPHIA 2, PA. 7,,,..'1 35 Wall Stroot 1420 Walnut Street ,,;', DIGBY' 4.4141 PENNY'PACKER 5-5977 ————– ,t TABELL'S MARKET LmER LOS ANGELES 13, CALIF 550 South Spring Shent MADISON '-31)2 SAN FRANCISCO 4, CALIF 265 Montgomery Street sunER 1-2700 i.,I, .,-'',-.,t ; Under the leadership of the oils and chemicals, the industrial l average reached new high territory on Friday at 259.95, and appears headed \'1 for the 260-265 area mentioned in last week's letter. While volume picked 'C, ; i/ up on Friday to reach 2,120,000 shares, it still remains well below the average turnover of the January-February rise when the industrials topped ;,' ; out at 257.06 and the rails at 90.82. ,- The rails, which have been an accurate barometer of market action ,' in the past, continue to act badly in comparison with the industrials. With, ', the industrial average above the February high, the rails are approximately'' i', seven pOints below their comparable high. At Friday's high of 84.07, they'- 'i, are still below last week's high of 84.83. ', ' An increasing number of advisory services and market letters are ,,,, advising the purchase of airline stocks. United Airlines is perhaps the \, most widely mentioned. As our older readers know, the airlines have been ' consistently recommended in this letter since 1949. In January, 1950, the ,',airlines were nominated as our favorite group for price appreciation in ,1950. At that time United Airlines was selling at 14. I had previously , , 5mentioned it at 10 1/2. Then the airline stocks had few friends. They were c, ',– considered extremely speculative and without appeal. Few trusts included ,airlines in their portfolios. However, throughout the 1949-1950 period the , airlines were building up strong technical patterns although they did ,, ' little marketwise. Now United Airlines is selling at 30 and is extremely ,' ' popular. I concur in the thought that United Airlines will eventually ;, sell at a price considerably above present levels but it is interesting to if; ,, note the potential difference in percentage appreciation from present levelii' '' as compared with that fro', the early 1950 price. Suppose United Airlines !' iequals the fifteen-point rise from our recommended level of approximately E,; 15. The technical pattern indicates that a rise to 45 is entirely possible';'; over the longer term. If this occurs, the purchaser of the stock at a price; ,; of 30 would show a percentage appreciation of 50,but the purchaser at 15 ''' 'would have 300 appreciation or six times as much if he had originally in- ',.c; f',' vested the same amount of money. ,' This illustrates the point that large capital gains are made by t' ,,, buying undervalued situations at low levels before these issues have gained' – public popularity. This sometimes requires considerable patience. Quite , ! often there will be a period of prolonged backing an6 filling before the ' advance starts. Patience was required with Reynolds Metals at 20 and Sea- ,-' board Airline at 15 to 18, to mention only two of our recommended issues, V but the ultimate advance was extremely rewarding. Even at today' s high levels of the general market, there are 1 numerous candidates for eventual long term appreciation for the patient holder. They will be mentioned in this letter as conditions warrant. One such situation previously mentioned is the motion picture ,' group. There is no doubt that these issues are currently unpopular and the ' ,,reason is, of course, not hard to find. Television has caused a sharp drop' , in movie attendance and the future of the industry is in conSiderable doubt,' ,However, current pessimism may be greatly exaggerated. It is entirely possi;-' ; ,'ble that the television and motion picture industries will eventually be -' ;7allied instead of competitive. It would seem a logical development over a ',; period of time. The technical pattern of individual issues indicates the 'i, ,,,possibility of such a development. These stocks have held in narrow trading; ,; ranges for over three years and have formed substantial potential accumula-', I' tion bases. They appear thoroughly oversold. ', For the patient holder, I recommend the following issues. , Stock Price 190 Earn. 150 Div. Yield ,;;-' ''- lColumbia Pictures 13 2.58 .75 5.7 ', ParailOunt Pic tures ;20th Century-Fox 23 21 2 .67 3.16 2 .00 2.00 8'.7 9.5 , , ,!Universal Pictures 10 1.14 , Warner Brothers 13 1.46 1.00 7.7 ,' Again I repeat that these issues are suitable only for the patient ; long term holder interested in substantial percentage appreciation. For ,-,those interested in trading turns there are undoubtedly scores of more in- teresting 1SSlIes if yOll can fjno them '; 1 n! -, !'\ A Pl Iblt em .,dum iaileln In upon Information 'l' it. beleved b. con.trued as an olfer or solidtalion of the securitie. mentioned her.ln, reliable but not necessarily complete, Toihfseonffoofetrne;guotoainrbgaunymteaeotdrer.,ienalllahd.J,ll.! \!.Ie!'iJ)..tRl.)ltel..J!i9!1tFelJ'odnmd1,.'(tt.t.i..1.110p. PJaHJ..3&t,l..Mi..r..m.i!iPon.llHtWilratlos&ftfonlon.rfoHrmoflflDmtlWoannfo'&n6l,(IGe.o.no11dtwI,iinnqbUlmli!reaydy , ' '; ', ,..',' , '-' ' ' ',' .. i X;ft,-f,7/tl'7t.,'/f,Bf!fYT9il\f'J,7IE ;t '/ ,I'., ' ', ' ',7,- ,!,;, ,i.f!.;,'!'; '; ,9;,';!; ;,'' '', — , ',– '..