Walston.Hofftnan & Goodwin.- – , -',',,c';,\j un,e.n& c/eo., '-l 3S WallStreet -PHILADELPHIA 2, PA. 1420 Walnt Stroet .. LOS, ANGELES 13, CALIF, SAN FRANCISCO 4, CALIF, 5sq South Spring St,eet 265 Montgomery Street ll;; J DIGBY 44141 PENNYPACKER 55971- MADISON 93232 SUTTER 1'2700 f;',-', TABELL'S MARKET. LETTER ,''-,;;, 1- 'I- \'r .t, 7,' .. ;1/1, , ,'; i' 1', ,,', , a ) ''', r The Dow-Jones industrial average reached a new high this weelc at li; ,,207.44. This compares with last week's high of 266.51 and the May high of i,;' L264.44. By comparison, the rail average continues to lag. This week's high b,; ti'ii'was 81. 25 as against last week I s high of 83.38, and the February high of )90 .82 . c' In addition tOJthe divergent action of the , two , averages, there are ' ,inany ther technical sighs that continue to indicate extreme caution. The ;(j f,'breadch-of-the-market graphs are very unfavorable. Each successive rally in t Utheavrll-gesb.,,, .been carriedforwaI'd,)y; ,q.D,inc,r,eas,ingly s!1la,ller number of !( stocks. This is shown by graphs of volume new highs anq lows, advances and ;;1, i 'declineF,,'moving average action, .etc. These signs of weakening internal ac-l,';! ,tion hae occurred while the average is making neY highs. Such a pattern i;;i ;' has been present 'at every important' top in the past twenty-five years. When ili! i ;the stocks that-are leading the, advance reach levels that over-discount 'the t.' i ,future and buying' cea'ses, the u'Pward momentum of the marKet 'stops llllless ii,, f.'new leadership' takes over. , ,., 7,, L The leaders of the present;advance hav'e, in the great majority of (k ,.;cases, reached their upside objectives. They should be sold on strength'. \,Iovlever, there are a, number of. secondary issues that have favorable long ;'t;erm patterns and have, as yet, shown little market advance. These issues 'ocould e,dvance while the erstwhile leaders are building up wider distribu- IG r !tional tops. If the market declines, these issues should act better defen- r ;;;sively than,'the, general market. ' ' , 'Earlie'r ,in the year, I advised a 25 invested position in long term f;, I ,capital appreciation accounts. This was increased to 50 in June. Would now (,; ',;,advise 'a reduction,back to 25 after the twenty-five point advance from the ;';/' ,'June 10l'/s. ThiS;ad,;Lce ,is substantiated by a sell signal on my intermediate ,.' ).'term gauge ,given taii! week. . I,; i;, , The 25 invested position should be only in the secondary type of p;- tiissue'mentioned-'above'. I am listing below suitable issues of this type. ;,,; ',',The list below should now be considered my recommended list. Some issues ;',1 ;formerly in my . !ist a!,e eliinated- I consider the issues beloVT more su1t-; able under. pesent conditions. ; j- BETTER GRAIJE . ' i;EDJ— GRADE AmericancNews -(33) . ' -1-A/soc .Dry Goods (21) ;.JiL!;, Armstrong cor- (59) , Bucyrus Erie ('22) Endico,tt Johnson (2)'. -Burroughs (17)' 1,,/ Fairbanks 'Iorse' (50). -Carrier (24) t; SPECULi\'l'rITE ri,' ,American Airlines l5P 'Central Foundry(9) I'; Columbia Pictures Eastern Airlines ('(2153) )..,., i-.. rasonite',C31), ' . 'City'Stores (19) Gray Mfg. (15) 'i l ,,' Montgomery tard (69) Columbia Gas (14) Gulf ,Mobile & Ohio (21-). i' Western Auto (49) Elliott (26) Inter'. Tel & Tel (17) j. 'i Freuhauf Trailer. (26) Radio Corp. (23) (' ;' ; l ,' , Hall Printing (18) Hewitt-Robins (26) Lowenstein (30) Raytheon -( 10) . ;.'/ Piegel (11') ,''', United Airlines (28) k,; ' J ; ;' !'; i ' , '.. ' , ' '- National Supply (27) Universal Pictures (lO'r ,'Pacific Mills (38) Western Airlines (13) b Paramount (25) Shamrock Oil (34) '1- i,-'i Smith, A.O. (35) Sylvania (33) Twentieth-Cent.Foy. (20) \,- ,- , ..,7,-'',' ',

.,;,. '''''''',' Walston.flofflnan &- Goohviu t;'';',',,;,',;,ii, ,r' \ ,'\ ' , 1-,,' NEW YORK 5, N. Y. , ';,l' ; 35 Wall Street DIGBY 4-41.11 , ,,'./, '''' TABELL'S ,,ft. ', ' I) of0;!'4tf;U7z& &er PHILADELPHIA 2, PA, 1420 Walnut Street PENNYPACKER 5-51177 LOS ANGElES 13, CALIF 550 South Spring Street MADISON' 3232 SAN FRANCISCO 4, CALIF 2b5 Montgomery Street sunER 12700 LETTER i ,p.',,,,! p'/! I1J (I'; '(' 1',/ 1-,1, ,! -,' ,fIJI' , ' -L ' \ When mei1tion .is made of growth stocks , the average investor F, ,,';Iusuall thlnks of clemicals, ethical drugs or oils. 10st of the cO1panies , ;,)n 'he above categories have had sharp 'market advances n recognition of ,', '.cheir excellent long term prospects. Today's prices, particularly in 'I', '.'icheaicals and drugo, are at levels that very liberally discount these fa- !' ;vorable developments. lliany of these issues are selling at very high price t, g ;..to earnings ratios and yields are very small. i'i There is one growth group, however, that has not yet discounted ;;; ; ,li ts xtremely favorable longer term prospects and wher-e the individual ,,; '.'issues in the group are still selling at l'easonable price levels. It is the ;1, 1/,,'1elec ,.ronics group. . !',, I', One reason, perhaps, is because the industry, its products and \' ,. their application and growth possibilities are not fully understood by the I ;,generl public. I' Electronics, to the layman, was first associated with the electrldl. ';eye and then with radar in World War II. Of course, television is what brin.;s electronics to mind today. But there are many o'her uses, both pre- r i' , sent and poteatial. Electronic research is causing great changes in the ;., ,,fiel( of business and accounting machinery, in micro-wave relays, automatic ;, !,',contl'ols and two-way communication systems. And, of course, electronics ;'has a very important place in the defense program. Military electronics 1,''' ''';,production is expec t;ed to reach a peak annual rate of 2.5 billion in 1952. \,,; I ';, Host of the better known electronic stocks are in the television '/' ;' ;field. Most television stocks have very favorable long term technical ;,0;' 7jpat terns. However, third quarter earnings are expec ted to be poor because .iof the heavy inventory of dealers and somewhat lO'.er stock prices may be I'd witnessed when these reports are issued. Television issues should be !i,,,',,i, (bought on moderate price dips. I favor issues t!1at also have an 'electronic ; , ..,.t research background as well as television assembly. Such issues include , -'Radio Corp.(22), Motorola (47), Philco (24), Dumont (16), Zenith (60). v,' These issues appear more attractive than stocks like Emerson (14), Magnavox ,,; .(16;, and Admiral (24). ;-, ,, There are other issues that are mainllr suppliers to the electronics ' , . indus try. In this group are inc luded suc h issues as Sylvania (34), Raytheon ;; ,(10), Cornell Dubilier (17), General Instrument (8), International Tel & c,'; 1''.,lToenlg (17), term and Standard patterns. Coil (13). Most of these stocks also have favorable , ' ' '! There is a third group of issues that are in electronics indirect- ';, ;. )y. The office equipment industry is a case in pOint. Such issues as 1,' ,'jBurr'oughs Adding Machine (17), Gray Manufacturing (16) and Remington Rand 'I ;i'ip(2a0r)t . are companies in which electronics may play an increasingly important ;'I The issues above that are underlined are part of my recommended i) list. I advise their purchase for intermediate term capital apprec iation, I;provided such purchase does not bring such accounts below the 75 buying i.',;; , L ',,;.','.reserve advised by this letter for accounts of this type. I, ,, , , , August 24, 1951 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN I, Closing Averages Dow-Jones Industrials 266.30 Dow-Jones Rails 79.04 .' rf- 'lt' – . , , ,/' , , '-, , I' ' ' Thb memorandum is not to b. conltrued o!IS iIIn offlr or lolicltation of offer, to buy or sell any securilles From time to time Wa.hton, HofflriJn & Good….' may ' hovi lin interld in loml or all of the securihes mentioned herein Th. fore90in9 material h/ll bun prepared by us as /Ii matter of informdtlt'ln arly , I bdUd , ,; upon informiltion beHeved r.liabl. but not necessarily complete, Is not uaranteed .'11 accurat, or final, and is not intended to forec\o1! Indt'pndf!nl InqUIry. .,'',,,', ,- – '-'',-';'I;-,'r-,,-, ,';-,';7',' ' 7 I', ',' \.. ..-, ' ,',

&Wolston.Hoffn10n.y, ''.;I t,,t;t;,-;. , .. ,.,.. , ' Goodwin,,',' '–, ,'.. ' ,) ct J 1', NEW YORK 5, N. Y. 6.-4M;e;zC (!curUfed PHILADELPHIA 2, PA. LOS ANGELES 13, CALIF. SAN FRANCISCO 4, CALIF. ' t' H t.. 35 Wall Street '., DIGBY 4.4141 , .. …1 1420 Walnut Street PENNYPACKER ss'm ,' TABELL'S MARKET LEnER !'I' li The Dow-Jones industrial 550 South Spring Street MADISON 9322 2b5 Montgomery Street SUITER 12700 e during the past week reached the rI' r.,.. ,—,,' Lt. . . /.', ;j ,I highest price level since June, lS'30 at 271.64 The Dow-Jones rail aver;', ;If' age, on the ot her hand, was still ten pOints below the February high. The 1,''1., r;, New York Times 50-Combined stocks average did not quite reach the May highF;, Recently, severalbalance sheets of the business and financial out ; look have been issued citing both fworable and unfavorable factors in an ;;'' I attempt to arrlve at a decision as to the course of business and the stock; 3 market for the, next, six to twelve Lonths. Perhaps a balance sheet ;of– th i(;/; technical ,condition of the market might be appropriate at this time . . ';.. o!, ; FAVORABLE FAC'l'ORS would inC'lude the following ' ,,' … , !i;, E1. – 'fher'e has been no speculative excesses in the low-priced ,;stockscthat-usually mark the'top of the market. Low-priced stocks-avei7')/.;i ,';. done little market\lise'. The leaders of the market have been the better ;/;, 'd' grade stocks. ii ,,, 2. – A. great many secondary issues have very strong long term, I,, ; technical 'patterns. In some cases, they have been under accumulation for i,'; two years or more and indicate substantial price appreciation eventually. ';,', i' They have done i,, yielding 7 to little 11arketv.J'ise J are 10. They also appear showing excellent earnings J and are to be in an excellent defensive ;' position. 1- . V are low 3. ,There is no selling pressure at the and, in the'main, stocks are firmly held by moment. Brokers institutions and loans lon g 'c. ; term investors. It would apparently tae a decided change in business. ,pros- , ,,. pects to dislodg, e , ' large' amounts of these holdings. . .. 1-. ' . /,'. ,;; on t,f,,; been , 4., formed )WY ith a potnt few and exceptions, no figure graphs heavy distributional tops have '&, of individual issues. Of course ,', these distributiqnal patterns can form rapidly and usually form at a level''c, i/; below thehigh'However, the patterns do not look too dangerous at the ,.,i moment . .Rec('nfL., 'it appeared that some tops were forming but it eventuall!!., ,,' turned out thatthe offerings were absorbed and the trading areas Ilere. pene; j; trated on'the'upside.. . ' . – , ,' ' cl . …. JJI…. , , . ;,7.' Ic'J UNFAVORABLE FACTORS would include the following ., ;/ fj; . ,-.i'. ,;'pespie the advance to new highs in the industrial averageit i the inter,nal action of the market is poor. This unfavorableaction could b ,',' reversed, but until it' is, it suggests caution. While it appears that ,the , 'j ! market is Thursday, strong- 'as ,measured only249 stocks of by the averages, actually up to the close 1422 listed issues reached their high for on' the ; rt, U year in August. ,This is only 17 of the market. In contrast, 376 highs were,/ ,', reached in Jal'vary and 409 in February. To the av('rage holder of stocks, d ;' , the market reached its high in February. '. ,1,/, i The same pattern is present in advances and declines. Over the past;' ' twenty'five'weeks ending August 24th, there have been a total of 14,447 , ; issues advancing ,as against 15,692 that declined. This is despite the 'fact , that the averages are at a new high. The same is true of volulne. At the i ; February top, t''le twenty-five week total of volume was c lose to 300 mil1iOI;1' i' shares. At the week ending August 24th, the twenty-five week volume had, … t';,; l;' dropped to 186 million. Upside volume; has dropped even more sharply. on ,the' c' ,,' tllenty-five week totals. It was c lose to 200 million in February, arid was F, ',/', around 99 million for the week ending August 24th. 2. – On the point and figure charts, the great majority ' of ,, the r,;',' issues that have led the market have about reached their objectives .. They .,' must re-form accumulation patterns at these or, more likely, 10l)er .levels. /, ', For the market to carry forward, new leadership must bo found. . i, , Some groups appear to have formed tops and seelO to be in long ,term ;,' ! downtrend., Motors and steels are examples. Some of the papers have poten- I '. I, tially dangeous patterns. ;,; —n.. Tmarket in '1 921t. , -i'9G51enaenrda l Mot 1946 o,rGeirieiaichracli-.Moitt6srsl-lr.iegahc long neCl. be its fo n re igh 'tOllfe,54…..n,374r-aol'n-7;',,,I ',; Oct.5, 1950. It closed at 50 on Friday. ' i-' , 4. – The rails have acted as a barometer since 1942. They have',, \i led almost every.advance and decline of ioportance. Present action is un- 'l favorable as witness successively lower highs of February, May and A)lgSt ', ;;—- ; !,t7'/' 11. Ifran n onltrued as an offer or lolicltation of offers to buy or have all Ifered in lome or all of the 'securities mentionld herein th. foregoing mater IJ'\Jt'.'hbi,J.J'.!clI,1iV.fpite.s parF.qqUrlp(. i'Ib' -. efuWar lfJd2WG.t!tlf'W\T'1..wo.lq\l,..1&'IyGooItdwIillbumeady; — /i' upon informtlon bllilVtld rlnable but not neceulIrlly complete, b not ;Juarllnteed a5 accurate or flilal, and j, not intended to forecl05e indtlpendent inqUiry. , V'; ' !!tL\0;,'i,''in;);, ,.;7;;''' ,'.,. J.';,!.;,'),;.;,' ,,; '7 ,;'! , ', …'..!– ,. .I'. '!-'.'i.' ',; ,. /' ,! c , '….., …. ' . , .' /

, .'J'r' . ., , , ' , ,, -II NEW YORK 5, N. Y l-, 15 Wall Street DIGBY 44141 PHILADELPHIA 2, PA 1410 W41nut Street PENNYPACKER S5977 LOS ANGELES 13, CALIF. SAN FRANCISCO 4, CALIF 550 South Spring Street 165 Montgomery Street MADISON ,2)2 SUTIER 12700 ', ), i, TABEll'S MARKET lETTER 1(' , ,I ,' -,, Last week I issued a balance sheet of the technical condition of ';the market citing both favorable and unfavorable technical factors. It would appear that the clue for present policy is contained in the (,;two fac tors re-quoted below. One is favorable and the other unfavorable. ,',I t ',', FAVORABLE ,Y,I, ,',,' A great many secondary issues have very strong long term technical patterns. In some cases, they have been under accumulation for two , years or more and indicate substantial price appreciation eventually. They have done little marketWise, are showing excellent earnings, and are yielding 7 to 10. They also appear to be in an excellent de- fensive position. ',', .f. ;;', , ',,– ,,,'' UNFAVORABLE On the pOint and figure charts, the great majority of the issues that have led the market have about reached their objectives. , , They must re-form accumulation patterns at these or, more likely, ,, lower levels. For the market to carry forward, new leadership ', , mus t be found. ,, The market leaders of 1951 have been the oils, chemicals, ethical '- 'drugs and rubbers. They have been bought, particularly in the earlier e ;,.,stages, by larger investors, both institutional and private. Recently a , more speculative element may have entered the picture. These companies have ,' /been extremely popular because of their excellent growth outlook, but at 'ipresent prices it is possible that they have more than adequately discount- ,, ,ed this favorable potential. In any event, from a technical viewpoint ,most ,,',of these issues have about reached their long term upside objectives and ,'appear in need of at least a consolidating period if not a technical ;' 'correction. Even the most favorable situations become temporarily over; 'bought at times. 'e'.' , On the other hand, there are many secondary issues that have held in ,, ;, narrow trading ranges for several years and appear to be under accumulation i ',In many cases, these issues are just a shade below the quality that would .;,,' ,,make them eligible for inclusion in some institutional portfolios. With the , ; general public in a rather apathetiC buying mood, these issues are neglected, ;,',As a result, they present excellent values. An undervalued issue of medium , '; quality can quite often be a better investment than an overvalued blue chip. The main complaint against issues of this type is usually – They are ' ',,;,so slow. They never move. Market memory, unfortunately, is very short. Som; 1,of the greatest advances in the past two years have been issues against jwhich the same complaint could have been levelled. It takes ti'!le and pa- ,,' ,-, 'tience to build up strong base or accumulation patterns. ''., ', For example, here are a few issues that were formerly in my recom- i'mended list – I,,; PFIZER (on an adjusted basis) held in the 15-20 range for three , years. The recent high was 46 5/8. I AMERICAN CYANAMID was a slow moving issue for almost three years ;,',when it held between 35 and 45, yet two years later it reached 13l. I REYNOLDS METALS not much more than a year ago was still holding in I,;the 18-25 range which it had occupied for three years. The 1951 high is 58.; , WHEELING STEEL back and filled between 13 and 21 for over three ', .- years. It managed to attain a high of 43 1/2 this year. ' SEABOARD AIRLINE R.R. accumulated in the 15-25 area for three years ,,' ',before reaching the February high of 61. Ii UNITED AIRLINES from early 1948 to mid-1950 was available in the ,;approximate 10-17 area. The 1951 high was 310 ', Many other examples could ,be used both in higher grade issues and ,'those of a more speculative category. The secondary issues present, in my opinion, the best holdings in .' t ';todayls uncertain market. My recommended list of issues of this type was ','published in the letter of August 17th. Copies are available on request. ,, 'i,This list will be added to when the occasion warrants. For long term apprei;clation accounts, continue to recommend a 25 invested position in equities i e 'of this type with the balance to be kept as a buying reserve. i,Stember 11 EDMUND W0 TABELL , W m;, This memorendum IS not to be conltrued liS lin offer or olicitlltion of offerl to buy or lell 'f.m a n, mod .. ln may '; /' hllv, an interelt In 10m, or till of the ucurHiel mentioned herein, Th. foregoing material has been preparect br us tiS tI mlltter of inform.s!'n .orly I. bl1ed I upon Information believed ,.lIabl. but not neuuarily complete, is not uaranteed a5 CiCCI/rat. or final, and is not intended to forecl010 In(\iH!n-lMt IrqUlry y .-. ..' ,' . '-'.-. ,-.;…..-.;''-… ;..–;'.r!;–,, ,-..,.,' ,, ',, -,.- ;,', ,,-,-,;,,,'–,.'-;'–;; ''''–;S, !.– ./..;.;- . – ,'.- . ',\', .-X

&Wolston.HoUllIon Goodwin f '-, .. '/ . ,' , .I,f!'.,I 9-.,/' ;f (' , NEW YORK 5, N. y, PHILADELPHIA 2, PA 35 Wo/III Street 1420 Walnut Street DIGBY 44141 PENNYPACKER 55911 -, tT TABEll'S. MAItKET lETTER LOS ANGELES 13, CALIF 550 South Spring Street MADISON 9-3232 SAN FRANCISCO 4, CALIF, 265 Montgomery Street SUTTER 12100 1.. ' ' .,I J ' . t'''f '2' I 'I ; f j;nflation or deflation The government, most economists, and more rJ1 'cently, the stock markE't,are predictihga continued inflationary trend. Sum..i;;; -imaries of recent articles appearing in The Commercial & Financial Chronicl-Ej'; ,.care illustrative – );,; ;;; In detailed analysis Dr. Wolkiser maintains that rearmament, budget def f-' cits, wage-raising labor policies, rising incomes and reduced production ;f of consumer goods on the one hand, and United. States military and finan- ,-j cial support of our economically weakened allies on the other, provide th ,- background for continued strength of inflationary forces. Concludes the c-', inflationary trend will prevail until a decision is reached in an in- t;' evitable East-West Hot War. t';, . -Or the following – .', I .-, Dean McCarthy cites as potent inflationary factors the fact that consu- mer income is increasing about 20 billion a yeaI' and constant rise in ,'/ wages Wihout compensating gain in productivity. Says price suppor,t pro- ;. gram has ,sapped foundation of our agricultural economy, and attacks need- less govenment spending and low moral standards in political life. Warns- economiC s,ecurity cannot be attained by playing off one class against another. \I \ ,,,' , Howeve'l, other articles in this excel'ent periodical present a minor ity viewpoint \such as – ,, Referr1.n& t6 his previous analysis of inflationary and deflationary for…(-'- ces in current economic Situation, Mr. Sears, after presenting a statistt- !!tl!ecff;eswitrte ;; ;j' ; are deflationary rather than inflationary implications in recent develop -', ments. Sees no likelihood of shortages in any field arising from proposed- ;,' level of defense expenditure, and concludes potential inflationary pres- ;,- '., sures have been over-estimated. ; . f; The last ten pOints of the advance in Dow-Jones industrials from the- ;, June lows. has been based largely on continued inflationary pressure. The ;-. 'market leaders of the past ten days have been the metals, oils and other groups that. would benefit from an inflationary background. The fear of in- , flation has caused the market to forget the threat of higher taxes and lowEiii – earnings. If such fears are groundless, and deflationary factors are to be' -in the ascendency, it would be expected that the market would work lower. ;- From a technical market action viewpoint, I am more inclined to follow r the deflationary opinion at the moment regardless of the fact that I believe', we are in a. long term uptrend cycle !n stock market prices. ', As I.have been stating ever since 1948, I believe we are in a long term uptrend in stock prices that started in 1942 and will CUlminate in , 1957-1960 at a level considerably above the 1929 high in the averages. Long' . term advances usually consist of five phases. Three of advance and two of '–' decline. The first phase of advance was 1942 to 1946. The second or declining phase was 1946 to 1949. We are now in the third phase started in June 1949' , at 160 in the Dow-Jones industrial average. It now has a time span of twenty-seven mbnths and an advance of 117 points or 73. I believe it is near its top and that the next iml2.ortant mov,.e will be the fourth or declining phase 0 f the long term pattern. Before that, '' .- happens the market mayor may not work moderately higher but purchases at ,this level are hazardous in the extreme, except for the short term trader ,who is willing to move rapidly. I do not attempt to forecast these short '. ' term fluctuations because I know of no technical indicators that are more /' ;than very partially reliable. , How far will the market decline in this fourth phase In my opinion, ; ' -c the decline will be relatively mild. It might result in a retracement of , i', one-third to high is made. t wo-thirds In terms of the advance of the present from high, the June low of this would mean 160 to whatever',–' a decline to ,, , , somewhere between 240 and 200. The pattern is not clear enough to suggest i, '; 'which of these two alternatives is the more likely, but I believe it will ;.- be nearer the lower objective. C — EDMUND W TABELL ' Sdr.hbemheQ'ItJ 111 JO 1IS'Y' o/In interesT in some or anb19ln.tl..d 0/11 an offer or solicitation or'ifa uCllrlhe. menhoned Iter,in Tohf .offfoerresliltooingbuymaotrer,iael IhelnWb!elenlpreNpaFrJidomfi;HeVIFFonMaAlm\rTtewr&o'f oiaoOrmOD(W'I 'Mrt;odI'1' b'ased;- ;,,' upon Information b.heved reliabhl but not nlluuanly complete, is not ;II/arantead as accurate or final, and is not intended to foredon Ifldn;..ndent .nqult ,

h'-,,' , NEW YORK 5. N. Y. t , 35 Wall Street i' I ' DIGBY 44141 PHILADELPHIA 2. PA 1420 Walnut Street PENNYPACKER 55977 I'' ;,'.,,. TABELL'S MARKET LETTER LOS ANGELES 13. CALIF 550 South Spring Street MADISON 9232 SAN FRANCISCO 4. CALIF. 2bS Montgomery Street SUTTER 12700 -, 1 1, . .- l. .. -,' '.',i For the past ten days the industrial average has held in a trading — irange bounded by 277.51 and 271091 with volume averaging above two million sha1'eS daily. This is the heaviest volume since the present phase of the ..advance started on June 29th. The character of the market also has changed. '. (ome of the chemicals and oils and drugs that have been the market. leaders 1, ;-up to this point are showing signs of liqUidation. Despite the fact that ;- the industrial average reached a new high during the week, Standard Oil of ,-,' -'New Jersey reached its lowest price since July. On the other hand, the c ;, rails and some of the secondary issues have been stronger and volume in C..',- ;. 'ome of the very low priced speculative issues has increased sharply. The .– ..,.lowered quality of leadership is not encouraging, particularly after a sharp- . ,advance in prices. The fact that the industrial average on Friday broke be- i.'low the low of the previous ten days to reach 270.21 is also a cautionary signal despite the fact that the rails are in an uptrend and closed un- -'. 'Changed on Friday while the industrials closed 2.16 pOints lower. .-i c If we look at the market from the viewpoint of individual issues rath than the averages, the technical pattern appears to be somewhat clearer. '- Several pOints are outstanding h ' ; (1) The market leaders of the summer rise appear to have reached or i-' ; .about reached their upside obJectives. They have formed only minor tops ,'. 'but are vulnerable to profit taking. .-f (2) There are numerous better quality secondary issues Just a shade ,,'. tbelow institutional quality that still have favorable technical patterns , t and appear undervalued. Whether or not advances in this type of issue will -,,, .) );ake place immediately, or will be delayed until after a general market re- ;!- actIon, is not certain. However, most of these issues are of good defen- 'sive quality and should react only moderately in the event of a decline. ;- , (3) The above paragraph should not be confused with the outlook for tI.ow grade speculative issues. Most issues of this type have mediocre techni- . cal patterns and indicate very little marketwise at the moment 0 They appear – ;to need considerable time before they complete their base patterns. , (4) From the minor tops built up in the leaders, it is possible to 'estimate a decline to about 265 in the industrial average. This level is ; the first support pOint. After that, another rally attempt is to be ex- Z; l;buti pd down fluctuations might result in building up larger ' The above four pOints suggest that the market will hold in a rane bounded by roughly 280 and 265 for the next few weeks. During this 'period, , Iindividual issues will have Wide price movements. After the pattern is com-to !')pleted, the extent of tile next move will be indicated. The direction of (the move is not yet certain but from my technical work, I believe it will be- downward. ; For the short term trader, a period such as this offers excellent ; trading opportunities. But a word of caution. A possible distributional ,/pattern of this sort ends quite abruptly and can result in severe losses. ', i,The trader should be willing to abandon commitments if storm signals appear.' ,- \. For the intermediate term trading account interested in long term ,tpapital gains, the situation is different. The outlook six months from now ls uncertain. Would confine commitments to better quality secondary issues ,with favorable technical patterns and have 75 of funds liquid as a buying , ,,' ;1.',res er ve. For the long term investor depending on income, I continue to advise ! a fully invested position but would concentrate holdings in issues of prime .' .; investment and defenSive ,quality. ,. ,… September 21, 1951 ;', Dow-Jones Ind. 272.11 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN ., Dow-Jones Rails- 85.34 II,.',, '1 , i This memorandum is not to be construld as tIIIn offer or solicitation of offlHS to buy or lell any 'llcuritiel. From time to lime Walston, Hofftrlln & GoodWin may have an Interest in some or all of the curliles mentioned herein The foreqolnCiJ material has been prepared by us 11 a matter of Informdfitn OTly I' IS based .7 upon information believed reliable but not neceuarily complete, Is not ;uIITanteed .III accurate or final, and is not Intended to forec;1os1 inde;)f'ndnnt lIqulry i;i, -,,,.'' '.;.',-'..;—;;;-,.,..'J..,.;!'J/ ',,,- 2..',.–….;., ,-r..;X'Y,-, ',,-;.';..'';',-.',;;- ',.;'',–;,,'–,''',.!';.''7.', ..', '''- '- ,,'i.;; -.-

I ';'—T' \—-'-;1',,''.''– '!. ' 7 /' I' ,,. .;, NEW YORK 5, N. Y 0- y 35 Wall Street t1, ' 0 IG BY 14I41 PHILADELPHIA 2, PA 1420 Walnut Street PENNYPAeK-E5'S 7.7 LOS ANGELES 13, CALIF 550 South Spring Street MADISON '2)2 SAN FRANCISCO 4, CALIF 265 Montgomery Street SUTIER 1-2700 -';! ;- I i'',; TABELL'S MARKET LETTER ' ; ,! ,; ,. , , i! ,- n;',1 0 There is no clear-cut indication to be derived from the action of the ,) !.;'averages at the moment. The industrial average appears to be in the process, ' 'of correcting the recent sharp advance to 277.31. It has broken out of its ;, I uptrend channel from the June lows and also is selling below the average price of the last twenty-eight trading days. This week's low was 269.08. f l The next support point is around 265. The rails have shown much better ac- ' . f-;tion and, at the week's high of 87.04, had passed the May high of 86.51 but't. tt',were still below the February high of 90.82. This average is showing indi- ;, ;cations of bullding up a potentially strong technical pattern although more ;,ttime may be required. It has reached its near-term upside objective of 85-87,; f'i;and some consolidation is indicated. For the longer term, the most construct. ;;'ive pattern would be a continued trading range in the 87-79 area. Selection, 'is very important in this group as individual issues have quite diverse .' ; patterns. The only rail on my recommended list is Gulf, Mobile & -Ohio. This ;, ,',.issue is showing above average action and reached a new high for the year ,,, ,!;thiS week at 30 3/4. The June low was 21 1/2. Action of the rails will be '; ,,watched closely and additional issues recommended at the proper time. \( The market appears to be slowly building up a top pattern but there 1/;1',is no indication as yet that this process has been completed. A much clearer picture of the general market pattern is given if one ,', ',' ' f ',Lobserves the action of individual groups and issues rather than the market ','- j averages. For example, while the averages have reached successive new highs ';, i in October 1950 and February, May and September of this year, some of the ,;' more important groups have not followeQ. this ac tion. Mos t of the motor ,;, ,'(stocks reached their highs in October 1950 and most of the steels reached ;,,; ,(their tops in February. In both cases these highs coincided with their long, ,; ,iterm technical upside objectives. Since that time, they have backed and (,; ;,I,filled and have built up potentially dangerous top patterns. The leaders ofc; .I I 1,,Lthe July-September upswing were the chemicals, oils and drugs. In most cases ', \,,;these groups have also reached their long-term object ive at recent highs. ;iTheir patterns differ from the motors and rails only in the fact that they'.; ; have not yet built up potentially dangerous top patterns. It may take fur- , i; ther time and more backing and filling in a trading range before the distri';''', butional pattern is completed. . ' , ','1 In contrast to the groups that appear to be topping out, there are ''', ,i;'-;many better quality secondary issues that have very strong long term pat- I, terns and have done little or nothing marketwise. Many of these issues are i,,just a Shade below top quality, have excellent earnings and are selling at ,2'J; r;prices to yield 6 to 9 or more. Issues of this type appear undervalued , J ('and in a position to move ahead. The 64 question is whether they will do ; i, so immediately while the erstwhile leaders are continuing to fluctuate in a , ; 'wide trading range in the process of building up the1.r distribut1.onal top ; ;, ,patterns or whether they will await a genera'l market decline before start- '; i,,ing their advance. In any event, issues of this type appear to be the most favorable buys,- , 'at the moment. In the event of a continued rise in the market, they should ;;! ''show above average advance. In case of a general market drop, they should ,' 'decline less than the averages and be in a position to lead the next advancer' ,',because they already formed strong accumulation bases. For these reasons, I ' ' have advised that capital appreciation accounts, interested in six months . ' ,hOlding, should be concentrated in issues of this type plus a large cash I/, , reserve of buying power. ' Listed below are some better-grade secondary issues. The sto.cks mark- , ted with an asterisk are new additions to my recommended list , merican News 33 Columb1.a Broadcasting 28 Marshall Field Blaw Knox 19 Ell1.ott 27 National Supply hBucyrus Erie 'BurrQughs '-'i.'Carrier 23 Fruehauf Trailer 17 '-Gray Manufacturing 22 all Printing 26 N. Y. Air Brake 15 ……. Smith, A. 0 18 20th Century-Fox Certain-Teed 16 Hewitt-Robins 27 Western Auto 30 27 21 37 21 49 .- 7, ' , ,- ……,. City Stores 19 'Lerner Stores 26 '; September 28, 1951 EDMUND W, TABELL I';,' WALSTON MOFFJI'IAN & GOODlrl-.1.nlll-lThIS m.morendum is not to b, construed as an offer or sol.citetion of offers to buy or sell any securifi!, From time to time Walston, Hoffrloll'l & GoodWin may !',I have an interest In some or all of the securities mentioned herein The foreQolng material has been prepared by us .Si e matter of ,nformall(,!i 'I'ly . I baed upon Information believed reliable but not nIIcenerily complete, is not lJlIrlanteed as accurat. or final, and is not Intended to foreclose mdEptndnl1f Ilqu.,y -,''''',—,';;'-'J-'——-'''I– —- —,',','- — ;,- –.r—- .,,; . .;–'-''-,,;,-. —.;,-.,—- , ,' ',…

Walston HofJ'luan G-Goodwin(,',''''''',–,– .!,',.' ,', 1..!; , . – '-. — 0– ' –''–''-'—'–'''-''''-'Ti'). .-;1, -;,,,-!,-,,-,,,,, -i!kP!'-;J–l ,I /. NEW YORK 5, N, Y Q,YJ'N-e.6 (I'c PHILADELPHIA 2, PA LOS ANGELES 13, CALIF. SAN FRANCISCO 4, CALIF. k , 35 Wall Street 1420 Walnut Street 550 South Sprin9 Street 265 Montgomery Street F,- l I DIGBY 4.4141 PENNYPACKER 55977 . ,l',' TABEll'S MARKET lETTER ,, MADISON '.232 SUTTER '.2100 'h i 'C2'1 ,,G, \! ., ,',,1 i!.ij U The correction of the September advance to 277.51 in the industrials ;''and 87.04 in the rails ended last week with the industrials holding above – ';the 265 support level at the week's low of 269.08 and the rails completing ;, i','their needeq. consolidation at the low of 84.40. Starting Monday, the market; reversed its minor downtrend and moved ahead to the expected testing of thetj, i'year's highs. The rails rallied to a high of 87.73, a shade above the Sep- tr., /,tember high of 87.04 but still below February's high of 90.82. The indus- i', 'trials, at this week's intra-day high of 277.30, did not quite reach the J' ,' ,last month's high. The market appears a bit tired after its sharp five-day t.;;;Orfalalydaencdl i again appears in need of some ne should furnish some indicat consolidation. ion of the next Its action intermedi in ate case move. ;i,-E !F.- , Regardless of the sh0rter term action of the market, the general tech l'nical pattern remains the same. Most of the market leaders have reached ;,their upside objectives and appear relatively high when probable 1952 earn-/, ,.'ings are considered. Many of these higher grade issues have started to form, ,' ,potential distributional tops but others have only started such patterns. ; ,Therefore, the timing of a downward adjustment is uncertain. The timing is L, ,further complicated by the fact that the lower pr,iced issues have not yet ;, ;.;'had the usual market ,,;tributional pattern. rise that generally precedes the completion of a dis- ,t,,'c, ,j r Many of the secondary issues have favorable technical patterns and t'- 'i t is possible that issues of this type may advance over the near term. Thist, ,may hold up the general market for a few months longer but the technical , ,pattern suggests the probability that a stock market correction of at ;.. least intermediate term proportions is to be expected some time in the ,,'next six months. .' ( '!.-, ',t I ;\ Whether this probability becomes a certainty or not, it seems wise (, i;to make some provision for it in long term capital appreciation accounts. i ,'rhat is1 WhYdI advlocadte a Idarge biUYing pOiwther rteserve anhdiamlbuYtintg or hOIld- ,,;,t ing on y un erva ue secon ary ssues w s rong t ec n ca pa erns. , ';omentioned several issues of this type in last week's letter. Some of them, , , like Bucyrus Erie, Elliott, Fruehauf Trailer, National Supply, New York , Air Brake, Twentieth Century-Fox and Western Auto Supply have advanced 1–, –.! ,; ',moderately during this week's strength. J , l r,'.'!,, , 1'1above Other issues that appear are the following undervalued in addition to those mentioned ', ,, American News 34 Gray Mfg. 16 ; isw. i ;!/!!nlass it .-', Burroughs 17 Hewitt Robins 27 tc ' Carrier Corp. 23 Lerner Stores 26 ,; ; Certain-teed 17 Marshall Field 31 (, ,-,1 City Stores 19 McGraw Electric 51 . ' Columbia Broad. 28 Otis Elevator 38 ;';, ; Columbia Pictures 15 Poor &' Co. 19 ;' ' Cuneo Press 14 Smith, A.O. 36 ' I 1 Standard Steel Spring 23 /,' New addition to our recommended list. , i;;October 5, 1951 ;.' Dow-Jones Indus. ; Dow-Jones Rails 275.57 86.99 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN ','b, I l ..!if; ;.' H -;; 'J Thh memorandum is not to b. condrued IiIS an offer or solidt.tion of off.r, to buy or ,II filly s.curiti.s From tima to tima Walston, Hofr,.riln & God… ir—-;;;;;- r\- /; have an inte,ut in some or all of the 'ecuri'le, mentioned herein. Th. for.qoln; material has b..n prepared by us as II matt., of rnfO'mdtl( lr'ly I. h btlsed r Ii upon information b.II…..d rellabl. but not neuuflrily compl.te, Is not ;uaran…d .. aceur. or final, and Is not Intended to foreclose independt'lnt ;r-qulry -v,,',,l.,,',.,,,c'I,,,,,',',-',.,',.,,',',',-',',',',,'- ., .,.,','',,,',',,',',,,-.,',',,,,' ,',, . .,.. ,',II-,''C.,',,,,7// ,- I'-'—,.;-,.,..'-.,,'i-… ',,..,.';,j-,,../,'C'/i,I,i!'.f,—-7','.,','- ''-'I/(,,' ,', ',.'…\;

— ——————————– , , , NEW YORK S, N Y , 35 Wall Street , DIGBY .4141 PHILADELPHIA 2, PA 1420 Walnut Street PENNYPACKER 5-5911 LOS ANGELES 13, CALIf, SAN fRANCISCO 4, CALIf, 550 South Spring Street 265 Montgomery Street MADISON 'I 22 SUTTER 12700 /, ! r' , , TABELL'S MARKET LETTER ,I;' ,',1' , '1 ', )I', It would appear that the industrial average will furnish the clue as,- ' to the direction of the nearer term price trend. While the rails last week i , 'were able to better their September high of 87.04 to reach 87.80 and are ini' I', a position to again test the February high of 90.82, the industrial average', ,,,, has acted rather sluggishly. This average reached its high in mid-September i,-at 277.51 and reacted to 269.08 later in the month. Last week's rally carrid the industrials back to 277.30. This week's low was 271.46. An upside pene-, , tration of the 277.51-269.08 trading range would indicate a continuation of' ; ,the uptrend from the July lows. A downside penetration might have consider-', ' , ably more significance and indicate a top of at least intermediate term ;'proportions. ,',' However, regardless of the action of the averages and the general (,-' market, there are a great many individual issues that have strong long term ,,, ',' technical patterns. In looking over the graphs of a number of individual ;,' ' issues showing the monthly price range Since 1929, it was interesting to note '''how many issues were selling below not only the highs of 1946, but also the ,highs of 1937. Of course, this does not mean that these issues are necessari- , ,ly undervalued or behind the market. In fact, quite the reverse is more apt ;' ,to be true. The fact that these issues have been unable to better former , , highs usually signifies a lack of growth potential. The great majority of 'growth stocks are selling above their 1929 highs as well as 1946 and 1937.' However, when a stock is selling below its highs of 1937 and 1946, ',,-, ' ,and has an upward trend of earnings plus a favorable long term technical ( , 'pattern, it merits some conSideration. Below are three issues in my recom- ,,, mended list….. AMERICAN RADIATOR 122l ',- High 29' 23 1612 -a ', , ,, ' Earnings Dividend 68 95 2.05 ' 60 40 1.25-1.59' ,.' This stock has paid continuous dividends since 1936. It has built up ;,,,' a very favorable long term technical pattern. It has held in the 10-17 po- , ''', tential base area since 1946. While no immediate move is necessarily indi- ', cated, the eventual objective appears to be an initial' 25 followed by 35. /-' ; Would buy this stock for patient long term appreciation plus good yield. /!, BURROUGHS ADDING MACHINE 1937 1946 19'51 High Earnings Dividend 36 5/8 21 3/4 1.63 '40 1.40 55 18 3/4 1.55 90 ,, ,, — Dividends have been paid since 1895. Earnings have been erratic over; , recent years and in a downtrend since 1929. However, the stock appears to f, ,have turned the corner. It held in the broad 13-17 range for over four years. – The recent upside penetration indicates a long term 31. Action may be Slow; , but the stock appears to be under accumulation and should be bought on minoe' ' price declines. I', OWENS ILLINOIS GLASS 1937 1946 1951 ',,r' I', ' High Earnings 103 3/4 100 3.51 4.53 89 6.50 , Dividend 3.25 3.50 4.00-4.25, Estimated. a – So far this year. , The stock has paid a dividend each year since 1907. Largest manufac-,' ' turer of glass containers. Has 42 interest in Owens-Corning Fibreglass CorP. ';Ii, Has favorable long term growth prospects. Recent penetration of 74-82 trading '; area indicates a possible 95-105. Good support at 80-75. Long term potentiaJL, I ,much higher. ,'- , All three of these stocks are recommended for purchase in long term ,' I capital appreciation accounts, provided there is also a large backlog of re,, ,;'', serve buying power. EDMUND W. TABELL ; October 11, 1951 Dow-Jones Ind. – 274.10 Dow-Jones Rails 86.88 WALSTON, HOFFMAN & GOODWIN ,' Thill memorandum is not to b, con,trued at lin offer or solicillltion of offen to buy or sell lin)' ,ecurlti from time to time Walton, Hofln')11 & Goco ….. ,n molY ho!lve olin interelt in lome or 1111 of thl lecurltlel mentioned herein The foregoln9 mo!ltetlal hal been prepo!lred b UI al o!I matter of Informt,,,1'\ orly I' I I.H'lu!d upon informo!ltlon believed reliable but not neceulHily complehl, is not ;uuanteed al accurate or fiul, oIInd II not Intended to loredou inf'pnder.t Irq,my \.

— — NEW YORK 5, N. y, 35 Wall Street DIGBY' 44141 PHILADELPHIA 2, PA 1420 Walnut Street PENNYPACKER 55'77 LOS ANGELES 13. CALIF 550 South Spring Street h4ADISON '22 SAN FRANCISCO 4. CALIF. 265 Montgomery Street SUTTER 11700 ,., , , The market sold off sharply in the last hour of Friday's trading and the Dow-Jones industrial average declined 3.83 to reach an intra-day low of 269.23. Further weakness would result in a downside penetration of the 277.51 to 269.04 trading shelf in which the industrials have held for 35 trading days. The rail average penetrated the downside of the shorter twenty-day trading range between 87.80 and 84.40 to reach a low of 83.63. , A downside penetration by the industrials would have conSiderable technical significance when coupled with generally deteriorating long term technical pattern that I have been mentioning recently -, in this letter. It would, in my opinion, indicate the end of the t,'!. approximately thirty-seven point advance from the June low of ,. i, ' 240.72 in the industrials. The fact that the rails failed to reach the February high of 90.82 on this rally, despite the fact that the industrial average advanced more than twenty pOints above the February high, lends credence to the thought that the market may have reached at least an intermediate term top. As mentioned in recent letters, the market has appeared stronger than it actually was. Strength in a relatively few issues caused the averages to advance while wild gyrations in a few speculative issues concealed the fact that the majority of stocks were making little upside progress. A study of forty-one graphs of individual groups showed that twenty had reached their highs prior to July 1st despite the fact that the averages reached new high territory. The internal action of the market as shown by the number of advances and declines, new highs and lows and advancing and declinir volume, and other factors, has been confirming this divergence of action that occurs at all important tops in the market. ,. , Such a decline, if it occurs, would meet initial support at about 265, but would most likely show an ultimate dip to the 260-255 area. That would be all I would expect 'on the first phase of the decline. If a full intermediate correction is in ii /',,' the offing, the market would have to rally from the 260-255 area to further broaden the tops in chemicals, oils and other , ' recent leaders that have only relatively minor tops at the moment. For intermediate term trading accounts interested in long term capital gains of six months or longer, my advice continues the same as that mentioned in recent letters. The outlook for the next six months is uncertain. Would confine commitments to better quality secondary issues with favorable long term patterns. I would use only 25 of available funds for issues of this type and keep 75 of funds liquid as a buying reserve. , ,, ,, ,,' , October 19, 1951 Closing Averages EDMUND W. T ABELL WALSTOW, HOFFMAN & GOODWIN Dow-Jones Industrials 269.68 Dow-Jones Rails 83.79 ! ,', ',' ,, .– r;', Thll m.morandum b not to b. con,tru.d 41 an off.r or ,olicitation of off, to buy or Mil any securitiu From tim. to tim. Waldon, Hoff'r,-,r, & Gocd'll1 may ,! hu. upon an lnt.rest in '0m, or Information b,lI,v,d all of th, curitl.s m,nhon,d her,ln Tlilabl' but not n.ceuerily compl,t Th, fore90in9 mat.al Is not u/lr.nteed aI hal bun prepared by UI at a matt acclff.t, or final, end il not intended of 10 toInf.oclon!;,i,n,!o!fo';'YlloleIr'.1 I blUd Il'q'.my if, ' , ,' ;'l;;'C';;,/;;..!,, !!.f,'!!,;/i,f,, ,' ;,,,/' ';11,,1,' I, ,,';;7, /- ',', ,',',!,\ ,'; I ' , , , i