View Text Version (OCR)
. -,-; — …' , \'Toiston.lloffmon &Goodin , ,I NEW YORK 5, N, Y , 35 Wt!l1I Strollt PHILADELPHIA 2, PA 1420 Walnut Street LOS ANGELES 13, CALIF SAN FRANCISCO 4, CALIF 550 South Spring Street 2b5 Montgomery Street ,,,;,, DIGBY 4-4141 PENNYPACKER 5 'n7 ,,, TABELL'S MARKET LETTER '. ,,' MADISON '3232 SUTTER 12700 RISTENSON DIGBY 4,4141 hll, ; The market moved in a fairly narrow range over the past week. De- clining tendencies were in force during the early part of the week and the Dow-Jones industrials reacted to a low of 272.28. At the low, the average d reacted 9019 pOints from the early August high of 281.47 or a retrace- ' nient of approximately one-third of the 26.77 point advance from the May low of 254.70. This is the normal minimum technical correction of an advance. , trhe rails, at last week's low of 100.94,had lost 4.64 pOints from the August, – , -hgh–Gi'-l-O .-9,.,-'r-hj.ssonlybout a 20 retracement ofthe 23.04 pOint ad- )lance from the February low of 82.51. The market rallied in the ratterpart ,, of the week and reached a high of 275.93 in the industrials andl03.49 in the ' tail average. Another attempt may have started to reach the 285-295 area in the industrials and 105-110 in the rails. It would appear that volume must increase before these objectives are achieved. On the downside, the 274-273 , level and 102-101 are the important points to watch. 1,' , , LONG TERM INVESTMENT I;continue to advise a 100 invested position n accounts concerned mainly with income and longer term appreciation re- gardless of intermediate term fluctuations. However, at this stage of the market pattern, would cuncentrate holdings in undervalued issues with de- ;' offensive characteristics. AMERICAN TELEPHONE (155t) is an excellent vehicle ', this type. The stock will be ex-dividend the p2.25 payment on September 10. ;' CAPITAL APPRECIATION In risk accounts concerned mainly with capital ' ppreciation over a six months period, I continue to advise a 50 to 75 liquid position. While the market may move somewhat higher over the nearer t'erm, it would appear that lower levels will be reached before the expira- ;'/ t,ion of the six months long term gain tax period. Therefore, it appears pru- ', dent to have a cash reserve in capital appreciation accounts to take advan- '- tage of possible buying opportunities. ,.-,' Like the industrials, the rails have had selective action despite the' ..act that they have bee,p ,iPca steap-y uptrenQ,from the ,June 1951low of 71.78 ,,, t'o the August high of 105.55. The diverse action of the group is shown in ,,c, the two tables below ',' 1951 1951-52 1952 1951 1951-52 1952 '; Price Atchison 92 Hh gw Hh Balt.& O. Pgce Hh 16oW Hh , Atl.Coast 109 82 64 118 Chic.E.Ill. 19 25 14 20 Chic .R. I. 68 61 44 69 Chic.Gt.W. 23 33 18 23 Denver R.G. 77 69 49 82 Chic.Mil.SP 21 30 18 24 Qt.No.,pfd. 54 tn.Cent. 73 57 75 46 52 56 Chic.No.W. 17 28 15 76 Minn.St.Pa 17 21 14 20 19 Kan .City S. 81 tghigh v. 18 75 15 57 9 84 N.Y.Central 19 26 16 20 N.Y.Chic.SL 43 47 35 21 1l;' ' Seat-oard 103 68 47 103 Penn. R.R. 19 26 17 20 Texas Pac. 105 103 77 108 West.Mary!d 21 29 18 24 , I The stocks in the first column are mainly better grade rails. They ', !,'eached their 1951 highs in February 1951 when t1e rail average topped out , , at 90.82. After a subsequent reaction to the 1951 low, this group ,led;the' , rail average to recent highs. In most cases, the recent highs are consider- ' ably above the 1951 highs. The more speculative issues in the second column r' have not fared as well. In most cases they are selling well below the Februa-i',,' iy, 1951 highs despite the fact that the rail average is 16 .above lt9511l1.igh ., J\' These secondary rails may ,be behind the market, and, in the event of ert,futher rail strength, may show better percentage appreciation than the high-' grade issues. With this thought in mind, I have included in my recommen- ded capital appreciation list two secondarY rails. They are Minneapolis, St.Paul & S.S.Marie (Soo Line) and Western aryland. To these two may be added Chicago Eastern Illinois and also Chicago,Great Western. Chicago,East- ern Illinois will benefit from thcreased ceal shipments to steam generating plants for power for atomic energy plants at Paducah, Ky. The other rail, ';', Chicago,Great West.is completing an extensive modernization program and earn-' ing power should improve sharply. Both issues have excellent technical ;patt,rni ;, A switch out of New York Central and Pennsylvania into these four issues sould work out profitably over the longer term because of their better growth, lii,cssibil1ties and technical patteJt!r.ts. , I,;' ,, Au f, vl'i, haye upon em dtm an Interes' In some or tnformtion beheved be illI rel construed ill an offer or solicitation of the securities mentioned here.n iable but not nlclnartl., complete, To,hfseonfffooetrresgutololtrnb!gully.'meeoiArt!i'iuI'aScaMcnuyNraesteelcnuo1r…hlie.ts;itF, rao.mnntutimNne.otnto&,nttiemnnQdef'deW';r\'Ial'oh.I.l.io.tJnrec'tiHTro;tffflemtaInnndoe&pnelyGndoeoItndtwISiJnnbq,umnleraydy. P'J t.,/!, .,..f. '''/'' '''''', ',' ''', ',.,',' ,'f' , ' , ,' ,–,';,' ', .. ,,;',,–,',', ,'