Tabell’s Market Letter – January 02, 1953

– – – – – – – – – – – – – – – – – – – – – ——– ' ; I ''' -i I I .!- NEW YORK 5, N, Y 35 Willi Street DIGBY 44141 PHILADELPHIA 2, PA 1420 Walnut Street PENNYPACKER 5-5977 ;–, ,— TABELL'S MARKET LETTER f,' LOS ANGELES 13, CALIF 550 South Spring Street MADISON '3232 ,,'c,' cc' , , -I ,, -I ;r,'-, ' -; -…. SAN FRANCISCO 4, CALIF f,,', 2bS Montgomery Street SUTTER 12700 ;-' ,',2 c'; 5 1'- r-; ,;'-, ,It has been my belief for a considerable period of time, and it is still my belief, that we are in a long term war and postwar upward cycle ' in prices similar to that of 1914 to 1929. I believe the advance started in 1942 from 95 in the Dow-Jones average and is still headed upward The World War I advance lasted for fifteen years. Considering that, the present advance started from a relatively low level of stock prices,and after ten years of a low level ofibusiness and economic conditions,it appears reasonable to expect that the present long term advance may last some' what longer than the 1914-1929 mafket. I project it forward to approximately' 1960-1962. It also appears reasonable to expect that the 1929 high of 386 ,, will be substantially surpassed. An advance of only 40 from present levels ' would bring the industrials to thEl 1929 highs. This does not appear to be ;'' an unreasonable expectation over a period of the next eight years. Many;' ', issues are now selling considerably above 1929 levels. Quite obviously – such an advance will not be in a straight line. ;\; c' ,' eleven In the moves o f last more two years, than 5. StihxElIhDavoew-bJeoennesonintdhuesturpiasildeavaenradgefivheashhavade , been on the downside. However, the action of individual issues has been , quite different from that of the averages. The steels, for example, reached '-, their highs in February, 1951 wherl the average was only 254. The chemicals .-' c and textiles reached their 'in January, 1952. I expect highs in September, 1951 this selective action to and the oils and continue in 1953 metals with r, Fmoves in both directions by both the averages and by individual stocks. I do not expect 1953 to be a bull of a bear year, but rather a combination ofr 'both with private bull and bear markets in individual securities. ,' I, Since 1949, I have stated Ititat the market leaders would be the high grade blue chip issues with the speculative issues doing little or nothing This has been the pattern up to now. I believe the market leaders on advan-, cing phases over the next two yearl.s will be the light blue chips — the ,,, issues slightly below the quality lof the blue chips. These are issues with t, good dividend records, good growth prospects and high yields. There are a / ',great many that have just started Ito move. I do not believe the very specu- '-; –,lative, low-priced issues are reaqy to move ahead on a broad scale. They ,;; will come into the picture at a l!j-ter date after the consolidating and re- i ' adjusting phase is completed. Group action in 1953 will be extremely diverse, 'and selection will be all important. ,c Listed below are a number !of issues that I believe fit into the 5 ,– light blue chip or speculative investment category I 12 Mos. , ;-;; American Chain & Cable 'I Price Div. 30 2.50 Yield 8.3 ; ;–, Armstrong Cork Babcock & Wilcox Bendix Aviation Blaw Knox Briggs Mfg. Bucyrus Erie Crane Company General Railway Signal Hall Printing Joy Manufacturing Lowenstein Penn-Dixie Cement Smith, A.O. Vanadium 53 3.10 5.8 37 2.00 A 5.3 A 61 3.75 6.1 18 1.25 7.0 37 3.00 8.1 25 2.00 8.0 31 2.25 7.3 35 2.50 7.1 16 1.30 8.1 36 3.12 8.7 33 2.00 6.0 32 2.00 6.1 35 2.00 5.7 43 2.40 5.6 I, ,' Western Auto Supply 56 3.75 6.7 ,, , II ' I January 2, 1953 A Plus stock dividend. EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN , , .- ' '',–,- ,; '-, Thh memorandum II not to b. construed as an offer or solicitation of offers to buy or sell any securities from time to time Walston, Hoffman & Goodwin may hav an 1ntrst in lome or all of the securities menhoned hrein. The foreQoing matrlal has been prepared by us as a matter of Information only It is baled , . . ,-. 1 …,. ';; ,,,,, . . '. …'''';. ',. '''''', ;. –