Tabell’s Market Letter – April 02, 1953

Walsto .MEMBERS NEW YORK STOCK EXCHANGE AND OTHER LEADING STOCK AND COMMODITY EXCHANGES NEW YORK PHILADELPHIA LOS ANGELES SAN FRANCISCO LUGANO ISw;twl.,d) , OFFICES COAST TO COAST CONNECTED BY DIRECT PRIVATE WIRE SYSTEM 'rABELL'S MARKET LETTER 'The possibility of a tnlce in Korea brought about an abrupt dec line in prices on Monday and Tuesday and both the Dow-Jones industrials and railS bnoke below the February lows of 279.72' and 106.25 to reach new lows for the year at 277.53 and 105.50. The sharpness of the decline brought the market 111to temporarily oversuld territory and a moderate rally followed. This may cary somewhat further, but would expect a testing of the recent lows next week and possibly some further unsettlement. A decline to 275-270in the industrials and 103,-100 in the rails is a near ,term probability. L, See no reason to alter my opinion that 1953 will be neither a bull or a bear year, but rath-er–a-yed-oJ'-pt',iiTate–;bulland ,bear markets in indivi- ,dual securities. Individual patterns continue diverse and expect a conti- nuation of such action. Possibility of a truce in Korea ,and ,a peace offen stve by Russia might cause temporary unsettlement in some induries, ,but basically it is an extremely constructive development. It migfit mean a moderate cut in defense spending, but would also mean an 'increased possibil- ity of lower taxes. The decljne of 17 points in the Dow-Jones industnial average is the slxth such decline we have witnessed in the past two,years. Previous de- clines from February 1951 to October 1952 were 13, 23, 22 21 and 18 points, respectively. Each decline presented an,opportunitY,to buy' iSSl1es with favora,ble technical and fundamental patterns jus,t as each subsequent advance offered ar. opportunity to liquidate unfavorable situations .. I'expect,this trpe of action to be continued in 1953 and possibly 'into 1954 while 'the genera.l market goes through a re-adjustment and consolidation period. In both my Capital Appreciation and Long'Term Investment'Lists, I have recently advocated a partially liquid pOSition in order to take advant;J.ge u f possi'ole buying opportunities, Breaks like that of tne past week prove the advisability of havlng some cash reserves after' the market haEl advanced sharply However, on further weakness would become m.ore fullY invested. LONG TERM IN'lES'S'MEN'I' In accounts CO!'lcerned mainly with income and longer term price appreciation, I have been advising a 75 invested position antl- 25-in short term- governments, On further-weakness-.,-t-o-t-he' 2'7-5-270 area would now' again advise a 100 invested position. Purchases should be se- lective, however. The following issues appear attractive for both,income and price appreciation i Allis Chalmers Burroughs Add. Mach, Montgomery Ward Alpha Portland Cement AJ'lerican Telephone Crane Company Eagle Picher National Gypsum N. Y. Air Brake () Armstrong Cork Electric Autolite Otis Elevator Babcock & Wilcox Elliott Company Sylvania Electric (p) Blaw-Knox General Rwy.Signal U. S. Gypsum Briggs Mfg. Hall Printing Western Auto Supply Bucyrus Erie Lowenstein – (p) – Offered by prospectus only,copy of which is available by request. CAPITAL APPRECIATION In risk accounts concerned mainly with capital appreciatiQn over a six months period, I have been advising a 50 invested pOSition with the remaining 50 liquid in order to'take advantage of buying opportunities, On further weakness to 275-270 in the ,industrials or 103-100 in the rails, would increase invested position to 75, The following issues appear attractve for this purpose ,lleghany Corp. .' Ba t. & Ohio R. R– Beaunit Mills Certa,in-Teed Chic.East Illinois Climax Molybdenum CO-L'.1nbia Broad. CQllins & Aikman, Denver & Rio Grande Fansteel Metal, Interchemical'( Int, Tel & Tel. Miss.Kan.Texas,pfd, Paramount Pictures Penn Dixie Cement Raytheon .( Servel ,( Universal Pictur'es Vanadium Corp. Western MarylandX Western Pa,eific April 2, 1953 EDMUND W, TABELL WALSTON & CO, Thi. memorandum is '!t to be construed as an offr or sohcitation of offers to buy or sell any securities From time to time Walston & Co. or any partner thereof, mar have a Interest In some or all of the securlfles mentioned herein The foregOing material has been prepared by us as a matter of information only It IS ba!ed upon information -beleved reliable but not necessarily comDlete, is not gLlaranteed 03 accurate or final, and IS not intended to foreclose Independent inqUiry ,