Viewing Month: October 1961

Tabell’s Market Letter – October 06, 1961

Tabell’s Market Letter – October 06, 1961

Tabell's Market Letter - October 06, 1961
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FILE COpy NEW YORK Walston &- Co. Inc. Members New York Stock Exchange SAN FRANCISCO LOS ANGELES PHILADELPHIA CHJCAGO OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER October 6, 1961 The stock market, in the latter part of the week, turned in a fairly impressive p r formance. On increased volume,the Dow-Jones Industrials reached an intra-day high of 714.07 on Friday. Even more significant was the action of our shorter-term breadth inde which, for the first time in a long while, managed to match the action of the averages, be – tering its levels of two weeks ago. If this continues, and longer-term breadth also impro it will be possible to become more optimistic on the immediate outlook. I However, insofar as the industrial sector of the list is concerned, it is not yet possible to let bullish enthusiasm become rampant. The Dowhas just aboutrunout the up side count of the tiny !ase formed in the 692-697 area, and is just under the heavy overhe d supply existing at 715. The most bullish possible pattern would be continued backing and filling at present levels before an attempt-at penetration of this supply is made. Until this happens, it is best to reserve judgment as to the intermediate trend. As has been noted in many places, however, the action of the rails over the past few weeks has been a good bit more encouraging .than.that of,the industrials. As most in- vestors are aware, the Dow-Jones Rails this week bettered their August peak, reaChing a intra-day high of 152.24 on Thursday. While various counts are possible on both the Dow Jones Rail average and the Standard & Poor Rail Index, ability to follow through on this high would indicate a move of at least fairly substantial proportions.– possibly to the 160 180 range on the Dow and to the 45-49 range on the S & P Index. Many investors tend to shy away from rail securities, becoming somewhat confu e by the mystique of ICC accounting and the highly technical jargon about carloadings, main e nance ratios, etc. which usually accompanies most rail attractive at this juncture in comparison with their indust 'a c simple reasons. (('0 1. They are measurably cheaper than h Actually, the rails appe sJ.or a number of ver sis of both earnings and divid,enQ'!. Yiel!s th,e four .S. '. recommen5!ed list — At-, chison, Topeka & Santa Fe, Northern Paci!, boar line and Southern Railway — range from 4.7 to 5.2 on n e appears virtually assured. This compares with a present Wbw-Jones Industrial average. The price earnings ratios for the our s c ten and fifteen times depressed 1960 earn ings, and between si a c yDow Industrials 1 t' 1955-59 earnings. The current PIE ratio for the 2. Contra t the' ression held by many investors, earnings of the better- grade rails have shown e measure of growth. It is quite true that a railroad, by the very nature of its 0 ation, will have its revenues adversely affected by the business 'cyc e However, almost all of the better southern and western roads, including the 'four on our list, have tended to show substantial earnings improvement from cyclical peak to cyclical peak. There is no reason to suspect that this action will not continue. 3. 1962 earnings for the higher quality equities should show marked improveme over both 1960 and 1961 results. Excellent earnings comparisons are already beginning to show up as carloadings and revenues, and, above all, operating earnings, reported each month, show impressive gains over year-ago figures. 4. The above factors apply largely to better-grade rail securities. However, the more speculative equities have an attraction of their own, based largely on the fantastic leverage contained in both their-Capital structure and their operating ratios.For example, Chicago, Milwaukee, St. Paul & Pacific had operating revenues in 1960 of 108 per share'. 'comparable figure for Chicago ,Northwestern was 187. The earnings improvement whic even a small change in profit margins can generate in roads of this type is,of course, tremendous. 5. A final point in favor of the rails must be noted in the huge savings which will occur through mergers now in the preliminary stages. In this connection, it must be emphaSized that the regulatory authorities tend to move at a ponderous 'pace and many merg now being discussed will not be consummated for a number of years. Nonetheless, the mo e toward merger has gained impetus and will continue to do so. For all of the above reasons, in today's uncertain market, the conservatively pri high-quality rail equities deserve representation in every investment portfOlio. vow-Jones Ind. 708.25 ANTHONY W. TABELL D-ftWmJgnfiiPr 1Aumstnnces IS to be construed as, an offer to sell or n solic\ Ion !iuy any secUrl 1(3 -herein The informatiOn contnmed herem IS not guaranteed ns to accuracy or completeness and the furntshtng thereof IS not, and under no clTcumstnnceS IS to be construed us, a repre,entn- han by Walston & Co. Inc. All eltpresslOns of opimon arc subJcct to change Without notice Walston & Co. Inc. and Officers, Directors, Stockholders and Employees thereof, purchase, sell Ilnd may have an Interest In the seeurltJCS mentIOned herem. ThiS market letter JS zntended and presented merely as a gCl!crllJ. ltltormnl commentary on day to nay market news and not as II, complete analYSIS AddltlOnaIlnforrnntlOn With respect to any S('cufltH!9 referred to hereIn Will be ' ' \\N JOt

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Tabell’s Market Letter – October 13, 1961

Tabell’s Market Letter – October 13, 1961

Tabell's Market Letter - October 13, 1961
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FILE COpy NEW YORK Walston &- Co. —–Inc. —….; Members N e10 York Stock Exchange SAN FRANC'SCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER October 13, 1961 Last'week's market was essentially trendless. This was to be expected since the advance in the previous week had carried through just about to the overhead supply existin from the previous top. The improvement in shorter term breadth mentioned in last week' letter continues, but it would still be premature to become optimistic before this improve ment is also reflected in other technical indicators. This has not yet taken place. At this time, with many stocks selling near their lows, many investors are exhi i – ing an inclination to seek bargains among issues which are suppossedly depressed. It therefore appears appropriate to repeat a comment on this philosophy which originally ap peared in this letter in April'; 1957. -', -'- –, -' -. —- , – One of the most common questions which iR asked of the market analyst runs as follows 'XYZ is down from 85 to 37 in the past year. Do you think the stock is 'ready to buy yet' Such a question is a fairly natural one. After any stock has declined sharply in price, the normal tendency on the part of the public is to feel that it must be a bargain. Unfortunately, such is seldom the case. As Harold X.Schreder has often pointed out, much confused thinking concerning securities results from the fact that they are considered in terms only of level. Few peop e realize that a stock is a moving object and, as such, has two other qualities in addition to level — namely direction and momentum. The airplane, also a mOving object, is often us for purposes of comparison. Two airplanes, one in a steep climb and one in a power dive may, at a given instant, be at the same level. It appears obvious that one would feel much safer in the former than the latter. The airplane comparison may be carried a step further. An airplane that has just landed must spend a good deal of time taxiing along and then taxiing back for a takeoff. A stock also, after a sha,fe de i e, 0.1 ost invariab1 spe d a long time in a sidewise trading area, backing – re .' major advance takes vulnerable to serious losses.. cO . This fact was h the 1957 letter and can also be de- monstrated today. As wade of the market in the week ended October 28, 1960, the w t s strials made a low of 564.23. Over 300 issues made new lows tha dom sample of 100 of these was taken. Of these 100, the 25 that acted wor t ov e previous year were selected. If the depressed stock theory were valid, it d be expected that these stocks would have 'done well from October 1960 to date. Such, however, was not the case. Despite the fact that the Dow- Jones Industrials have advanced some 260/0 in the past year, 15 of the 25 stocks failed to eqUal this advance, and the average for all 25 was well under the performance of the Dow. Two of the stocks even managed to decline further in the face of a major bull marke Therefore, picking stocks that had declined sharply was not a particularly valid meth of achieving investment success in 1961. Our original study pointed out that it is almost equally senseless to worry about stocks that have had a sharp rise if technical and funda- mental work proves that the stocks are suitable for purchase. Indeed, strange as it may seem,a stock is often a better buy while it is making new highs, or after it has moved up sharply after a long period of sidewise movement. Thus, on Thursday of this week some 42 common stocks achieved new highs. The performance of these stocks was studied over the past year and the 25 with the best advance from October 1960 to date were selected. Had these stockS been down sharply during the bear market of January/October 1960 Not at all. Eight of the 25 had posted advances in a market that had declined 160/0 from its January high, and 16 of the stocks ha declined less than the Dow .'!he conclusion drawn in the 1957 letter can be repeatedIt is almost alway more profitable to buy a stock which is at or close to making new highs than it is to buy one at the bottom of a decline before it has formed a base. This is due to those elusive qualities, direction and momentum, which are all too seldom considered in making capital appreciation decisions. ANTHONY VI. TABELL Dow-Jones Ind. 703.31 WALSTON & CO. INC. Dow-Jones Rails 151. 'itt This market letter is not, and under no Circumstances IS to be conltrued as, an offer to sell or a sohCltatlOn to buy any securities referred to herein The mformahon contluned herem 15 not 1fU8ranteed as to accuracy or completeness Bnd the furnlshmg thereof is not, and under no Clrcumstunces is to be construed as, a bon by \Vnlston & Co. Inc All ClprCSSlOns of opinLOn arc subJect to change WIthout notu!e Walston & Co. Inc. and OffIcers, DlTectors, Stockholders and Employees therrof. purchase, Bell and may have an interest m the seeurltles mentIOned herein ThIS market letter IS mtended and presented merely as n general. informal commentary on da)' to day market news am not as a complete analYSIS AddItional information with respect to uny seculIties referred to hereIn Will be . . . ,

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Tabell’s Market Letter – October 20, 1961

Tabell’s Market Letter – October 20, 1961

Tabell's Market Letter - October 20, 1961
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———- — Walston &- Co. Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER October 20, 1961 Upon my return from a three-week business trip to London and Scotland, I find very little change in the technical pattern of the market. The Dow-Jones Industrial aver age is practically at the same level as when I left. After a downside breakout of the 733- 710 area to a low of 688.87, the industrials rebounded to a recovery high of 714.07, but appear to be meeting heavy overhead supply at around 710-715. The Rail average, on contrary, has shown excellent price action and has reached a new 1961 high at 153.60. However, the improving price performance of the rails is not a new development, and since August several of these letters have drawn attention to the rails. The Rail continues to irfdicate iiigher levels w itli- a possihlerally' potential tottle 160-170 range. The Utility average has shown, by far, the most impressive price action and has moved sharply into new high territory. At Friday1s high of 130.90, the Utility average is 6.4 above its September high while the industrials are 4 lower. The utilities have been sho\lH ing excellent relative strength action for a long time. However, many individual utH ity issues have about reached their immediate upside potentials and some consolidation ap- pears in order. There is no important change in our longer term breadth-of-the-market index. It continues to act worse than the market. The breadth index reached its high in May when the Industrial average was at 714.69. Despite the new high in September of 733.53 in the industrials, the breadth index failed to reach a new high by a sizable margin. In the recent decline to 688.87, the breadth in1ex declined below the level reached at the July low when the Industrial average was 674.80. As mentioned before, poor breadth action is a warning of deteriorating market momentum rat t an indication of an immediate decline. These warning signals usually occur x a year before the market averages reach their high. In 1959, h in e t d down nine months before the Industrial average reached its hi V;1n 1 6- 7, the breadth index and average reached the 525 h1gh ofApr 1, 1 a triple top in June, 1957, some fou 0 It is entirely possible that t aVi wa m 0 fact occaSlOns ana fmally reached s r the breadth index turned down. a new high somewhat above the 733.53 market is in a br d itO that may take as long as six months or more to complete. Durin a 10 ndividual issues will undoubtedly show sizable price advance, but streng s 0 e used to lighten commitments when upside potentials are reached in each i aual issue. The main t chnica1 difficulty in the market since May has been a loss of buying interest rather than heavy selling pressure. Upside volume has declined very sharply since May while downside volume has shown very little change. Just what could happen to restore the buying urge in most issues is difficult to ascertain at the moment. The main prop is an improving business pattern that promises to continue into 1962. However, with the averages selling at twenty-four times immediate earnings, the market has already discounted quite a sizable earnings increase for 1962. A loss of investor confidence could bring about a lower evaluation of earnings even though actual earnings increase. As this letter has continually stressed, the intermediate term action of indi- vidual issues is much more important than the action of the averages. With that thought in mind, we have suggested taking profits in a number of issues in our recommended list over the last six months when individual price objectives have been reached. Two utility issues in our list have about reached their upside objectives for the intermediate term and are being removed from the list for the time being. They are Pacific Gas & Electric (96 7/8) recommended at 75 3/8, and Southern California Edison (93 1/3) recommended at 66. Both stocks were added to the list less than a year ago. Y.'e are also dropping American Stores (97) , recommended originally at 74. Dow-Jones Ind. 705.62 Dow-Jones Rails 150. 14 EDlVlUND W. TABELL -oVALSTON & CO. INC. 'I'hls market letter is not, and under no circumstances IS to be construed AS, nn offer to sell or a sohCltation to huy nny securitIes referred to herein The Information contmned herem IS not n'l to Recuraey or completene'lS and the furnlahmg thereof IS not, and under no Circumstances 15 to be construed as, a representa- tIOn by Walston & Co, Inc. Ali expressions of opmlOn arc subJcct to change Without notice Walston & Co, Inc, and Officers, Directors, Stockholders and Employees thereof, purchase, sell and may have an mterest In the securities mentIOned herem Th15 market letter IS mtended and presented merely as a general, mformal commentn.ry on day to day market neWB and not as a complete nnalyslS AdditIonal Information With respect to any secunbes referred to herem wIll be furnished request.' WK 301

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Tabell’s Market Letter – October 27, 1961

Tabell’s Market Letter – October 27, 1961

Tabell's Market Letter - October 27, 1961
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Walston &Co. Inc. ;,.–…;….;… Members New York Stock Exchange NEW YORK SAN FRANCISCO lOS ANGELES PHilADelPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER October 27, 1961 The stock market sold off on Monday and spent the balance of the week in an attempt at a partial recovery of the losses. The week's intra-day low of 693.77 on the Dow-Jones Industrial average held above the September low of 688.87. Both the Utilities and Rails declined moderately, but at the week's lows of 127.81 and 148.10 were consilOE!Jr1 ably above the comparable September lows of 119.80 and 140.80. The Industrial average has held in a relatively narrow trading area between 714.07 and 688.87 for twenty-five trading days. Prior to the formation of this trading shelf, the Industrials had held in a similar-orange between 733..53-and-7-09. 54–forthirty-trading days.-T–his area was ,-ofcourse, broken on the downside. From a timing viewpoint, several of our short-term technical indicators pOint to a probable end of the current market impasse in the Industrial average in the next week or so. Various trend lines are near converging points and should furnish a more definitEj indication of the hitherto obscure shorter-term trend for the balance of the year. We continue to expect at least a test of the 733.53 high early in 1962. Whether the advance will start from around present levels, or from a somewhat lower level, is still problel1ll1 atical. Over the past three months, while the Industrial averages were slowly drifting 'lower and more issues were declining than advancing, there were a sizable number of issues that moved against the trend. This selectivity will continue. The market is probably at a stage where the technical action of the general market is of much less im- portance than that of individual issues. It is probable that the averages will move up down in a comparatively wide trading area, but be in uptrends and downtrends of their own entirely independent from)He i g \ eral marke t. We have tried to solve the problem of of stocks from which issues are dropped or added -ttilrty-nirie'1ssues nave b 'su' a recommended list oc on warrants. Some – profits. This list is for intermedi new complete list will be a 'la at least six months or longer. A your Walston office early next week. tials over the Ion e -t to the recmme t/'y Pri ce American Viscose 54 Anderson Clayton 42 Cluett, Peabody 77 Colgate Palmolive 48 Diamond National 49 Intern'l Minerals Chern. 49 Johns Manville 60 , Kerr McGee 41 North Arner.Aviation 50 Panhandle East. Pipe L 49 PhiliipsPetroletim 56 Sperry Rand 23 Stevens, J. p. 33 United Shoe Machinery 63 U. S. Plywood 49 Woolworth 86 ed below. Earnings 1961 (E) 1.75 4.50 (1) 5.00 2.70 3.00 3.50 (2) 3.00 3.00 (2) 3.50(3) 3.80 3.35 1.00 (4) 2.40 (5) 4.50 (6) 3.75 (7) 5.00 J. P. Stevens & Co. is a new addition P IE Ratio 30.8 9.3 15.4 17.8 16.3 14.0 20.0 13.7 14.3 12.9 16.7' 23.0 13.7 14.0 13.1 17.2 Anticipated' /. Dividend 2.00 Yield 3.7 2.00 4.8 2.75 3.6 1.40 2.9 1. 60 3 1.60 3.3 2.00 3.3 .80 2.0 2.00 4.0 1.80 3.7 1.70 3.0 stk. 1.50 4.5 2.75 4.4 2.00 4.9 2.50 2.9 (1) Year to end July, 1962. (2) Year to end June, 1962. (3) Year ended Sept. 1961. (4) Year to end March, 1962. (5) Year ended October, 1961. (6) Year to end February, 1962. (7) Year to end April, 1962. Dow Jones Ind. 698.74 EDMUND \'1. TABELL

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Tabell’s Market Letter – October 30, 1961

Tabell’s Market Letter – October 30, 1961

Tabell's Market Letter - October 30, 1961 page 1
Tabell's Market Letter - October 30, 1961 page 2
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— ' October 30, 1961 RECOMMENDED LIST OF STOCKS SELLING ABOVE 20.00 A SHARE EDMUND W. TABELL Close 10/27/61 American Metal Climax 36 1/2 American Optical 67 American Potash & Chern. 55 1/8 American Smelt. & Ref. 59 American Viscose 53 3/8 Amderson Clayton 42 Arkansas Louis. Gas 42 Atchison, Topeka & S. F. 28 1/8 Audio Devices 24 7/8 Boeing Airplane 50 Canadian Pacific 24 3/8 Carpenter Steel 42 1/2 Caterpillar Tractor 37 Central & South West 44 Chicago & Northwest 22 3/4 Chicago Pneumatic Tool 32 1/4 Cluett Peabody 78 Colgate Palmolive 47 3/8 Collins & Aikman 48 1/8 Columbia Pictures 28 Consolidated Mining & Smelt. 21 Consolidated Natural Gas 65 7/8 Continental Insurance 62 7/8 Daystrom 38 5/8 Diamond National '487/8 Dome Mines 25 1/4. Domhion Tar & Chemical 18 Eastern Gas & Fuel 447/8 Electric Storage Battery 50 EI Paso Natural Gas 26 1/8 Ex-Cell-O 42 3/4 FMC Corporation 847/8 Ford Motor 103 3/8 Freeport Sulphur 28 1/2 General Mills 33 1/4 Goodrich, B. F. 71 5/8 Granite City Steel 43 1/2 Great Northern Paper 59 Great Western Sugar 333/8 Haveg Industries 37 3/4 Hercules Powder 103 3/4 Holly Sugar 343/4 Ideal Cement 30 3/4 Insurance Co. of N;A.- -1097/8 International Minerals Chern. 485/8 International Tel & Tel 51 1/2 Jewel Tea 76 Johns Manville 60 1/2 YfALSTON & CO.INC. Original Recom. Price 24 5/8 54-50 42 7/8 55 1/8 52 3/8 36 3/4 35 3/4 25 7/8 26 3/8 363/4 245/8 47 30 1/2 40 1/4 19 1/2 28 3/8 56 3/4 43 5/8 43 21 7/8 (b) 20 3/8 51 1/8 63 7/8 45-43 35 1/2 -25 '1/8' 18 3/8 29 3/4 54 28 35 3/4 60 3/4 69 1/2 24 7/8 32 3/8 63 1/4 37 1/2 57 29 345/8 (c) 80 1/4 30 1/2 26 7/8 78 32 48 50 1/4 60 S &P Rating B B B B B B AA- B- B A- A A C B B A- BB B A B B -B– – A- B B B A A B A A A B B B B A B B B A A Comment Hold for 48 Hold for 90 Hold Hold Buy-Hold Buy-Hold Buy-Hold Buy-Hold– -.- Hold Hold Buy-Hold Buy-Hold Hold for 45 Hold Buy-Hold Buy-Hold Buy-Hold Buy-Hold Hold for 55-60. Hold Buy-Hold Hold for 75 Buy-Hold Buy-Hold Buy-Hold —Buy-Hold Buy-Hold Hold for 50-60 Hold Hold Hold for 50-55 Hold for 90 Hold for 115-125 Hold Buy-Hold Buy-Hold Hold Buy-Hold Hold for 45 Hold for 54 Hold for 125 Hold Buy-Hold Hold for 125 Buy-Hold Hold Hold for 80 Buy-Hold '( 4..'!!,..4 Close 10/27/61 Kern CO)lnty Land 68 1/4 Kerr McGee 40 1/2 Lone Star Gas 27 1/8 Louisiana Land Explor. 66 1/2 Magma Copper 56 Marquette Cement 63 McIntyre Porcupine 433/4 Mesabi Trust 13 5/8 Microwave Associates 39 1/8 Mississippi River F)lel 36 1/2 National Aviation 28 1/8 Newmont Mining 67 1/2 North Amer.Aviation 50 1/8 Northern Natural Gas 41 Northern.Pacific R.R. 41 3/4 Oklahoma Gas & Elec. 47 7/8 Panhanllie Eastern Pipe L 48 5/8 Penney, J.C. 52 5/8 Phillips Petroleum 56 1/8 Pitney-Bowes 68 1/4 Pittsburgh Plate Glass 65 1/8 Pullman, Inc. 33 1/2 R;lytheon 36 Reeves Bros. 19 1/8 Reynolds Metals 38 Royal Dutch 31 5/8 Seaboard Airline R.R. 30 1/8 Seaboard Finance 23 7/8 Southern Natural Gas 45 Sperry Rand — 0 23 3/8 Sterling Drug 92 5/8 Stevens,J. P. 32 3/8 Swift & Co. 39 1/4 Texas Gulf Sulphur 21 7/8 United Biscuit 37 United Shoe Machinery 63 U. S. Plywood 48 1/4 U. S. Vitamin 35 Varian Associates Woolworth, F. w. 42 1/8 85 1/8 -2- Original Recom. S&P Price Rating 53 A 50 A- 23 5/8 (c) A- 50 1/2 A 54 1/2 B- 53 1/4 A 27 3/4 8 (d) B 33 1/8 14 1/8 A 27 3/4 (e) 62 1/2 A- 41 1/2 30 3/8 A- 42 1/8 B 35 1/4 A- 47 7/8 A- 41 1/2 A 53 7/8 A 41 A 69 3/4 A 39 3/4 B 40 3/4 B 245/8 B- 59 B 38 1/8 (a) A 32 3/8 B 21 7/8 (a) —38 3/8 27 -1 /4 AB- – 693/4 A B 44 1/2 B 19 1/8 B 37 3/4 B 59 B 483/4 B 37 A 40 1/8 (d) 69 A- Comment Hold for 85-90 Buy-Hold Hold Hold for 85 Buy-Hold Buy-Hold Buy-Hold Hold for 18 Hold Hold Hold Buy-Hold Buy-Hold Hold Buy-Hold Hold for 54 Buy-Hold Buy-Hold Buy-Hold Hold for 75 Hold Hold Buy-Hold Buy-Hold Buy-Hold Hold Buy-Hold Buy-Hold Hold BuYHold Hold for 105 Buy-Hold Buy-Hold Buy-Hold Buy-Hold Buy-Hold Buy-Hold Hold Buy-Hold Buy-Hold (a) – Adjusted for stock dividends. (b) – If rights to buy Screen Gems at 9 were used, each 100 shares o'wns 20 shares Screen Gems now selling at 21. (c) – Adjusted for split. (d) – Adjusted for sale of rights and split. (e) – Adjusted for capital gains distribution.

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