Tabell’s Market Letter – December 21, 1962

Walston &Co. In.c .11e III he, 8 XCII' 1'()'1. Stock E.rclla1lge NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OffiCES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER December 21, 1962 During the past week, General Motors reached its highest price in history and Standard Oil of New Jersey sold at the highest price level since 1959, Despite the strength in these and other blue chip'issues, most of the leaders of the 1961 speculative binge, the second and third grade quality growth'Yissues, were selling within 100/0 of'the May-June lows, It certainly proved sound advice in June to switch out of the discredited low-grade glamour stocks into the high-quality investment issues that were available at near or be- low the average price-to-earnings ratios of the past ten years, During the past month, the various averages have held in a narr'ow trading area. The intra-day high in the Dow-Jones Industrials was reached early in December at 658.76 and the low of the month was reached this week af 636. 88-T,he'cross currents of 'tax-loss selling and year-end investment demand usually result in an irregular market pattern during December. These factors were augmented this year by the steep rise since the October 23rd low ana the need for some consolidation, but the large amount of uninvested funds in institu- tional accounts has acted as support. Obviously, ;'ost of this buying has gone into higher quality issues. Our technical objective for the price advance from the October low of 549.65 was the 650-685 level. The lower part of this range has been reached, but we believe the Industrial average Will move above the early December high during January. A sizable number of techmcal patterns or individual stocks suggest moderately higher price levels and no distributional top pattern of importance has as yet been built up. Market strength in January should be used to lighten commitments in issues with below-average prospects. We are in the process of checking our Our recommended list of issues mentioned in this letter is s' i05 to a year-end review rna' ly for the individua who is interested in capital appreciation over a i nth longer, We also On occasion, drawn attention to issues where the mai ractio in above-average income with modest long-term capital appreciation following American Can Price 45 44 W 1 in this category are the Price Yield pensol. Natural Gas 54 4.3 American Smelting 56 Dominion Tar Chem. 16 5.0 Anderson Clayton Borg Warner Canadian Pacific Chicago Pneu. Tool 27 4 .5 5.0 Great West. Sugar Holly Sugar International Harvester Swift & Co. 34 31 49 39 5. 3 4.5 4.9 4.1 We consider t e issues suitable holdings for individuals interested mainly in income and modest appreciation, and advise their retention. However, as the main objective of our list is capital appreciation, we will no longer mention these issues in our list. Five issues show a gain from the original recommendation, four show a loss, and the remainder' are about even. Overall, the group has shown slightly less favorable action than the averages. We are also removing six issues from the recommended list. They are Colgate, Palmolive (43), Dome Mines (24), Insurance Co. of N. A. (93), McIntyre Porcupine l41), Minne polis Honeywell (85) and United Biscuit (39). Three of these issues show a profit from ori- ginally recommended levels, One a loss and two are about even. On an over.all basis, they show a slight profit. . , As replacements, we suggest the following issues in our recommended list Burlington Ind. (26), Cluett Peabody (45), Continental Insurance (59), Gulf,Oil (40), Inter- national Minerals & Chem. (4l), McKesson & Robbins (39), Reynolds Metals (23), or Varian Associates (34). The following issues are being placed in the low-priced, speculative list, Audio Devices (11), Chicago & North Western (12) El Paso Natural Gas (16), Great Western Financial (17), Mesabi Trust (11), MIcrowave Assoc. (12), Murphy Corp. (24), Reeves Bros. (H), Seaboard Fmance (17) and Sperry Rand (13). Purchase IS advIsed. The complete recommended list will be available from your Customers' RepreElen- tative after January 1st. A VERY MERRY CHRISTMAS TO ALL Dow-Jones Ind. 646.41 Dow-Jones Rails 138.96 EDMUND W. TABELL WALSTON & CO. INC. Thl'l mnrkcl IcttRr not nnd under no IS to be conll lied 11'1, nil ffer ttl …('11 til n …h( !t!lllnn tn Inl nn)' '('('ltl ItH… I ('fen eel lo hel ('Ill 1 he mflll mati,, ('ontnmcfl herem ); not ).\If\lllntced ns to nccurilO !II ('lnlplctcnt'''!1 nn,\ the fill nhhllllr thel euf h lint, alHl lin. Ie) nO! (II to he (un..lllll'(\ 0-, a 11'1'1 c.,cntn- tllln hy V.'ul'lton &. Co Inc All e,preSlon,; .If lHnum (IIC … uhl.'t tu I'h,III)!(' wllh.,ut nlue Wnl … tn & Cu, Int, IIn.1 Offl('el', nuecl. .., Stu.i-.hultlcl unn Eml'lny(C!; therroe, 'ell nnd may h,l\e nn Intel cst In the 'eIHIIIC men It. nerl hell'llI Thl- mnrl…'1 I,-\t,-r I…. IntcnIt.-tlnntl Ie–enletl ml'll'1y II …. ,I ).ll'nern1. Informnl cnmmental on c1ny to dny mnri-.I't lind nt tiS tI ('omplclc ,lIlnlYh A,I,hlln,11 IIIflnl.ltlnn Ith le'!,clt In ,lny cCIllhe– I ('f(,1 led to hClcllI \II hc u,pon request \\.\ ,l\ .;