Tabell’s Market Letter – March 15, 1963

Tabell’s Market Letter – March 15, 1963

Tabell's Market Letter - March 15, 1963
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Walston &Co. —–Inc —– Melll/,el'. Sell' York Siock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET1ETTER—-.—- March 15, 1963 Most investors are fairly familiar with the fluctuations of the market as measured by the Dow-Jones Industrial Average. It sounds ridiculous, therefore, to say that the actual all- time high for the Dow was 877.63, and that the subsequent low was 469.38. Yet, in a sense, both statements are true. It also seems ridiculous to say that the Average was over 1000 in 1961, that it was under 400 in 1962, or that it went down steadily from 1956 to 1961. Yet, these statements are also true of substantial segments of the average. ' Let us take the statement made in the first paragraph. Individual stocks in theAver- age reached highs as early as 1955 and turned down again. If the absolute high for the 1955- 1961-period'in'each stock-is taken; the high ii-dhe Average many' stocks made lows in 1960. If the low on each individual stock for the 1960-62 period is taken the Dow corrected to 469. 38 rather than 525. These two figures give some idea of the real magnitude of the correction that took place in the 1956-62 period. This points up the fact that the Dow is, after all, only a conglomerate of individual stocks, all of which behave differently. For example, it is possible to divide the Average into three groups of ten stocks each. In the table below, we have taken a group of ten stocks that made their peaks in 1955-57 and taken an average of these stocks, adjusting the divisor to produce 524.37, the actual 1956 high in the Dow, at the 1955-57 peak for each individual stock. The table shows that, as the Dow moved ahead, these ten stocks were actually under- going a fairly sharp correction. . 1955-57-High 1959-60- Ten Early-Peak Stocks 524. 37 4B5. 6 Actual DJA 524.37 (iftS8.2 In the following table we have utilized the n stocks which reached their highs in 1959 and 1960. It will be seen that re d a high surprisingly close to the ultimate Dow-Jones high some two erage itself reached that figure. Ten Middle-Peak'Stocks Actual DJA The pat 0 h J1J 688 21 741. 30 i' e ernge was caused largely by ten stocks which reached their peaks a . A , these ten stocks out-performed the Dow in the later phases of the r a ctually reached a level over 1000. -57 – Hi h 1959-60 – High 1961 – High Ten Late-Peak Stocks 524.37 683.20 1019.96 Actual DJA 524.37 688.21 741.30 Much the same sort of action is being shown tOday. For example, let us take ten stocks in'the Average, nine of which made their lows in 1960 rather than 1962 and compare them at recent turning points. As can be seen, these declined somewhat less than the Dow in 1962 and are currently selling at levels above their high, 1961 .. High 1962 – Lows Current Ten 1960-Low Stocks 741.30 564.46 780.00 ctual DJA 741.30 524.55 673. 73 On the other hand, the ten weakest stocks in the Average lost almost half their value 'n the 1961-62 break and, to date, have recovered less than a third of their over-all loss. 1961 – High 1962 – Low Current en Weak Stocks ctual,DJA 741.30 741. 30 393.20 524.55 490.89 673.73 The purpose of this exercise is only to show once again that any statistic, no matter how well constructed, can be misleading. The market, as this letter has repeatedly pointed out, is now in the process of forming a broad long-term base for a major advance which will egin at some future date unknown. Of i800 individual stocks listed on both Exchanges, each one is in a different cyclical stage. It is a time, in short, when close fundamental and tech- nical scrutiny of individual issues will be the most important key to investment success. The averages, as shown above, can be highly confusing. Dow-Jones Ind. 676. 33 ANTHONY W. TABELL – -III Dow-Jones Rails 151. 71 WALSTON & CO. INC. ThiS market letter IS not, nnd under no Circumstances IS to be construed 8B, an to sel1;)1 n solicitatIOn to buy nny !'.CCUI .he., refe) re,llo hel em. The m(C) matmn ('ontained herem is not I!uarantccd nil to accuracy or completeness nnd the furnlshllll-! thel eof IS not, nnd unde! (10 cliclImbtn(lCeS to be cnnbtl ued n tlon by \\'olston & Co. Inc All expreSSIUn'! (If optnlOn ore suhJeet to chnnJ.!e wrthllut nutlce, Wnl..ton & (AI, InC'. arul Offlcel .., Du'ccturs. Stockholderll and Fmpioyees thereof purchn'!e lIell lind may have an Interest In the seCUrltleti mentlnne,\ heleln fhls market letter 18 Intended lind Ilrcent((1 merely nil (l on IIn)-' to dn)- market news olld not as a complete Iln(l\Yh Achhtmnnl rnfUlmnhon Ith 1t'llel't tu Imy '1CClllltics rcfCllel1 to hcrcin Will be furnrshcd upon request \\, 101

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