Viewing Month: October 1963

Tabell’s Market Letter – October 04, 1963

Tabell’s Market Letter – October 04, 1963

Tabell's Market Letter - October 04, 1963
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W—-a–l-s-tloncn–&—-C–o-. Jfrlllhel's Srll' rod, Stock E.rchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OffiCES COAST TO COAST AND OVER.SEAS TABELL'S MARKET LETTER October 4, 1963 The Dow-Jones Industrial average declined to the suggested 730-720 area on Monday to reach an 728. ;36 .. This was a 37 retracement of the 68-point advance from the July low'of 684. 41to the September high of 753.04. This falls within the normal technical correction pattern of a retracement of a third to a half of the previous advance. The Industrial average rallied back to an intra-day high of 750.98 on Friday, and thus re- covered the greater part of the 25 -point decline from the high. Neither the rails nor the utilities participated in the advance to any great extent, and it is probable that some further consolidation is needed. As this letter has continuously stressed, the action of individual. stocks continues to .' m ofmuClFiYlOre'importancethan that'of 'the'averages- The Industrial-av-era-ge-ha13-adva'nc-ed– 42 from the May-June 1962 low to the recent high. During this same period, one stock in the Industrial average, Chrysler, has advanced 350, while another stock in the average, Bethlehem Steel, has advanced only 5. The overall pattern still suggests a broad reaccu- mulation pattern in most stocks with ultimately higher levels indicated. This pattern is probably not complete. In the course of the forma tion, there will be periods when the market, becomes temporarily overbought and corrective reactions will occur. The important thing will be the ability to correctly time the price action of individual issues and to buy them durmg such periods of market weakness. In the present stage of the long term pattern, the market averages appear to act only as a background to individual issues. Favorably situated issues move into new high territory when the background is favorable, and issues in an earlier phase of development enlarge their potential periods of general market weakness. It is interesting to note that many of th t c . ffie Dow-Jones Indus- trial average that have shown the best price action rtheJ\p e been the stocks that reached their previous highs a long time before the ysler, for example, reached its previous high of 50 (adjusted) reached its previous high in 1957, and Gene ck i5.ndardOilofNeWJerSey ors ' 59. These issues have been in aC,curnula.tiQnphasesJor, of There are ma;;y i'ssues of;- I' qwilitithat appearto be- forming broad – accumulation patterns. Beaun C often been mentioned in these letters. Up until now the stock has yarns and staples ts rise. The company is a leading producer of rayon nce on tire cord resulted in an erratic earnings pat- tern over recent ye it a of 3. 12 per share in reported earnings for 1959, and a low of 1. 60 in 1960. he is now selling at 13 times the last twelve months earnings of 2.00 and yields 4. n the l. 20 dividend. The company IS attempting to concentrate to a greater extent in fiber manufacture. Tire yarns 'now account for only 20 of sales with textile yarns 35, and fabrics 45. Beaunit has started work on a new plant to produce high wet modulous modified rayon staple fiber. This type of rayon is in short supply because, blended with cotton, it enhances the desirable qualities of pure fine cotton. This and other developments could result in a more stable growth pattern in the hitherto erratic earnings. The stock has done little marketwise in recent years. Since 1959, it has held in a trading range between a high of 30 in 1959 and a low of 16 in 1960. On the favorable side, the 1962 low of 18 held above the 1960 10w.Beauni has built up a sizable potential base pattern and, from a technical viewpoint, ability to brea out on the upside of this long trading range would be a constructive development. The stock should be bought during periods of market correction for long term accounts interested mainly in capital appreciation. We have noted the improving action of issues in the paper group. Crown Zellerbach 53 1/8, Great Northern Paper 48 1/4 and Union Bag-Camp (40) are part of our recom- mended list. On market weakness to the 30-32 level, we would add Container Corp.(33 3/8) to the list. It is the largest unit in the paperboard-container industry and should be a prime beneficiary of the improving pattern in the industry. Technically, it has shown extremely favorable action and has broken out of a long trading area in which it has held since 1958. Good downside support should be found around the 30 level. Dow-Jones Ind. 745.06 Dow-Jones Rails 170,93 EDMUND W. TABELL WALSTON & CO. INC. ThIS rnnrketlettcr h. not and under no Clrcumbtance;; 15 to he cClnsh ued as nn offer to ..ell or II suitCltnilon tn bll' an serlllltlc., I erell cd 1,) hel em The Infm mnbon ('flntained herem Ib nut j,!unranteed a; to nccurncy or nnd the thereuf I' nut. nnll 1I11,1(,1 IlO ('II e IS te) he tiM nt. n twn by & Co. Inc All 'If oplnmn nee 1I1IhJecl to chnngc wlthut notwe & eu. IIIL. IIlHI OffICCl'll. Ducctl …. Sto('J..h()ldcIII unci Employees ther('Of, Illucha'le, sell nnrl mny hll\e an III the me1ltl'I1('(1 heleltl Thlt, malJ..et let tel IS mtcndc,l and Ilretellted merely 1\ l!enernL mfrmnl cnmmentrllY on rin)' to Iny market nc…. b and not as n complete nnui)''lh AcllitlnllllllfulmatHm …. Ith ICle('t to IIny '('('I1lt\('S 11'ruled to hl'lem \\111 hI' ….. fuenlshed I.UJOIl rellucst \\-., 11)1

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Tabell’s Market Letter – October 11, 1963

Tabell’s Market Letter – October 11, 1963

Tabell's Market Letter - October 11, 1963
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Walston &CO. —-Inc —- Membel'R .Yell' YO/'k' Stork Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER October 11, 1963 The following is an outline of an address by the writer to the Fifth Regional Conven- tion of The New York Society of Security. Analysts, Inc., at the New York Hilton on October 7th. Because of the time element, we will have to interpret the technical action of the stock market in terms of the various averages rather than in terms of individual issues. This is far from a satisfactory procedure. The market has become far too complex to be explainErl by the use of a single index number. Both the Dow-Jones 30-Stock Industrial average and the Standard & Poor's 425-Stock Industrial index have advanced about 42 from the May-June low, but this percentage advance .Bethlehe Steel, which has advanced only 5. Earlier in the year we expressed the opinion that 1963 would probably be an 'inside year' with the Industrial averages neither making a new high nor a new low as compared to the 1961-1962 range. We narrowed this possible trading range down to 750-650 for the Dow- Jones Industrials. If we had the opportunity of revising the earlier forecast we would only add the possibility of an upside breakout of this range late in 1963 or early in 1964. For the shorter term, the averages have reached most of their upside objectives and probably need some consolidation. The base formed in May and October of 1962 between 525 and 625 in the Dow-Jones Industrials indicated a possible advance to the 700-725 level. After reaching a high of 732 in early June of this year, the Industrials declined to 685 in late July. The potential base pattern built up in the 732-685 range indicated an upside potential of 760. This has been approximately reached at the recent hig f order to indicate much higher levels at the moment, a further consolidating rl needed, This could occur in within the 750-720 area. In the meantime, t em th index has been showing unfavorable action and the failure of the Rai Uti rage to confirm the new high in the Industrials adds an element of How low can the market go at this s inty. the et pattern The averages are back to where-,they were almost.twO'ym i r' e 1962 market the vul- nerability that existed at ei' formed in the averages and in r i Only relatively minor tops have been A normal technical correction of one-third to a half of the advance f u 0 f 685 would bring the average back to the 730-720 area from where a s med. It would appear improbable that a correction of the entire advance f ea ne low of 525 is in the cards at the moment. A one-third advance would bring the Industrials hack to about 675 – which appears unlirely unles e sudden and unexpected outside development enters the pattern. The longer term pattern, in our opinion, is most constructive and a higher level of prices is indicated. While the averages are selling at about the same level as at the market top of 1961, the pattern in individual stocks is quite different. In 1961, many stocks appearel to be in the final phase of a major bull market and had sizable top patterns. Today, many stocks appear to be in the early stages of a bull market with substantial potential bases indi- cating higher levels. How could this transformation occur within the short time period of eighteen months The answer is that it did not. The market, as measured by individual stocks did not reach its high in December, 1961. Individual issues were topping out in a five-year period between 1956 and 1961. The market, as measured by individual stocks, did not reach its low in May-June 1962, and quickly form a broad base. Base patterns have been forming in individual stocks for a three-year period between 1960 and 1963. Individual stocks are in different stages of technical development at the moment, but long term constructive patterns predominate. This diverse pattern in individual stocks is not reflected in the pattern of the averages. In the conclusion, the market is headed higher over the longer term, but the rise will be selective. The skilful trader may be able to take advantage of temporarily overbought periods in the market, but the longer term investor, not concerned with the shorter term trends, should welcome declines as a buying opportunity. Our basic investment policy conti- nues to be one of being a buyer on weakness. EDMUND W. TABELL Dow-Jones Ind. 741. 76 WALSTON & CO. INC. Dow-Jones Rails 169.39 ThIS market Jette! IS not. nnd under nn tu he const1 lied us, nn uffer to ..ell 01 1\ bohcitntHln tIl lollY nny ,ile I dell ttl h(,ll'1J\ The Infl mallon ('unt.llned herein II nut I!unranlced ns to 'l('curucy 01 completeness nnd the CUI nl.bllll! tbelevf ,.. nul. nm! 1In11('1 un 1 to I.oe llm..t, \led n, 1'111 t …entn- t!Un by Walston &. Cu Inc All f oll1nHn nre ..uhJect to chull)!e wlthut Iln(l('. Woh,(cn &. CII, Jill', 1'l1111 Offlcel… , lllltl Employees thereof, nnd mllY hu.\'e an Interest til the mentlOIleil hetel Thl ml1rhet Jettel I meleh 1l'l11 I!cncrlll mformlli commentary on day to market ne…. s Ilnd not as a complete annh'''I' Adthhnnni mfOimlltlnn Ith I(o.pe('t 10 no) ll'fell(!i to helem \\ill he fUIIlIhcd \1,Pon request \\.\ WI

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Tabell’s Market Letter – October 25, 1963

Tabell’s Market Letter – October 25, 1963

Tabell's Market Letter - October 25, 1963
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Walston &- Co. —–lnc —– Membe)' XCI/' rod, Stllrk EO'change F /L . NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER October 25, 1963 Although.the.fwtw;a.s little.noed, .Thursday of last week constituted an anniversary. It was on October 24, 1962 that the Dow-Jones Industrial average posted a low of 549. 65. The subsequent year saw a largely-uninterrupted advance into newall-time high ground and, in- deed, the average celebrated the first birthday of the bull market by again reaching new all- time high territory on Friday. As many investors are aware, however, the sharp advance in the averages has not produced a uniform upward trend in individual issues. The advance of the past year has, in fact, been highly selective. Moreover, it is wort pointing out that selectivity has a tendency to increase as bull markets reach a more mature stage. This is a fact worth noting with the present upswing..!'10\y9yer old.. . .. It is easyto the diversity of market action thus far The Standard & Poor's 500-Stock index reached a new high along with the Dow last week It is possible to sub-divide the Standard & Poor's 500-Stock index into some 58 industry groups. Only 11 of these 58 groups had also posted new 1963 highs as of last Wednesday. In fact, the number of group in- dices that reached their highs many months ago is rather astounding, considering the overall advance in most averages. Six group indices topped out in January and February. By the be- ginning of June more than a third had reached their 1963 highs,and two-thirds had reached their peak by mid-SepLember. The following compilation shows the date on which each of the components of the 500-Stock index made its 1963 high. Vegetable eil Cosmetics Vending Mach. Shoes Aerospace Finance Confectionery Shipbuilding Tobacco 1/16 1/23 1/23 1/30 2/6 2/13 4/3 4/10 4/17 Railroad Equip. 6/5 Paper Containers 9/25 Shipping 6/5 Household Appliance 9/25 Beverage-Brewers 6/12 9/25 Container, Metal-Glass 6/19 ft 10/2 Railroads 6/2fl(O./l t mo . 10/16 Gold.Mining 8/2trv; Ho urnishings 10/16 Texhles ce & Business Equip. 10/1) Small Loans 8 Paper 10/16 –Auto -9 Soaps — – 1-0/16 Chemicals Copper 5/8 5/22 Oi ,f4 Air Transport Distillers 10/23 10/23 Electric. Equip. Mach. Tools 5/ Mach. Agric. 5/22 Aluminum 6/5 Auto Trucks 6/5 Bldg. Materials 6/5 Mach. Composite 6/5 Motion Picture 6/5 e e , Misc. all Stores Steel Fertilizers Food Textile Products 9/5 9/11 9/11 9/11 9/11 9/18 9/18 9/18 Coal Electronics Lead & Zinc Radio & TV Broad. Radio & TV Mfgrs. Sugar Composite Sulphur Synthetic Fibers Tires & Rubber 10/23 10/23 10/23 10/23 10/23 10/23 10/23 10/23 10/23 Since many groups reached 1963 highs early in the bull market, it follows that a good many have been in downtrends fOT some time. Some of these downtrends have been fairly steep. Sixteen groups, as of Wednesday, were selling more than 50/0 below their 1963 peaks, thus confounding the many investors who bought at those peaks and watched the averages move into new high ground as their Own stocks were going down. The following industry grou indices are now down 50/0 or more from their 1963 highs Vegetable Oil -5.00/0, Publishing -5.10/0, Shipping -5. 50/0,'Shoes -5.70/0, Metals, Misc.- -5. 90/0, Auto Trucks -7.80/0, Motion Pic- tures -8.00/0, Confectionery -8.50/0, Finance -9.30/0, Shipbuilding -9.40/0, Tobacco -10.20/0, Gold Mining -11. 50/0, Brewers -11. 60/0, Machine Tools -13.10/0, Aerospace -13.40/0, Vending Mach. -22.40/0. All this is intended to demonstrate the fact that capital gains become harder to a- chieve and the risk of capital loss becomes greater each day that the market advances. This in no way alters the constructive long-term opinion repeatedly expressed by this letter. It does, however, stress the need for vigorous stock selection and willingness on the part of the investor to make necessary changes in his portfolio as the market upswing becomes more mature. ANTHONY W. TABELL Dow-Jones Ind. 755.61 Dow-Jones Rails 171. 50 WALSTON & CO. INC. lTIaJ kct Jet tel' b not, nnd undel no Circumstances I'; to lie lied IS, nn utre! tu VI n suliCllatu'll to buy any 1efcll cd In hel em The Infol tlll1tl,ln cunltllncd herem IS nut I!lIlll antced to l.('curacy or eompictenc;,s nnd the (til nlshllll! thel cor ,… nut, nnd IIllde! 110 ('II cum.,tnm e-. I tu be a. n rt'IJI e.,('utn- tWII by \\'nlstofl & Co, All e'CpreSMUflb of IIplnlOn nre hllhJ(('t to chnnl.c wlthNlt I\otl('e Wnibtnn & Cll, InC, Ilild Dlledms. StucJ..hull\clh nnd therror, llt11chn.,e, sell nn(1 mny hu\(' nn mtclebt m the nH'llhllncd hC1Cill 'lhl-' mrllJ..et lett!,,1 IS lntClllcd 1I111111CClltcd mcr('ly n j.'CIICl1t1 IIlfOlllWI ('ommentnlY all IIny to dny nHllkct new! IIl1d not ns n complete nrUlIh AthhtlHnni infOlmntlon \\Ith Jepc('t til lin), -'C('Ulltll\ to hClcm …. 111 he furfllhed Il.POn request. \\.. ,I)

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