Tabell’s Market Letter – October 25, 1963

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)