(r; Walston &Co. – Inc 1I1ellllel'8 Xell' 'n', Sind.. Euilu1I(Je NEW YORK SAN FRANCISCO LOS ANGElES PHILADELPHIA CHICAGO OfFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER March 6, 1964 The breaking of the 800 level on the Dow-Jones Industrialssignalized a further extension of the uptrend which has been in effect since the December lows. Advances on Monday and Tuesday of this week continued the previous Friday's strength, and small declines on Wednesday and Thursday were largely cancelled out by renewed vigor at the end of the week. As regular readers of this letter are aware, a great deal of significance attaches to the rally from the December lows. This rally, so far, has had a number of unique characteristics. It has, first of all, been rema rkably steady. The Dow-Jones Industrials have now posted higher weekly closings for twelve successive,weeks. As fa.r as we are able to ascertain, this is the first time this has occurred since the average was first computed in 1897. In no prior period has the average advanced for more than eleven consecutive weeks without at least one weekly setback. Yet, despite the steadiness of the rise, it has been relatively moderate. The advance from the December 23rd low of 752.82, when the peak of tax-loss selling was reached, has so far been less than 8. This is a magnitude considerably less than that of many previous year-end rallies. The phenomenon of a steady and moderate rise produces a characteristic form- ation on a chart known as an uptrend channel. This channel is bordered by an uptrend line connecting the December 23rd low of 752.82, the January 21st low of 767.80, and the February 5th low of 777.99. An almost parallel line can the highs of December 19th, January 9th, January 27th and January 28 outer limits of this channel are 797 on the downside and about 814 id. Long channels of this nature are usually in 0 f two ways. The less frequent method is by a sharp rise out of side – normally accompanied by heavy trading volume. Such a rise rp etraced at a later date. More frequently, the 1 ace. on.the downside, not confirmed by any increase in of the rise indicates the probability that a break in either dir ction This would signalize an end of the present market phase /)\, Just wha ase might take is problematical. A large number of stocks, perhaps the jo it re approaching upside obJectives and/or areas of relatively heavy overhead supply. se stocks, certainly, are in no position to sustain any sort of a general rally from cu ent levels. On the other ha.nd, a gOOdly number of issues have still not reached objectives, or have potential bases which indicate considerably higher levels over the long term. The best that can be looked for is continued strength in these favorably situated issues, while the remainder back and fill around current levels completing base forma tions. The most pessimistic view, on the other hand, would call for the less attractive stocks to form tops and decline, while the favorably placed minority underwent a small correction. This sort of action could produce protracted weakness in the averages. A comparison of the present upswing with previous yearCend rallies is not as yet conclusive. We have noted in previous letters that, since 1937, the December low has never been broken after mid-March. Thus, the ability of the market to continue the rally into the third month of the year is a constructive sign. On the other hand, the magnitude of the year- end rally is also an important clue as to the year's market trend. An advance of 10 or more from the December lows before an identifiable correction takes place has normally been followed by an upward or neutral market. Yet, despite the persistence of the advance, as noted above, the percentage upswing is still less than 8. A 10 advance would carry the Dow to 825. In short, the present time appears to be one of those interesting periods where the market is approaching a critical juncture. Price action over the next few weeks should provide important clues as to action over the intermediate term ANTHONY W. TAB ELL Dow-Jones Ind. 806.03 Dow-Jones Rails 191. 98 WALSTON & CO. INC. TIll mnrket lettcl b not nnd unllel no Clrcumstnncc; IS t .. he nn fTcl \ …ell I II In un Ill''' 'CfCII cd 1 hel CIIl '. he 'nCm rnntlOl\ (JIluI1l1cd herein IS not J.1U11flntc(.!lII'I to IICCUllll til comJllet('nc.. ,Ind the !\nn,.,hllltr Itlt'ICIlr \-. 11' ,lnll 1IIl,I!') nIl (1IulI11lnllc,' to Le (n-.\I11ed n-., n rCPle,,('nl!l. 11(1/1 hy WlllstDrI & Co, hH', AJJ c'Cprc'.'wrlt f 11)'mIOn !He fu I'lJ,lIll!e nJllwllt J)Illul' W.1blJl & ell, JIl( .lm! OtTllel, Dlll'dlll', ,111/ thcrrof, Pll\lJHl-.e, …ell nn, O1ny h,\\e nn III the … mentlne11 heleUI 'Ihh 01,111,('1 Jettel ,-. mtellllcli nIH! ,ecIlI …' nH'I('ly ,I !-(enel,ll. lnflmnl ct)mmentRI), on (IlY to 1111)' market newl; nl\l\ nut n … a complete t\.\.hh.,llul,llfulm,ltwll With ll…. pcd to ,IllY 'llIltl(''' lefcllec\ to hl,,, hI' fill m-.heu Ii,POII request \\ lilt I

Walston &Co. Inc rn',Mfmhfl. Sf// Sinek E.1chnl1gc NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER March 13, 1964 Following is a summary of an address entitled The Stock Market in an Election Year, presented by the writer to the annual business conference of New York University Graduate School of Business Administration on March 14, 1964. 1964 is the fifth post-war presidential election year, and it is, therefore, interesting to examine the action of the stock market around the time of the four previous presidential elections. Politically, thetfour elections were evenly divided. The presidency went to a Democrat in 1948 and 1960, and the Republicans were victors in 1952 and 1956. It is interesting to note, however, that, except for a difference in timing, the price pattern in each of the four years was quite similar, regardless of'which party won the election. A high of intermediate term significance was reached at some time during each of the four presidential years. As noted above, the timing was different. In 1960 the high was reached on the first day of the year while in 1952 it was reached close to the year end. In 1948 and 1956 the highs took place in the spring. The subsequent declines in each case were of similar magnitude, ranging between 14 and 20 per cent in terms of the Dow, and the timing was similar in at least three of the four years. In these years the subsequent low was reached between nine and thirteen months after the high and, in all four cases, the next ma rket advance carried the average to new all-time high territory. Subsequent Per Cent No. Months Months until High Date Low Decline Later New High 1948 1952 1956 1960 195 May 295 Dec. 524 April 688 Jan. 160 254 416 564 150/0 '\'019 9 10 6 10 5 The above table summarizes ear action. The 1948 high was in May at 195,' and the high was reached ten months cember at 295. It then decline after that, the entire e first day of the y a correction to 564 w' as r QW a'low c of-1'60 in new average reached its high in De- 1 r chw)(a low of 254 nine months later. Six months jj n sed. In 1960, a high of 688 was reached on the n ter the Industrial average had undergone an 180/0 ced within five months. The only sli iation in timing was shown in 1956. Although the ultimate low was not reached until ober 1957, eighteen months after the April 1956 high, this high was equalled at 523 in June, 1957. Subsequent events proved very similar to those of elec- tion years, as the market completed a 200/0 correction in five months and within ten months had reached new high ground. It is quite possible that this price pattern will be repeated in 1964. We believe that the market is now iii the process of forming a pattern which will result in a much higher price level over the next several years. Although individual stocks could continue their recent advance, it seems probable that more time is needed to broadenJhe re- accumulation patterns in the great bulk of listed stocks. Moreover, the present advance from the 1962 lows is now over 20 months old and probably in need of some consolidation in the near future. To recapitulate, the typical election year pattern calls for an intermediate term high to be reached some time during the election year. If the general market is in need of a correction in order to broaden the base, this will probably be the case in 1964 also. The declines following presiqential tyearnighs,have in former years been erased very quickly. This could also be the case in 1964 since a decline of any magnitude would probably com- plete the base for a major bull market to take place in the late 1960's. Dow-Jone sInd. 816.22 Dow-Jones Rails 192.60 EDMUND W. TABELL WALSTON & CO. INC. mnl ket Jettel l'i lIot, lind umle\' no I to he n. nn lrel tn III n IILltHtUIil t.. IIny IIlllle… I'cfell cd til hi!1 ('Ill The lnfm mlltlln , ..ntuine,l herein IS nt j!lIllrllnte('d Ilb to IIcClllncy uL ('Unll)lctenC' Ilnd the CUI nl'ihlll\! thel ('ur I nut, nn.\ un,lt! IU, \ II l'II1U'ilnn. e … I ttl he um..,lIuCO,I 1\ … , ICIII (.entn- tum hy \\',I!'1ton &. Co. In' All IOf piliI'm Ille to th,lIII!C 'IIllwllt ll11tll'C Wnllun &. Cu, Inc, nlltl Dueetnls. Slod.. hnltlc,,, find 1'rnp!llvee.. ther'Of, IllU('h ..c, ,cUnnll mny hnvc ,Tn mtCIC!lt m thc O1Cl1tllll1C,1 hClcu, 'Jill Illllli..cl l'ltcl h mtCIl,etllllld pICelllC'i1 mCLcly n !.enel!ll, Informul commentary on tiny to tiny mnrkct n('W', nlLd not 11'1 n ('0111111clc an.IlYh AtI,htllln.tI Infu millIOn 'I Lth I (.I'C' t t !c('1Ir11Ic lefel Led to helem \\111 be f1ll n1heu uPOn .\ .lUI

Walston &- Co. 1'0',- – – – – l n c – – – – – Member. Xell' Stock E'cilanle NEW YORK SAN FRANCISCO LOS ANGElES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER Fort Myers Beach, Florida March 20, 1964 Despite the fact that the various blue chip averages have reached newall-time high territory, a perusal of the graphs of over 1, 800 individual issues and groups continues to show an extremely diverse long term pattern. While some groups have followed the averages into new high territory, the majority are still holding in a broad price area bounded by the 1957-1961 highs and the 1960-1962 lows. It is our opinion that the eventual breakout of these long sidewise patterns will be on the upside. The immediate question is whether or not this will occur in the near future, or at al'laterdate. Since the 1962 lows, the important buyers have been institutional investors rather than the general public. For the advance to broaden out on a large scale that will encompass the entire market, much greater public participation ,than beJleeded. Whether the.puJlic.has..y.et.recov.er.ed.froxp.the…196.2 scare is problematical. This may require further -time and rriight be-precectectby a technicaf-' -.- correction that will enlarge the base patterns in many issues. This could result in a much higher price level in the late 1960 IS. With most groups at entirely different stages of their long term patterns, it might be interesting to review a number of the leading groups. AEROSPACE – Most issues in this group reached their highs in 1957 and are still sell- ing below those levels. No indication of an important move in either direction. AIRLINES – Reached their highs in 1957 and their lows in 1960. Most issues held above the 1960 lows in 1962. Have been one of the strongest groups, but have, in most cases, reach ed their upside objectives and need consolidation. ALUMINUMS – This group also reached its high in 1957 and is well below those levels at the moment. Appears to be building a strong base pattern that could result in much higher levels over the longer term. Buy on minor price declines. AUTOS – Peaked out in 1959, but held above the advance lnto new high territory, but probably needs consol ti Has had sharp pric BUILDING MATERIAL – Reached their highs – re below those levels. Appear to be building base patterns, but may take fur time. uld accumulate group on weakness. CHEMICALS – Reached their highs in lssues are still below those l-eve. ls.COLPoPnEgRtSe-rom.—oSutitllloobkel'ioswthe-nl5 . T – .. Q,Q . strong mtermeollite positIon.' DRUGS – Reached thei group. No over-all.patte n. ELECTRICAL E B -e in 1961. Diverse patterns within the .. ed highs in 1959 and leaders are still below those levels. n a roa rn and should be bought on price declines. ELECTRONI m 1961 and most issues are selling near 1962 lows. No immediate achon mdi te, base patterns are forming and selected issues could show wide appreciation at a la nate. FOOD – Reache ghs in 1961 and probably will continue in longer accumulation area. MACHINERY – Peaked out in 1959 and have formed strong base patterns with higher levels indicated. MACHINE TOOLS – Reached highs in 1957 and have formed very strong potential bases In a buying range. OFFICE EQUIPMENT – Reached highs with averages in 1961. Still below those levels. Appear to be in reaccumUIation area with interesting long term potentials. OILS – One of the strongest groups for the long term despite sharp rise. Buy on minor declines. PAPER – This group is still in a broad reaccumulation area with substantial higher upside potentials. RAILROADS – We believe this group is in a major trend reversal. It .has moved. above 1929 hlghs and still indicates.hlgher levels. be bought on all pnce- declme RUBBER – Still below 1959 hlghs and probably m a broad reaccumulatlOn area. SAVINGS & LOAN – Have had sharp decline from 1961 highs, but have formed substan- tial potential bases. An interesting speculation. STEELS – Could move higher over near term, but long term prospects vague. TOBACCO – A much better buy than sale, but patience may be required. UTILITIES – Have shown poor action recently, but would be a buy on declines. Dow-Jones Ind. 814.93 Dow-Jones Rails 193.47 EDMUND W. TABELL WALSTON & CO. INC. '1'1115 market letter is not. and undel no clrcums\..nnces l!o to be constilled ns. nn offci to .,(.11 ul n suliCLtntwll to 111) nn' (!'CUt I dell ed 1 hu ('In 1. he !nfm mntwn ('Illlwlrled herem IS not Auntnnl.'(!f\ns to ul;curncy ur ('unJllletclICob und the tum lIy Wniston & Co tnc All tlf nplTll1lTI fIlC .UhJClt to ch.IlII. thel 'uf nI, lind nll'\cI WIlhut l)ull.e Wahtn & cn.o.,LlJILilllIIll;,Itl.lldnl'C til ue um'-llued n-., II DIICLlI' StolhhuJdell 11))'\ hmllioyees thereof, pillchasc, sell and mny have an mtelesl)l) the IICClilltle- mentullwd hCI,in fhl mfllh.et Jettel I' Intended .md I'le..cnlcll mClely n-; n 1.('lIcI.II. lIlformal commentary on dny to day market ncws and not as n completc IJnniyh Alllllin.llmfUlmntwll ,qth IC''C('( to .Iny ,.,c('lIIlbc;, Tefl'lle,\ to hClem Will he fUlnl,hcu (won lcqucsl \\.\ luI

Walston &Co. –;'-Inc —– M(lIIlel'. Xell' 'ol'k Sinck EclwlIge NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER March 26, 1964 MESABI TRUST Current Price Current Dividend Current Yield 14 7/8 . 70 (E) 4. 70/0 There are many reasons for buying securities. Some investors are interested in growth, others in generous income. Many security buyers Long Term Debt Beneficial Interest None are concerned about protecting their capital from inflation, others worry about high income tax Certificates 13,120,010 units rates. A rather unique combination of growth prospects, relatively generous income, inflation Earn. per Ctf. 1964-5(E) -'- – -Ea-rn–per-etf- .70 protection, and partial tax exemJtio.!!,..JlPRea.rs to .. 0 -58- – – -l)i;-available in-the Certificates of Beneficial In—– – – Mkt. Range – 1963-61 153/8 – 93/8 terest in the Mesabi Trust. Mesabi Trust is a fairly simple operation to understand. The Trust owns the mineral rights to a huge body of taconite ore in Minnesota containing some 50 years' supply at present production rates. This ore body has been leased to Reserve Mining Company – – jointly owned by Republic Steel and Armco Steel. Under the terms of the lease, Mesabi Trust receives a basic royalty of about 1. 00 per ton of pellet- ized concentrated iron ore produced from this property, subject to various adjustments. Un- der the trust form of organization, expenses are nominal and virtually all the royalties re- ceived are paid out to Trust certificate holders. With this background in mind, it is fairly easy to demonstrate how Mesabi combines the four attributes mentioned above. Let us discuss each 0 GROWTH PROSPECTS – In 1956, the year of its or a i erve Mining shipped some 3 1/2 million tons of concentrate. Shipments inc sed to the then exist- ing plant capacity of 6 million tons, and an unde en to increase rated capa- city to 10.5 million tons. Some 7.7 million n the year ended January 31, 1964, and well over 9 million tons are e s' ed in the current fiscal year. Ex- perience—oLboth, been favorable and – iT ,e.RUlrlic Steel and Armco will find it to their in- terest to push expansion. Thus, which have increased sharply since 1961, could continue to s around 70 per Ce .0)-Y a growth. For fiscal 1964-65 they should amount to INCOME – B n t nticipated distribution of 70';, the current yield on Mesabi Trust Certificates is a 0 and payout will, of course, increase along with royalties. The tax shelter featur this income will be discussed below. INFLATION PROTECTION – Mesabi Trust's contract with Reserve has a unique fea- ture which provides for the adJustment of the 1. 00 base royalty annually, based on the B. L. S. Index of Wholesale Prices. Thus, any important increase in commodity prices will result in increased royalties to Mesabi Trust, and increased income to holders of the units. TAX PROTECTION – The tax protection afforded the holder of Mesabi Trust is two- fold. First of ali, due to depletion laws, a substantial portion of annual income distributions are used to reduce original cost rather than reported as income. This portion of the distribu- tion is exempt from tax as long as the units are held. It is estimated that 27'; of the antici- pated 1964-65 70'; distribution will be so treated. Secondly — and this is a provision of the new tax bill remaining porti()l1js taxable at capita rather.!han ta rates. Thus, the tax payable-on this portion is half the holders' normal tax rate and a maxi- mum of 25, depending on his tax bracket. Thus, the effective tax rate on Mesabi distribu- tions should be a maximum of around 15. To demonstrate the importance of this feature, assuming a cost of 15 per unit and a distribution of 70';, the effective post-tax yield is 4. 3 to an investor in the 25 bracket and 3.9 to an investor in the 50 bracket, or any higher bracket. This is equivalent to a pre-tax yield of 5. 7 in the 25 bracket, 7.8 in the 50 bracket, and 15.6 in the 75 bracket. Mesabi Trust,. which..has been on our recommended list for some time, has held for over two years in the'10-1S area; EV'etftual penetration of this area on the upside would indi- cate higher levels and the stock is again recommended for clients seeking income and capital gains, plus tax and inflation protection. Dow-Jones Ind. 815.91 Dow-Jones Rails 192.16 ANTHONY W. TABELL WALSTON & CO. INC. 1 hl- mnrlH't letlt'l not ,nul uni('l IHI 10 he con..,tl Ul'\ '\', all fTCI to II or n .,,,lutlll,OIl to h\ll' III) ,,('('Ill I er'11 ed to llCll'lll The Illf1Il1,ll\n (nnlaHH'd hf'tcrll I, nut Io!ll.ll.llllel'li .1; to ul ,11111 thl' thI('r lIt ,lUll 1111,11'1 un UIClllllbt.l!lt(' h 10 1.1' ,I ,I tlf)n h\ & Co. 1m All ()f O)ITlWn nil' l1lljl'('1 I \\lthlIt utlll' & C. 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