Tabell’s Market Letter – August 02, 1965

…. Walston &Co. ———Inc——— INVESTMENT BANKERS MUTUAL FUNDS MUNICIPAL BONDS Members New-York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER August 2, 1965 Market strength in the latter half of the week was impressive. President Johnson's Vietnam statement on Wedn.esday evidently removed some market apprehension, and, from that point onward, gains were steady with a total advance of 18.21 points in the Industrial Ayerage from Tuesday's close of 863.53. A good deal of internal strength was demonstrated on the latter two days of the week. For example, on Thursday, 816 stocks advanced vs. 309 declines alld on Friday, 802 stocks posted advances vs. 315 stocks dropping. Ups ide and downside volum-e figures, as compiled by Scantlin Electronics, were also encouraging. Thes figures show ,the total volume on upticKs vs. ,total volume on dow.nticks. For Thursday. up- side was .3, 050, OOOsharesvs.downside volume,of 1,055; 000 shares. Friday's figu- res were 3,450,000 and 1,200,000. These latter figures are of some significance, for the history of the market since the June 30th lows is one of failure to produce any sustained buying interest. At the lows at -the end of June, the 35-day total downside volume was 101 m'illion shares. This figure has consistently declined from that peak and was down to 75 million shares as of Thursday. How ever, July's strength has been unaccompanied, to date, by any buying interest as evidenced by the fact that upside volume on a 35-day basis has been able to increase only from 66 million shares to 73 million shares. Obviously, if the present rally is to carry further, continued buying power must enter the picture. Meanwhile, the market continues to hold in a by the June low of 832 and the June and July highs around 885. Currently, u of this range would suggest 905 to 915, but the pattern a eIther. A month now has elapsed since the May-June 11. 8, and there has been time for some a'hd/a hich brought the Dow down sis on some of the character- Further analysis shows that tertiary variety, year when the Dow a reached in a year e skeptical of the stock a k w especially those of a secondary and times during 1964. In other words, in a 4, see many stocks making lows below the bottoms 525. There is little wonder that some investors remai All of this, ho er, goes to re-enforce a thesis reiterated by this letter repeatedly over recent years. This thesis holds that, ever since 1956, the action of the averages has been, in great part, meaningless. The theory is that different issues made major cyclical peaks at various different times during the 1956-1961 period – some in 1956, some in 1957, some in 1959 and some in 1961. Moreover, different stocks made cyclical lows at different time periods – a number in 1960, a larger number in 1962, and, when the list is finally complete, we will undoubtedly be able to find a large number of stocks which will prove to have' made their bear-market lows in 1964 and 1965. The interaction of all of these different stock cycles has produced fluctuations in the averages that, taken by themselves, mean ver little. It is the essential meaninglessness of the fluctuations in the averages which has, of late, confused a number of proponents of the Dow Theory which looks only at averages rather than the action of individual issues. If our theory ils correct, it once again points up the folly of continuing to hold issues that appear to be in downtrends relative to the market. despite the fact that these issues may have been bought at higher prices. In most cases, the hoped-for improvement is unlikely to materializ'e. Instea-d, issues with below-average prospects should be ruthlessly weeded out of individual portfoliOS and replaced by those issues with favorable fundamental and techhi- cal patterns. As an aid in selection, the August edition of our Recommended List will be in the hands of your Walston Account Executive by the end of this week. 1 Dow-Jones Ind. 881.74 Dow-Jones Rails 207.73 ANTHONY W. TABELL WALSTON & CO. INC. , fr , This mRrket letter is publlqherl (or your con,enwnce nli Ln(ormRtlOn and I' not an o(ft'r to Hell or R solicitation to buy Rny Bfturltles formation oLtnlned from we hdll'VI' to Il relmble hut llo not It!! U('curfl!'\ & Co, In!', anti Its officers, employees may have an mterest In or Ilurcha;t' .,nd sell th(. ,,\-''unlll''i rdl'l red to hell'tn, The in -…… or WN801 Walston &- Co. INVESTMENT BANKERS MUTUAL fUNDS MUNICIPAL BONDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS EDMUND W. TABELl'S RECOMMENDED QUALITY & LONG TERM GROWTH LIST August 2, 1965 Close .Qual- p/E 7130165 ity Ratio Yield Close Qual- p/E 0/0 7/30165 ity Ratio Yield Alum.Co.Amer. 70 5/8 Amer. Can 49 3/s General Elec. 100 3/s Gulf Oil 53 1/4 Paper 295/s 13 13 A A A 22 2.0 NatlCashReg. 16 4.0 Norfolk & W. 33 2.2 Radio Corp. 1333 16 – 4.0 – 7S1/4 129 1/2 34 -. A A A .A 2S 1.5 14 5. 6 23 2.0 3. 5–. -. 4. 5 PRICE APPRECIATION Close Qual- p/E 7/30165..!!L Ratio Yield Amer.Hospital S. 29 A- 29 1. 2 Amer. Potash 37314 B 14 3.7 Atchison, TOp. 32 7/s A – 11 5.0 Auto. Canteen 21 7/s B 21 3.6 Beaunit Corp. 40 3/s B 12 3.4 Cenco Instr. 30 Bt 26 1. 0 Clark Equip. 44518 A- 12 4.0 Clevite 43 3/4 B 9 4.2 CluettPeab. 713/4 Bt 16 2.S Copperweld S. 31 3/4 B 10 3. S Cr.owell Coll.363/A.-..B. …,17 Denver,R.G. 197/8 B 12 5.0 Disney,Walt 51 1/4 B 11 O. S Eaton Mfg. 49 5/s B 10 4.5 Elec.Stor. B 4S 3/4 A- 13 3.7 EIPasoN.G. 201/S B 14 5.0 First Charter 19 8 Fruehauf 29 7/s B 12 5.0 Gen'l Dyn. 41 7/s 11 2.4 Hewlett Pack. 30 3/s Bt 32 0.7 illinois Cent. 50 B 13 4.0 Int'l Min. C 54 3/4 A- 19 1. 9 Inter.Motor F. 29 1/4 B 11 3.4 Kansas City 1. 39 1/ S A- 9 5.0 Koppers Co 59 B 13 4.5 Korvette 34 B 16 Litton Ind. 93 7/s B 29 Close Qual- p/E 0/0 7/30165 ity Ratio Yield Lykes Bros. 20 1/4 B 9 4.0 McDermott 41 3/4 McGraw Ed. 31 3/4 Mesabi Tr. 13 3/s Metro Gold.M. 35 3/s Metromedia 34 Newmont M. 53 No.Amer.Car 2S B 12 A- 15 lS 14 B 13 A- 17 A 16 2.S 3. 1 5. 9 4. 3 2.0 2. 6 3. 2 Perkin-Elmer 551/4 B Raytheon Co. 23 12 2. 6 -RevIon 40-,.—-,A–1-4- -3.2- Reynolds Met. 413/4 Riegel Paper 21 1/4 Schlumberger 67 Scovill Mfg. 45 3/4 Shell Oil 627/s Signode Corp. 30 lIs SouthernRwy 553/s Spartans Ind. 2S 7/8 Stevens, J. P. 4S 3/s Storer Broad. 53 Sundstrand 24 1/8 Swingline A 43 5/s B 17 B 10 A 14 B 14 A 17 A- 13 B 11 16 B 11 B 14 B 11 B 14 1.7 3. 7 2.4 4. 3 2.S 3. 6 5.0 0.5 4. 2 3.7 4.2 3.0 United Fruit 20 1/4 B 55 Vulcan Mat. lS B Wallace & Tiel 32 A- Warner Bros.Co. 31 7/s B 10 16 10 4. 3 2.S 3.1 LOW-PRICED SPEC ULA TIVE Amer. Bosch Audio Devices Camp. Chib. Foote Mineral Gt. West Fin. Intern'l Pack. Ling-Temco Close Qual- 7/30165 !ty 20 7/s 13 1/s B- 4 1/2 19 1/s 9 7/s 11 1/4 B E'.!' 25 1/4 p/E Ratio 19 39 21 17 S r.,t 11 0/0 Yield 2.4 1.0 -4.5 2.0 Close Qual- p/E 7/30165 ity -Ra-tiC' Microwave 11 B IS Mohasco 19 3/4 B 14 National Can 25 7/s B 15 Pacific Pete 9 1/4 B- 40 Sbd.W. Air S 7/s C 9 Univ.Match 15 B 16 Varian Assoc. 17 1/s B 47 pIE Ratio Compiled at latest 12 months earnings. I. Yield 3. 3 1.6 Tins Bulletin IS Ilubhshcd for 'Ollr conVCllh'r'lce lind m(ormntlon nnd IS not nn offer tf) sell or a sohclLRtLOn to bu) an) !ecUrities discussed. The mformntJon was obtnined from sources \loC bdwvt' to III relwhlt. but WI do not Jtu.lrnnlt't' Its nc,urncy Walston & Co, Inc. and Its officers. directors or ma) hl\ve an mteresl m or IJurchcl.'II.! nnu t-dl the bt.'Cunties rderred to herem WN-916