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Walston &- Co. —-Inc INVESTMENT BANKERS MUTUAL FUNDS MUNIClPAl BONDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges TABEll'S MARKET LEnER OFFICES COAST TO COAST AND OVERSEAS Octob'er 4, 1965 We began last week's letter with the paragraph, Last week's market was characterized by a maximum amount of activity and a minimum amount of progress. That sentence is equally descriptive this week. A week ago the Dow-Jones Industrial Average closed at 929.54. This week, after rising sharply on Monday and giving up most of its gain on heavy volume on the latter four days, it closed at 929. 65. The big news, of course, was the volume. Wednesday's trading total of 10,600,000 shares was the sixth highest single day's total on record. Actually, to those who follow vol- ume statistics rather . the 10 million-share level and, indeed, in onesense, this'figure is disappointingly low. Trading volume, since the early 1950 's, has been in a rather steady uptrend channel. Indeed, if this channel continues, and there is no reason why it should not, it becomes a vir- tual certainty that before the end of the 1960's we will see a number of days on which trading volume surpasses the 16 million-share record of 1929. Yet volume taken by itself is meaningless. In order to draw meaningful conclusions it is necessary to relate volume to the total number of shares listed. Few realize the rapid- ity with which this latter figure has grown. It reached a billion shares for the first time in 1929 and required 20 years to double in 1949. In only 7 years, by 1956, it had doubled again to 4 billion shares and, six years later in 1963, it had again doubled. By the end of this year close to 10 billion shares should be listed on the New York Stock Exchange. Of course, the point is that trading volume, has grown at no- where near the same rate. The 10 million shares which ch g d ion Wednesday consti- tuted about 100th of 10/0 of all the shares listed. In y a t e has been a curious tendency for peak volume days to run at twice this fi so . olume had reached the same level in relation to shares listed that sa . 19 ,1955 or 1962, 20 million shares would have been traded, not 10 millio . if 1 reached the same level attained . e ' 46millionshares…..–Thefollowing table shows clearly the fact that V;l stocks has been declining steadily for 20 years. It shows the i a 25-year moving total of NYSE volume at selected points since 19, e m of shares listed at the same time. The last column expresses e 'w I ume as a percentage of the listed shares, and shows the clear downtrend . c. Date 25- ek Volume (Tho nd Shs.) Shares Listed Total Volume as of (Thousand Shs.) Shares Listed March,1946 217,000 1,619,000 13.4 March,1951 298,000 2,391,000 12.4 April, 1955 385,900 3,284,000 11.7 March, 1959 465, 900 5, 106, 000 9. 1 May, 1961 565,200 6,663,000 8.4 October, 1965 678,000 9, 863. 000 6. 9 The point of all this, of course, is that while the recent high trading activity is perhaps newsworthy, it is probably necessary to discount it a good deal in analyzing the position of the market today. Essentially, there remains no change in the basic philosophy expressed by this letter last week. The inability of the market'to sustain any worthwhile gains strongly suggests the desirability of utilizing strength to put together cash reserves for a future buying opportunity The basic keynote of the market in the near future will undoubtedly be selectivity. To this end some three weeks ago by wire to Walston offices we noted two cbanges in our recommended list. Electric Storage Battery was switched into Eaton Mfg. 'and Norfolk & Western into Chesapeake & Ohio. We also noted in the wire that International Minerals & Chemical having reached its upside objective of 60, was being removed from the list. We continue to feel that this stock is a good long term holding, but that some consolidation will probably be required before another upward move. Other cbanges will be made in the list in the light of market conditions over the next few weeks,.'' ….., ANTHONY W. TABELL Dow-Jones Ind. 929. 65 WALSTON & CO. INC. Dow-Jones Rails 222. 93 ThIS market letter Is published for your eonventent!e !\nd Information and Is not Rn otter to sell or a soIleltation to buy an)' aeeurltles dlacussed. The In formation was obtained from sources we to IN reliable, but we do not ItURrantee Its aCCUfaC). Walston & Co. Inc. Rnd Its offif!ers. dlrec-tors or employees may have an Interest In or purehase and sell the Bef!UratleS referred to herein. WN301 & 1.