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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 Lecember 6, 1965 Most segments of the stock market appeared to be under moderate pressure last week. The Dow-Jones Industrial Average pushed io a new intra-day low of 93S SO on Thurs- day, continuing the slow erosion that has taken place since the November 4th high of 969 9S. Under the pressure of competition with an ever-weakening bond market, the Utilities continue their slide and at the week's intra-day low of 152.00 were at their lowest level since the June bottom. Meanwhile, the Rails spent most of the week continuing the sharp advance that had begun just before Thanksgiving Day and posted a new intra -day top of 245. 14 on Wednesday The week was, in short, one of highly mixed action. Such cross currents are likely to COl'- .t…i…nue–. — – —— – This sort of thing tends to be confusing to tile average investor. Cor years he has been bombarded with the illusion thal the market must be ei1.her a bull market or a bear market and that there is no rOOm for anything in between. A market in which a great many stocks go up and a greai many siocks go down, both phenomena occurring at the same time, tends to leave him somewhat confused. Yet this is precisely the type of market we have seen in 1965 and the type of market we are likely to see throughout 1966. The Dow-Jones Indus- trial Average will end the year at a level not far removed from where it traded most of last Spring, yet an examination of most portfolios will reveal boih sizable profits and sizable losses. j The experience of ihe Price Apprecicltion section of our recommended list, since the last issue in mid-Ociober, is iypical of the kind of ihing ihai can be expected. On Octobe 11th, the date of the issuance of ihe list, the DC'w-Jones at 942.65, not ioo far different from Friday's close of 946.10. Of thc 42 Wdown, although, of the 17 losses, 6 are fractional. 5 are up and 17 are go i approxima tely 50 than the average loss, and the list as a show, j5j)reciaiion during lhe perlOd. ,\- ' list has \I/'ny s!.Q.cl-;s.Jmve moved l.lR . – sharply and ha ve reached, or are ueJi. e ob,iec lives. Sparians Industries. for example, originally UJ65 al much lowpr levels, has reached its upside objective of term accounis. ct, c; rcmoved, aJll,ough it may be held in long (S4) .Inc! Scovill Manufac1.uring (61) are approaching their 10 Je . . es of !)O and 65 respec1.iveJy, and will be removed if these objec1.ives are r ched ther stocks 111 the 11st which have behaved well include I American Hospital Suppl ,9 5/S), Eaton Manufactunng (595/8). General Dynamics (60 1/4) Illinois Central (65 1/4f J. McDermott (49 7/8) anc! Sundsll'and (36) Any lisi, of course, has its quota of recommendations which, at least iemporarily, turn out poorly and in our case the worst acling recommendalion has been E. J. Korvette which reached a low of 26 5/S on Friday in the face of an extremely disappointing first- quarter earnings statemeni showing results down 50 from J.1st year The sharp decline in the stock has been stimulated by a number of factors induding management changes, re- ports of insider selling, and a host of other ostensible difficulties. However, our original recommendation of Korvette was based on the company's proven ability to increase sales sharply over the past decade, and the expectation thal this sales growth would continue. It was our feeling that this ircre.1se would be coupled with in ing profit margins which had plagued ihe company over receni years. While recent reports indicate that such an improvement is not immineni, it does not mean thai it is out of the question. The current losses resulting from food and furniture operations should, I be reversed. And 120 of sales behind each share provides a good deal of leverage. IMeanwhile, from a technical point of view,lhe siock has just about reached its down – side Objective. While it will undoubtedly continue under heavy pressure from tax-loss selling for the time being, we feel that the stock has merit as a long range speculation Ind. 946. 10 Rails 243. 70 ANTHONY W. TABELL WALSTON & CO. INC. Thl market letter IS Iluhh.;hed for )our ('011,,'1111'11('1' ,11.1 ,nrrmation .1n.1 ,,, nn\ 'I fT. to ell or R ..ohl'ltatton to huv til) 'lM'Uf,tlf'S dl;'U.',1 1 h. 1- ormnllOn WitS obtnHlId from source, we Iil,v to I 1.llIbll', but (' d not ),,\l,1t Int., ,I .. aC('ull\!' \\ ,ton K ell Ill .lntl Ih … hl emjJlo'eS mllY have nn Interest 11\ or pUf('h,l!' In.1 I'll tht -.'IunlL(S ,.f.II,, to hlllin.