r; Wdlston &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 July 1, 1966 p Last week's market action was, to say the least, interesting. Posting declines on the first three days of the week, the Dow-Jones Industrial Aver age continued to fall until shortly past noon on Thursday. After posting an intra-day low on Thursday of 858. 90, the Averages rallied sharply to close only slightly off on the day, and the advance continued to a peak of 884.02 on Friday with mild profit-taking setting in late Friday afternoon. What is interesting, of course, is the fact that the intra-day low of 858.90 was al- most exactly identical to the May 17th intra-day bottom of 859. 13. This sort of action will, a-piethora-oftechnical-comments'abou t -a-' ',test' of-the lows. Actua1J y, action of this sort is fairly typical. The possibility of an occurrence of this nature was noted .by this letter on May 27th when we said – However, One interesting characteristic of ex- tremely oversold markets may be noted. In a great many cases the low reached at the time of the extreme oversold low is followed, from two weeks to a month later, by a further low just slightly below the previous one. In general, this subse quent decline tends to be more selective and a great many stocks do not move on to new bottoms. It is these stocks, general ly, that tend to be the leaders of the subsequent advance. Just this sort of thing has, so far taken place, and the number of stocks that at this week's bot'Dms were well above their lows -of a month ago are, of course, legion. All of this analysis of the Averages is interesting, but, in one sense, it doesn't really make any difference. A study of recent action of the Dow, for example, must tend to remind the technician of market action in other highly come most readily to mind. Both of these periods were on in — 1953 and 1960 11 market averages generally tended to trend lower. Both, however, 0 rods' hich it was possible to achieve investment success by judicious selection e pro / stocks. February 9, March 1 ril , May 17, – 1966 \ – –19 June 30, Dow-Jones Ind. Aver. 1001. 11 I'VlO . ) 61. 91 859.13 858 '90. Sperry Rand 20 V 3'14 National Cash Re 81 1/2 '233/4 601/2 89 3/4 181/8 53 791/8 25 1/8 66 84 1/4 Owens-Corning F Goodyear Tire 44 9 60 3/4 43 83 1/2 47 1/ 2 771/2 45 1/8 81 3/8 50 Admiral 3/4 871/4 125 1/2 90 1/8 893/8 Chrysler 3/8 51 1/4 51 41 383/4 Such also seems to have been the case in the most recent period. This fact can be illustrated by the table above. All of the first five stocks in the table were, at their lows of Thursday, selling higher than they had been on February 9, 1966, the day the Dow made its high at over 1000. In other words, it might have been possible for a market analyst in February to point out that the Dow would be almost 150 pOints lower five months hence. If, acting on this theory, he had sold the stocks mentioned, even at their highs, a considerable amount of profit could have been lost. A further glance at the table points out the diversity of action since the February highs. Sperry and McDermott, for example, are 380/0 and 250/0, respectively, above their lows of a month ago, despite the fact that the Dow was approximately equal at both times. Admiral was a strong performer up to the April highs and, indeed, was higher at that point than in February. The recent low, however, was below the May low and dangerously close to the March figure made when the Dow was almost 50 points higher. Chrysler, on the other hand, was lower at the April peak in the Averages than it had been on the day the March low was made, and has continued downward throughout the entire period. The point is that judicious selection of stocks would have rewarded the investor during the first half of 1966, and will probably continue to reward him during the second half as well. Dow-Jones Ind. 877.06 Dow-Jones Rails 227.25 ANTHONY W. TABELL WALSTON & CO. INC. ThiS market letter Is pubhshed for our con.. C'mence and mformatlOn and 1; n….t an offer to Bell or a solicitation to buy any l!eCurlties discu'Jsed The In- formatIOn WIIS obtained (rom ROurces We bdieve to he rehable, but we do not guRTl\ntee Its Rccurary Walston & Co Inc and or emJ'toyees may have an interest in or purchase and sell the secUrltLes referred to herem WN30'l

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 July 8, 1966 FILE Investors are hardly inclined ,to think of the steel industry — if, indeed, they think about it at all these day-s,-,,.'as,one in which a technological revolution is taking place. Yet this is, in fact, the case. Dramatic new techniques for the production of the world's basic metal, such as oxygen furnaces, continuous casting, and the like, hold the promise of dras- tically revising the cost structure and productivity of this highly important industry. The success of these techniques has been especially apparent in Europe which was forced to re- build its steel-making capacity after the war and where, as a result, modern steel plant is more widely installed than is the case in the United States. — promise'is, -slowly,-to be-sure-,being'translated– into reality. However, in the case of the Big Eight steel companies with their vast, far- flung, diversified operations, and their heavy commitment to existing plant, the process of conversion to up-to-date methods of steel making is taking place at an agonizingly slow pace The result of all this is that the Big Eight companies, while they appear to represent ex- cellent value for the long term investor at today's depressed prices, (for the most part with in 100/0 to 200/0 of 1962 lows), show no indication of any immediate upward move from a tech- nical point of view. When one begins to consider some of the smaller steel companies, however, an en- tirely different picture is presented. A small producer of specialty steels with its plant generally confined to one or two locations, can, with good management, intelligent financing and a sound capital program, modernize almost all of its capacity in a relatively short pe- riod of time. Since the small company operates in an 18e price structure is still, largely, controlled by the costs of the giants, which st reflect the high percentage of antiquated plant, the earnings place, can be quite dramatic. 1\ ex m nization has taken Of course, all modernization w,that ',-po,ib1y gOEri niques, in many cases, leads to shar 'Sfih'je 0 Murphy's Law which state tehngs just after those techniques are in- troduced. As plant is broken h e earnings improvement is all the more dramatic. A case i poin 's RW1;LD STEEL (25 3/4), which was placed on this letter's recommended i t y at a price of 18 1/2 (adjusted). At that time it wa our belief that ins ous casting operation, a new process for production of Copperweld cable an 0 inu rowth in Alumoweld aluminum-covered cable, could produc a worthwhile earnings etter earnings did, indeed, materialize and results for the twelve months ended 1965, set a new record. Under the stimulus of this earnings im- provement,the stock reached a 1965 high of 35 7/8. Beginning at the middle of last year, how ever, as continuous casting came on stream, problems began to assert themselves. Break- in expenses in many areas penalized earnings, with the result that second-half results were 86 in 1965 vs. 1. 39 in 1964, and the poor showing continued in the March 1966 quarter with 32 being shown vs. 80. The stock moved down to a recent low of 241/4. It is present ly believed that a great many of Copperweld's problems will have been alleviated by the fourth quarter of this year and that 1967 could show a worthwhile increase over recent de- pressed levels and should, probably, surpass 1964 record results by a substantial margin. For this reason the stock appears attractive for new purchase at this time. Meanwhile, another small steel company, SHARON'STEEL (34 7/8) appeal's to be at a similar stage of development. An imaginative capital program which involved the issu- ance of some 35 million of debt and a common stock offering last January is providing the funds for new and modern mills to produce cold-rolled sheet and semi-finished steel and to continue changing ingot capacity over to oxygen furnaces. This is, at the moment, penalizing earnings severely.(per,sha'ne..results of 44 vs. 76 for the first quarter), and 1966 results are expected to be sharply lower than last year's 3.23. For 1967, however, completion of the new mills will double capacity, and the resultant rise in earnings could be of significant importance. The stock,currently selling under eleven times 1965 results, appears to repre- sent good value. From a technical point of view, it has just broken out of a five-year trading range with a long term upside objective of 70, and support just under current levels. We are herewith adding it to our recommended list. It will be reviewed in more detail in a subse- quent issue of this letter. ANTHONY W. TABELL Dow-Jones Ind. 894.04 WALSTON & CO. INC. Do ThiS market etter IS- publish or )'our convemence and informatIOn and IS not an offer to tlell or R solidtAtlon to buy any IlECUrlties diseullS('d, The in. formation was obtained from sources we bdle\'c to be rehable. but we do not guafantce its accumcy. Walnton & Co. In(' and IU; officers. dir(!('tou or emJ'lo)ees may have an mterest In or purchase and sell the securities referred to herein. – – …. WNSOl

—- ——— Walston &- Co. Inc INVESTMENT BANKFRS MUTUAL FUNOS MUNICIPAL BONDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges TABELl'S MARKET lETTER OFFICES COAST TO COAST AND OVERSEAS July J5, 1966 rJ 1…- e The market last week continued the frustrating pattern which has characterized it for some two months. After reaching an intra-duy peak of 901. 16 in early trading on Monda the Dow-Jones Industrial Average sold off to a low of 875. 33 at mid-week, followed by a modest rally at week's end to flD6. Ge;. Volumc was consistently light throughout the week. Friday marked the forty-first trading day since the May 17th low, during which time I the Averages have held in u narrow range bounded by 910.35 on the upside and 858.90 on the downside, a range from low to high of G. Three weeks ago this letter said – Insofar as the Dow-Jones Average is l'oncprned, the market remains on dead center. A lapse of 15 more trading days 'leaves 'rio ihis op'inion.- – – It is possible, actually, to dividp till' udion of the market since the first of the year I' into five distinct phases. TIl' first of these was a narrow 3.4 trading range between 100L11 967.81, which lasted for 25 days in ,January and early February. The great majority of stocks probably made tll'ir U1G6 highs somewhere during this period. By this late date, however, a great many issues hud already topped out, some as early as 1965, and were in the course of moving lower. The second phase lasted for 18 days in late February and early March and consisted, of a decline from the year's peak to a figure just above 900. The third phase was a mild ' 31-day rally from a low of D05. 40 in mid-March to the April high of 961. 91. A great many issues actually made their highs for the YE'ar On this move rather than on the previous one in February, despite the fd that the Averages were some 40 points lower. The fourth market phase consisted of 18 trading 22nd to May 17th, with the Dow losing 100 points from DGO to 860. Since that tr page has remained contained in the long trading range mentioned While the above outlines the pattern for the s not at all descriptive of a great many stocks. As was pointed out in ,there are a goodly number of issues that are today above their greater number ofstocks havuemai s 'th ow 140 points lower. A much he,i arch-(ows in recent trading 'sessions. It has, in short, been a satisfactory results des 'te th management could yield reasonably 0 n' rd trend of the popular averages since last ' Winter. It must be st s 15 probably remain so for the rest of the year — whatever course t ke. Nonetheless, e ro t for the general market must, at this stage, be assessed. , At some point, obvims ough, the 41-day old trading range must be penetrated either . on the upside or the d nside and either a worthwhile rally, or the resumption of the stair- step downward pattern which has characterized the Dow thus far in 1966, will take place. If the former eventuality is to take place, what will be needed is some revival of broad- scale buying interest — a factor which has been conspicuously absent so far. Here a few statistics may be in order. During the late decline in April and May, downside volume — volume on downticks as measured by Scantlin Electronics – averaged 5, 340,000 shares a day. Since then, in the present phase, downside volume has subsided dramatically, aver- aging only 2, 530,000 shares a day during the past 41-day trading range. However, upside volume, which reached a low of 2, 600,000 shar es a day during the previous phase, has ff!11y mildly to a level of 3,191,000 shares a day during the most recent phase. Thus, tfie April-May, decl,ine was due not so much to strong bu in entering the picture ,as to a cessation of the heavy selling which had driven t e verages downward. The funds that co'lid generate renewed market interest are, indeed, available. Mutual Fund sales continue good. Certificate of Deposit maturities are high, and the short interest is up. These and other factors represent a potential source of market buying power Whether they will be translated into actual buying power remains to be seen with the possi- bility of, and extent of, a worthwhile general market rally hanging in the balance. In the meantime, the best course of investment action is the concentration of funds in that sub- stantial minority of issues which show every prospect of outperforming the market. Dow-Jones Ind. 889.36 Dow-Jones Rails 231. 24 ANTHONY W. TABELL WALSTON & CO. INC. AWTamb ThiS market letter IS published for lour ron\'('numce and mformatlon nri 1'1 not Itn offer to sell or R lIoIll'itntion to houy Rny aeeurltiE'S dlst'usllE'd The In. formation WI\; obtained from WI.' hl'!W\e to h(l rehabh.' but …. 1' .\ not InlRrhntl'( It'I u('cUrn('\ \\'1\1'Iton So. Co lnr Rnd cm\'lIO)el'9 may have an mt('rest In or pUrrhR'Il' .md Sl'lI the 'Il'l'l,Illtl.., I ('f.'rl ell to he!ln offi!'('! Ilr ,t S 0 1'0. ( e( or r WN.301

Walston &Co. ———lnc ——–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 J u1Y 22, 1966 The market last week continued to hold for the 46th trading day in a narrow range by 910. 35 on the upside and 858. 90 on the downside. After reaching an intra-day on Monday of 892. 98, the market continued to drift steadily downward on consistently llght volume, reaching an intra-day low on Friday of 864.97. The eventual move out of this trading area remains uncertain. If this trading area is violated on the downside, it is possibl to correct the Averages to the 840-825 area. The recent weakness in the market, as noted by this letter last week, has been due not to selling pressure as experienced in the May decline of this year, but rather to lack of buying power. In order to move the Averages out of this trading area on the upside, indicating higher levels, a broad-scale revival of buying power must become apparent. This remains conspicuously absent. Outlining the pattern for the Averages does not describe a number of issues which show good prospect s for outperforming the general market. One such stock is reviewed below. WALLACE & TIERNAN, INC. Current Price 38 1/2 Current Dividend 1. 10 Current Yield 2. 860/0 Long Term Debt None COmmon Stock 4,160,601 shs. Sales-1966-E 102,000,000 Sales-1965 94,170,000 The ability to develop a product or process to fill a new need in a new market and, having established this product or process, continue to maintain a dominant position, has been a determinant that has underlined the success of many well managed corporations. Wallace & Tiernan (originally recommended list on August 2, 1965 at siDfifty years has es- poused this it e ly rewarding resulis. Earn.per sh. 1966-E 2.60 For over five E arn.per sh 1965 ' d2.24 consolidation 'lVerSi 0 u r h ell planned program of ion, Wallace & Tiernan, a hem'ica1s, i.nd ustriaI equi.pment Current -36,1/-2 ..'' r e, and d'l'ugs, has-evolved . a -part company, each approximately eqUll in size and importance. \. 1 extremely diversified in nature, enabling the company to show a e growth in sales and earnings for the company as a whole. . in section is often counterbalanced by stability and growth in other sec' ThJ ca e management team has strengthened the corporate stru ture and increased to s Ie stantially through internal development and a well planned acquisition program. Eac ction of the business is a complete entity within the corporate framework. This auton ous approach has the advantage of maintaining the objectives within the division. These divisions include – the Chemical Group (390/0 of 1965 sales and 390/0 of net income) manufactures and sells organic peroxies, fatty acids, sebacic acid and plasticizers, compounds for bleaching, maturing and enriching of flour, and decay control processes. The Equipment group (310/0 of 1965 sales and 240/0 of net income) manufactures and sells chlorina- tion equipment for water purification, sewage and waste treatment, and swimming pool steril- ization, industrial flow metering equipment and other related items. continuous dough-making process for the baking industry, equipment and materials used by the fresh fruit, produce and citrus industries, and offers engineering services and supplies, cathodic protection materials and services. The Pharmaceutical Group (300/0 of 1965 sales and 370/0 of net income) manufac- tures and sells ethical pr-esctiption drugs and cCfflSumer proprietary drugs. The growth and development of this company can best be experienced by reviewing the last five years of the corporation's history. In 1961, sales volume has increased from 64 million each year to 94.7 million in 1965, an increase of over 450/0. Earnings per share have experienced an ever greater continuous increase 1.. 22 .i111961 to 2.24 in 1965, or 830/0. The're is no reason to believe that the strong earmngs gam will not continue and carryover into 1966. Earnings for 1966 are estimated at 2. 60 on estimated sales of 102 million. Wallace & Tiernan continues to attract the attention of the investment community des- pite the heavy concentration of ownership by insiders (over 500/0). The stock, which s.old for 33 times earnings in 1961, is now available for 15 times estimated 1966 results. Techmcally, a downside objective of 37 was recently realized. Remaining in support in the high 30 area, a long term upside objective of 63 is indicated. Relative price action remains good and on I minor weakness continued purchase is recommended. D')w-Jones Ind. 869.15 Dow-Jones Rails 224.79 ANTHONY W. TABELL WALSTON & CO. INC A W IS mnr e Ie ter 19 published for your and mformatlOn IS not lin offer to sell OT 1\ 'loilcltatlon to buy any securities dlSl'ugsed TnI' In- fOlmation as obuuned Cram sourC'e'l we blheve to he relHlble, but I' do not g\l'lrantee Its ,II'Iton & Co, InC' and it., officers, dlr('('tors or emloyee'l raay have an mterest In or purcha.,(. and sell the rfferred to helcm WN301 J,

Walston &- Co. Inc INVESTMENT BANKERS MUTUAL FUNDS MUNICIPAL Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER July 29, 1966 From time to time, this letter has commented on the bull-bear syndrome, a disease which occasionally afflicts some market analysts and a great many investors. Since this week's market action brought occurrence of the syndrome to epidemic proportions in the financial community, the time is perhaps appropriate to discuss the phenomenon once more. The most noticeable symptom of the disease is, of course, a compulsive desire to pin labels on the stock market. To the sufferer, a given market is either (a) a bull market or (b) a bear market and there is no room for any gradation in between. The disease most re- cently began to crop up last April when the Dow Theory delivered its recent pronouncement that we ,had.indeed been in a bear market-since -Februa ry and that investors should, accord- ingly, take warning and run for the hills. With this week's market action, when the failure of the Dow to hold above a previous low on Monday triggered a sixteen-point sell-off, followed by a new low on Friday, the compulsion to pin a bear market label on the present stock mar ket became utterly colossal. The bull-bearsyndrome is, of course, One of the most widespread barriers to clear thinking existing among investors. What is of interest to the investor is the number of stocks which can with some certainty be said to be in uptrends. At certain times almost all stocks are in upward or neutral trends and it is possible to achieve investment success by almost random stock selection. At other times, so many stocks are in apparent downtrends that it becomes impossible, even with the most rigorous standards of selection, to choose attractive equity investments. The point is, however, that between these two and white there exist an almost infinite number of shades of grey. In certain in n Wlth gh the maJority of stocks may be moving up, a fairly significant 1 act in downtrends. Like- wise, it is possible to envision exactly the opposite – a et where, while the major ity of issues are tending toward lower tial minority is resisting this Now let us take-the-rrfost ri -the Dow-Jones-Industriai – Average had declined 150/0 in This decline was exceeded by only four other downswings in the ost- r i ariil., if one looks only at the Averages, it is cer- tainly tempting to att h r abel to the experience of 1966 so far. There is, however, strong n appelation is misleading. Quickly to cite a couple of statistics, a recent 01 eading stocks showed that, at recent prices, 156, or al- most one-third, were bo e same or, in fact, higher than they had been in February when the Dow made i gh at 1001. 11, 15 above present price levels. Now, obviously, when two stocks out of three are in fact moving downward, the process of security selection becomes immeasurably mace difficult. This is not to say it becomes imp03sible. This is borne out by many recent reports of investment company results for the first six months of 1966. A great maJority seem to be showing only a minuscule decline in net asset values per share and a significant minority have indeed appreciated very nicely during the recent six months bear market. The important thing at the moment is that a study of individual stock patterns indicate a strong likelihood that conditions in the second half of 1966 are very likely to resemble those of the first half. In other words, while it is difficult to become enthused about a great many stocks a.t the large majority, remains a signi- ficant minority of issues which are both technically and fundamentally attractive and which have every prospect of performing very well over the next few months. This is, of course, not a bullish position and to call it such would be to commit the error diametrically opposed to the one discussed above. However, the contention that good stock selection can achieve moderately successful results over the next six months, just as it did over the past six months, is the one that seems to come closest, to the reality of today's stock market. — Dow-Jones Ind. 847.38 Dow-Jones Rails 220.19 ANTHONY W. TABELL WALSTON & CO. INC. AWTamb ThiS market letter is pubhshed for our convenience fLnd mformlltlon Rno ' not an offer to sell or II soil('ita.tion to buy Any !leC'!urlti(S dlS(!usfied The In- formatIOn 'RS obtmned from sources we bt-lieve to be rellable, but we rlo not Its tH'curRrv 'RIston &.. Co. Inc. Rnd It. officeI'). dlr(''tors or emJ'lo)ees mil) have an mterest in or vurchase nnd sell the secuntw; ref.rrell to herem ——… –