-, . 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 May 13, 1966 The market slide continued this week. Aft er a sharp dip on Monday, the Dow-Jones Industrials rallied on Tuesday and Wednesday, but selling set in on Wednesday at noon and the decline an intra-day low of 868.65. It is difficult to judge how-low'the Averages may go. Our letter of last week pointed out that various downside objectives between 850 and 825 can be read. If this area is reache the market would have come full cycle, returning to the levels reached at the lows of last June. In other words, it will be possible to describe the market action of the past twelve months as a trading range with highs of 941 and 1001 in May 1965 and February 1966, and lows of-832-and -whatever-low is -dedirieti'lJ'un-efg-6DaniMay , This is entirely consistent with our view expressed in this letter over the past year. At the 1965 lows this letter said – The uptrend channel in which the market has held since the Cuban crisis low has ended and will, in our opinion, be succeeded by a broad trading area which will be featured by'wide swings both up and down…….. The market could remain in this movement for a year or longer with the Averages and individual issues showing wide price swings. The lower limits of the range should ,be viewed as a buying opportunity. The upper limits should be viewed as a selling opportunity in issues with below-average longer term attraction. We see no reason to change this opinion today. Nonetheless, it would be ridiculous to say that the recent erosion in stock prices is without meaning. In the process of their decline from' the Februar-y highs, a great many issues have broken out on the downside of substantial 0 In a great number of these cases the downside implications of these trJffing e c siderably below current levels. Moreover, a great many of the v sted such downside breakouts are those issues on which market leadersl1iI,v.Pas c red during the June- Feb- ruary rise, issues in such industries as Ail l' s, Electronics, etc. It ap- more Qrobable toqaythan be in the process of being deglamour' pasLthat ' . .. – I To some, no doubt, . belated with Fairchild Camera (136'1/2) II, down from 216 n from 233 1/2, or Boeing (137 1/2) down from 182. However, e above their lows of w, most of these issues were selling at prices 100 mm. The investor who bought them at that time can happily I accept his profit. The Jo -come-lately should have been aware of the risk in the first place. What implicati;ns does all this have for the market as a Far less serious ones, we suspect, than many analysts are implying. For while the advance in the perform- I. I ance issues has been merrily going on since last June, high quality stocks have been en- ga!,red, as we all know, in their own private bear market. It is worthwhile to examine at this point just how far this bear market has carried. At this week's low, the Dow-Jones Industrial Average was selling at the same price earnings ratio it sold at at the 1962-low. Examination of the individual components of the Average, moreover, shows that twenty- three of the thirty stocks therein were selling at lower levels in relation to earnings than they had in June, 1962. This is hardly the fabric of which major market declines are made. In other words, what seems to be taking place is a distinct shift in market leadership. On the one hand, the best that can be foreseen for a great many leaders of the June-Februar rise is a technical rally back to heavy overhead supply. On the downside there appears to be very little protection against further substantial losses in the event of a continuous down- swing. On the other hand, in a whole host of issues, bases still exist to indicate substantially higher levels and any further moderate dips would bring these issues back to strong support. Such stocks are, generally, cheaper on an earnings basis than they have been in some years. The task of the investor at the moment is to adjust his portfolio to reflect these realities. Dow-Jones Ind. – 876.11 ANTHONY W. TABELL WALSTON & CO. INC. Dow-Jones Ra ils – 228.50 Thill market lelter III published for 'Our conveRience und mformallon and IS not an offer to eell or a solicitation to buy Rny Ile(!Urities discussed. The In ormation was obttuTlcd (rom sources we believe to lo;! reliable. but we do not guarantee its BCcurBP Walston & Co. Inc. and Its officers. dlredora or en1l'loyees may have an interest in or purchase and serl the secUl'Itles referred to herein. ' WN301 i – n,

Walston Co.lnc.(r INVESTMENT BANKERS MUTUAL FUNDS MUNICIPAL BOHDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges 90 OFFICES CoASTToCoAST AND OVERSEAS I , /YlARkCT Reprinted from Thursday Issue, April 21, 1966 The COMMERCIAL and FINANCIAL CHRONICLE 25 PARK PLACE. NEW YORK, N. Y. 10007 .Basis for New Market 'II Advance Is Now UnderWay By ANTHONY W. TABELL Senior Vice Preslnent, Walston & Co, Inc. New York City l\lr. Tabell re-examines his father s famous prediction of ..ix yeIl'j a.go and ..ces little need to change it today. Similal'ly relying on the- Elliot \Vavo theory, analyst Tabell disagrees with those who say We have had one hull market Rin(c 1949 which still remains Wlcorrectoo. If so, he a(lds. uwe houid run for the hills. Actually, he claims, once the 19621966 Dow Inde' rnilrance is cor rect('d 1n PIE term.;; the upswing almO'it entirely disappears. Thus, in predicting a not too bullish market over the year ahead, i\'lr. TabelJ advi'!!cs taking advantage of any weakne..se'J. They prm.lde, he says, an excellent buy ing OPllortunity and he ha..es thi., view on the premise that we are now cOlllllleting a base fonnation for n new all\'unce 10 begin III the latter part of thi'!! dcc..'l(le. Some six years ago, my father, the late Edmund W. Tabcl1, delivered a speech m Phoemx, ArIzona (reprinted .n the Commer. cial &; Financial Chronlele of November 19, 1959) en titled What Time is It on The stock Market Clock The purpose of the speech was to make sam e o b s e r v a-A. W. Tabell tions' on long range cycles in the stock markth and to offer some oOserva- lions as to what the 1960's might have in store It was an important queshon at that pomt. The bme was two years prior to )he 1962 break in stock prices, the sharjr est del'1ine in twenty-five years Already a great many stocks had begun declinIng from highs they were not again to achieve for as mu('h as five years and which, Indeed, some stocks have not agam achIeved to this day. The question of what time is It or the stock market clock is equally Important today. We have recEntIy com pIe ted a rorty-two-month fIse in the leading market indices, the longest su('h rise .in post-war history. The,….length of this rise, …. Upswing Started in 1949 – Accurate Prediction I, for one, do not believe it is ended September, 1961, just be- true. Anyone close to the stock fore the market reached its market in 1961 is aware that peak, the Dow-Jones Industrial this period had all of the char- Average earned 29.03. Sin c c acterIstics of a major stock market top to a degree not remotely approached by today's market. I do not think it Is posSible, as so many are doing, conveniently to ignore 1961-62 as a mere techmcal interruption of a long advance. I think, in other words, that the, analysis made six years ago IS essenhally correct and that, in 1961, the bul1.market ended and the stock markct moved mto a new phase. If thIS is the case, the sharp rise in the Dow to new' high territory over the past three and one-half years, coupled with a much sharper rise in individual Issues, needs to be fittcd mto the pattern then outlined I believe that this can be done. First of all, we have been talking to date purely 10 term& of the averages. For the past decade, as most analysts are aware, this has been misleading For example, many stocks in the 1949-1961 rIse made their hIghs as early as 1956, and a great many more made the i r highs in 1959. A great many of thosp slocks which made theIr highs long before the market had already completed bas e formations for a substantIal new advance by June of 1962. As these stocks moved into major bull markets of theIr own, the rise in the Dow-Jones Industrial Average was extended to a point far beyond what would have been expected if all stocks had topped out as the then we have seen more than our years of continuous earnlOgS expansIon to the point where the Dow probably earned Just under 54.00 for the year 1965 and, probably, will earn 60 00 in 1966. At its recent low of 905, therefore, the Dow was selling for 16,9 times earnings, a fIgure not too much dIfferent than the P-E at the 1962 low. Put in terms of P-E ratios, rather than prices, the entire 1962-66 upswing almost entirely disappears. The Index corrected itself from a PE of 24.2 In lhe thll'd quarter of 1961 to one of 16.2 in the second quarter of 1962. Since that time the P-E has never moved m u c h above 19. ThIS sort of pattern IS far more conSIstent with the analysis offered in 1959 than is the conventional pattern of prices. And, thIS is, in a sense, as it should be. When we talk 10 terms of long stock market cycles we arc usually talking in terms of swings in investor confidence, It is at least an arguable premise that investor con- fidence in the overall market has improved very httle in the past four years. Indeed, it is possible that in- vestor confidence as expressed by the PE may ul- timately wind up WIth a classi- cal threewave y pe downSWIng. If this is the case, we might see a decline in the Dow-Jones P-E to around 14, the level which characterized it during 1956-57. ThIS would hardly be a major disaster. averages dId in 1961. Much Again, assuming 60 00 earnings more important, however, IS the fact that the market of the past five years has moved agamst a rdther unusual economIC back- for 1966, this would produce a Dow-Jones Average level of 840, not hoo different from the June ground For the twelve months 1965 low 4 Outlook OVer the Next Year If this is the case, the out- look for the stock market over the next year is not a terribly bullish one, and the immediate signs of market deteriOratIOn we are seemg at this late stage warn us against unreserved optlmism at this point The last high in the Dow-Jones Indus- trlals was, for example, not confirmed by our breadth 1 n d e x, indIcating some deterIoration of leadership It is quite pOSSIble that longer term volume indlces are just now beginning to top out, a phenomenon which has led all maJor stock market peaks in the post-war period. In other words. it is qUite IXlssible that a year from now the popular market averages could be somewhat lower than they are today. Yet, the important thing is how we VIew this antIcipated stock market weakness. If we subscribe to the theory that the entIre 1949-1966 period constitutes one single advance, we should certainly view any impending downturn with a great deal of alarm. If, on the other hand, as I do, we believe that the present market is in the process of completing a bas e formation for a new advance to beglIl 10 the latter part of this decade, then any weakness will provide one of the most im-portant buying opportunitIes for common stocks 10 r e c e n t years In other words, I believe that in later years, by hindsight. we will be able to view the 1965. 1966 or 1967 period as a WIde tradmg range which completed the base for a new upswing In 1959, in the analysis of time on the stock market clock, the conclusIOn was as follows- In conclusion, I belIeve the stock market will top out in 1960 or 1961 at around 750 to 800 During the next five years, we will have to drop the outmoded concept of bull and bear markets and concentrate on the outlook for individual Industries and issues. We will probably have to change our opinions on the outlook for many individual issues. We will not be able to solve the investment problems of the next five years by remaining static and owning the 'Favorite Fifty.' That investment pro g ram worked very well in the past ten years, but will not meet the probable changes of the next five years. If the picture is some-what obscure for the next fIVe years, it Is m u c h clearer for the next ten years. This is a growth country and we are still in the early stages of the advance. After the first wave is ended and the needed consolidating phase of the second wave completed, the econ- omy and the stock market will again embark upon another advancing phase. I do not expect that in the next ten years the market will duplicate the 300 risc of the past ten years. It could, however, be 100 hIgh er by 1969 or somewhere around 1250 and 1500 in the Dow-Jones Industrials. Although the time might have to be pushed forward to the early 1970's, there appears httle reason to change this prediction today. -An !.on 6, 1966 by IUr TabeIJ to the BMClub, BMton, MaS-'! April

– Walston &- Co. Inc INVESTMENT BANKERS MUTUAL FUNDS MUNICIPAL BONOS Members New York Stock Exchange . and Commodity Exchanges – OFFICES' COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER May 27, 1966 The prevailing stock market attitude appears to have changed from panic to lassitude. On May 17, when the Dow-Jones Industrial Average reached an intra-day bottom of 859.13, the index had completed the sharpest decline in over four years, a drop of 14.20/0. From that point the Dow chalked up advances in 7 out of 8 trading sessions to reach a high this week of 897. in a sharp upswing at Friday's close. The most notable feature of this rally has been the sharp reduction in trading activity. While volume had reached peaks of over 13.mi-llion shares on the way down and was almost lO,million shares on the day when the low was made, it has steadily declined since and reached a nadir of4.8million shares on Friday, -Contrary on the.record neither bullish nor bearish. It is a phenomenon which has characterized a number of short term rallies within major downswings, but it has also taken place shortly after a good man major bottoms. The obvious question in the minds of a great many investors at the moment must be wliether the present upswing is simply a short-term interruption within a major downtrend or whether it constitutes a signal that the downtre.nd has been rev;rsed. In tackling this question, a number of considerations present themselves, not the lell.fit-of which is the rather striking internal condition of the market as of last May 17. At that point, most of the short and intermediate term indicators followed by this letter had reached a deeply over-sold condition normally chaYacteristic of major market bottoms. One such indicator, indeed, became more over-sold-than it had done at any a rather striking comparison when one realizes this period includes the m ke t rRs of 1946, 1957, and 1962. Last week's rebound from this over.sold poanio9J a ro u earish inferences -in all but the most sensitive of these indicator-so \yV However, one interesting over-sold markets may be – noted. In a.gr-eat manY,cases.the tion'does not turn out to be the low . a he . extremf! oyer-sojd condi,- ery often' the extreme over-sold'low- is followed, from two J1i a further low just sligh1lbelow the previous one. In gene t ecline tends to be more selective and a great many stocks do no e w oms. It is'ihese stocks, generally, that tend to be the leaders of the u ace. — Of course, the os – – ity remains .that the upward move from May 17 to date is nothing more than a 'cal interruption in a major downswing. Such an interruption occurred, to cite one example, in August 1957 when the Dow, having dropped off sharply from a high of 524 t9 a low of 470, staged a smart rally which carried, six days later, to a high of 488, the bottom of this rally also coming from an extreme over-sold condition. The strength proved to be abortive, however, and stocks moved on to new lows with the Dow reaching its nadir of 416 in October. One observation about short-term rallies in bear markets, however, can be made. They tend, in general, to be fairly short. In almost all cases, they last, from bottom to peak, no more than six trading days. More- ,over, they are generally erased and a new low made within two weeks. Thus, the ability of the present upswing to extend itself for nine trading days must be considered a mildly Further .e-ncouragement woulfl ie if !he D()w could get through next week, say, without posting new lows. Such action would not eliminate the possibility of the terminal decline which follows an over-sold condition noted above, but it would sharply lessen the probability th-t last week's action constitutes only a minor interruption in a headed for significantly lower levels. Meanwhile, our basic opinion on the character of the market remains unchanged. As time goes on, it will become evident that a great many stocks commenced major downtrends at their February highs. A great lllany more stocks show no evidence of cessation in the downtrends which began last year. The range of attractive stocks presently available has been drastically restricted, and it should be the objective of every investor to upgrade his portfolio accordingly. Dow-Jones Ind. 897.04 ANTHONY W. TABELL Dow-Jones Rails 230.89 WALSTON & CO. J INC. market letter is published for your lind Information and IS not an offer to lIell or solicitation to buy an)' aeeurltles discussed. The In- fonnatlon WAS obtamed from sources we bt'heve to loe reliable. but we do not guarantee ita accurflC. Walston & Co.. Inc. and Its officers directors or emrrloyees may have an mterest In or purchase Ilnd Be'j the 11I!'CUritles referred to herem. WNSOI

Walston &Co. Inc INVESTMENT BANKERS MUTUAL FUNDS MUNlClPAl eONDS ( Members New York Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER June 3, 1966 …… . The Dow-Jones Industrial Average dropped off sharply on Tuesday of this week, glVlng up almost thirteen points and effectively ending the sharp rebound from the May 17th low of 859.13. However, selling conspicuously failed to follow through, and stocks were off only moderately.ino-light volume on Wednesday and Thursday. A Friday rally brought the Dow back to an.iritrat1ay.high of 890.86. In last week's letter, we noted the fact that ability to hold above the 859.13 low for the remainder of this week would make the recent rise look very much unlike the typical short term rally within a major downswing. In a market under continued strong selling pre- ,-' — – generally reasserts itself quite strongly. This has not been the case to date, and continued ability to hold above the oJd low next week would reenforce the bullish implications. All this does not mitigate against the possibility which we noted last week of a new low in the Aver- ages being made. It does, however, indicate that that low might well be the bottom for some time. It remains, of course, possible (though not, we think, probable at this time) that a major downswing is underway and that the popular indices are headed significantly lower. However, we feel the investor can best protect himself against this market risk by judicious selection of securities. Let us try to make this statement a bit clearer by reference to the typical stock market cycle. In general, a stock will move sideways for a protracted period of time, forming a base before moving ahead The next step is, of course, an upward mov followed by another period of sideways movement during a top is formed. A downwardmove commences and the process then starts ov a r. 0 This is, of course, drastically oversimplifief\l 'ro s, an es are often hard t recognize. For example, it is seldom possible to 1 t a top has been formed until such time as a long sideways trading ted on the downside, and, either a subsequent rally fails to push throug 0 w hi ,or the stock remains weak for a protracted–period'of'-time-without In the light of the r p c' – is'requires-time.– —-' – – – , most securities today into four broad groups. The first which made their highs some time ago, and formed tops which w c ir d by inability to move into new high territory. These securities a i f' 1 wends and. at worst, could move lower in a poor mar- ket while, at best, t 11 e . e a long time to form a base before moving ahead. In- cluded in this category t Automobile, Retail, Food and Grocery Chain issues. The second cate includes those stocks which posted their highs more recently, but, on the recent wea ness, broke out of tops with significantly lower downside potentials. In this case, however, the downside breakouts are so recent that they have not yet been con- firmed. This category would include most of the leaders of the past year. In the third category are stocks which have just recently broken out of long term base formations and are not too far above the support provided by those base formations. These stocks provide the combination of protection against a sharp decline in the market and ex- cellent capital appreciation possibilities should the market rally. Major industrial groups in this category would include the Aluminums, certain Papers, Office Equipments, and the majority of the stocks in our Recommended List. The final categoryincludes tJ1.ose stocks which have spent the last four years doing nothing but moving sideways. These-trading areas ultimately will constitute base However, since the upside breakouts have not taken place, there is no indication of any im- mediate move. In most cases, however, downside risk is sharply limited. Stocks in this group include Steels, Rubbers, Tobaccos, etc. Obviously, the stocks in the first group should have representation in an investo portfolio at this time. Those in the second group, while they may be held by the nimble trade should be retained only by investors prepared to recognize the risk involved. It is our feelin that a combination of downside protection and long-term upside potential can best be achieve by restricting the largest portion of holdings to those stocks in the last two categories men- tioned above. Dow-Jones Ind. 887.86 Dow-Jones Rails 228.00 ANTHONY W. TABELL WALSTON & CO. INC. AWTamb Thill market letter \s Ilubbshed for your convemence I.nd inCoMnatlon and l'l not an offer to lleil or It olicitatlon to buy Any securities discussed The m (ormntion was obtnmed from BOurces we believe to l'e rehable, hut Vd.' do not guarantee Its accuracy. \Vnlston &. Co, Inc. and Its officers, dIrectors or employees may have An Interest in or purchase and fie I the securities referrtd to herein. WNSOI .-

Walston &Co. —–Inc —– INVESTMENT BANKERS MUTUAL fUNDS MUNICIPAL BONDS Members New York Siock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS TABll1.!5…MARKELLEU.ER June 10, 1966 The stock market staged a smart rally on Friday with the Dow-Jones Industrial Aver age advancing 9.13 points to reach an intra-day high of 896.77, the best level attained since the post- Memorial Day slide two weeks ago. In doing so it followed through with a tendency of some interest, although of problematical significance, which has obtained for the past three months. For some reason, although the general trend of the market has been down- ward during the last quarter, the Dow has advanced on ten of the past thirteen Fridays. Of greater significance was the sharp rise in volume to 8,240,000 shares. On ten of the eleven trading days up until Thursday, volume had been under 6 million shares and, in- had reached.a.low-o.f.,.4,.2 60, 000 shares August, 1965. Of even more interest is the division of volume into upside and downside activity as compiled by Scantlin Electronics. At the end of last week, a ten-day total of downside volume had reached a low of just over 20 million shares, a figure not equalled since the Fall of last year. The difficulty was that upside volume, measured on the same basis, had also dropped – – – from a high of almost 60 million shares in April to a low of around 21 million shares at the middle of this week. In other words, the sharp dro.p to the mid-May lows, which produced the drastically oversold co.nditio.n previously noted by this letter, was halted, not by any concerted buying, but by a sharp decline in the heavy and per- sistent liquidating pressure which drove the market downward in late April-early May. This is all to the good. Panicky liquidation is a persistent phenomenon and tends to run its co.urse p.ther quickly. As we have already noted for the past two weeks, the drying up of this liquidation argues against substantially lower fer some time. What is needed, however, to bring the market off dead cen i 'gn of increasing up- side volume. Although Friday's actio.n could be the su pheno.menon, it is a bit early to. say that this is definitely the case. 1\ One interesting note in regard to the ume, is its relatlOnshlp to. the short interest. the short interest ratio, which consis only is or terest released by the New-York – Steck Exchange at the middle preceding 30 -day period. Thi the suppo.rt provided t gs by the average daily fer the a\, in the past, been a fairly. accurate guge of interest. In the past, a short mterest ratlO above 1. 5 ( 1 1/2 times a olume) has had moderately bullish implications, and a short interest ratio 's' g t rd the level of 2.00, or twice average daily vo.lume, is often a factor indicativ 0 major bottom. As of last May 15th, the ratio was 1. 1, a figure having neutral egative implicatio.ns. For the mid-April – mid-May perio.d, ho.w- ever, average daily volume had been much higher. With the low volume of the past few weeks, average daily vo.lume fro.m mid-May to date has been around 6.4 million shares and could decline further depending on next week's actio.n. Last reported short interest, just before the market low, was 10.3 million shares, and, if this figure remains unchanged, it will produce a short interest ratio of 1. 6. A rise in the short interest, which will be reported this week, would push the ratio even higher. Actually, the most bullish possible eventuality for the internal health of the market would be for the Averages to remain at around current levels for some time while a base is completed for a reaso.nably substantial advance. Since early May the Dow has held in an 'area bounded by, rouglUy, 904 on tlie–Upside and 866on tne dcnvnside on anflOurly basis. The present upside implications of this base are, at the most optimistic, a rally to around the 940 area which is the level at which the next heavy amount of overhead supply exists. Were the market presently to break above 904 and reach that level, a good deal of work would be required before the advance could be resumed. More optimistic, from a long term point of view, would be continued backing and filling around current levels, perhaps coupled with a move to new lows, before a major advance commences. Such action would produce a base which COUld indicate an upside move of substantial proportions. Dow-Jones Ind. 891. 75 Dow-Jones Rails 231. 24 ANTHONY W. TABELL WALSTON & CO. INC. ThiS market letter IS published for convemence I nd L!lformatlOn Rnd 1, not an offer to sell or II rollcltatlon to buy Any fle(!Unties diSCUssed The in- formation was obtmned from sources \\e bdlt'v(' to Ie rehable. but we do not Its nreuraC'v \\'Rlston 8. Co. Inc find Its officers. dLred.l'lrs or employees may have an Interest III or purchn.qe and Sf I the qeeUntLes I eferretl to hero'in WN301

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 June 17, 1966 GOODYEAR TIRE & RUBBER CO. Current Price 51 Probably the most prominently featured Current Dividend 1. 25 news affecting the investment community in Current Yield 2. 50/0 recent weeks has been the sharp decline in Long Term Debt Common Stock 327,650,000 35,706,296 shs. automotive sales and resultant inventory prob lems affecting auto dealers. Under the stimulus of this news, stocks of major auto com- Sales – 1966-E Sales 1965 2,50,0,000,000 2, 226,'300,-000 – Earn. per sh. 1966-E Earn. per sh. 1965 3.50 3.06 panies have been prominent on the list of new lows. – ParadoxicaUy, at-the -sametime, companies in the tire and rubber industry, a major supplier to the automobile industry, have been reGular items on the new high list, and Price/1966-E Earn. Price/1965 Earnings 14.6 16.7 Mkt. Range 1966- 62 57 – 24 5/8 the relative action of these stocks has improved sharply in recent weeks. Technical patterns, moreover, are favorable, indicating ultimately higher levels. PIE Ratio Range 1966-62 22 – 12 There is, actually, a fairly good reason for this divergent performance. Tire sales can lJe divided into two categories, original equipment and replacement. The former, ob- viouslyenough, varies directly with automotive output. is a product of the number of cars, especially older cars, on the road. rHe be!- of autos two or more years old is expected to increase, roughly, 40/0 in 1!W6 ove 9 , n increase in 1967. \Yr; ould show a further The prospective increase in of importance to the tire manufacturers. Original equipment business . s, e obviously, c;xtremely narrow -Replacement on , Moreover, this profitability companies concentrate more and more on the marketing ium I a ou\;\-owth of the recent concern over automotive safety. . There is s . for unusual growth expectancy in the tire industry. Re- cent record producti t me eavy–m;Iginal equipment demand has placed an unparalleled strain on existing capaci with many plants operating on a three-shift, seven-day schedule, and a great deal of re lVely inefficient plant being utilized. Continuing heavy capital ex- penditures to replace inefficient plant should have the effect of improving productive effi- ciency which is probably fairly low at the current high sales level. Goodyear Tire & Rubber, which is the largest factor in the replacement tire market, should be a of all the factors mentioned above. The company's replacement sales are much greater than its original equipment volume (it is the major supplier to Chrysler, with some sales to General Motors and Ford). The company markets replacement tires through 165,000 independent dealers, distributors and stores, and 1,000 com- pa ny outlets on a worldwide basis. Recent purchases of Vanderbilt Automotive Centers and the manufacturing and retail outlets of Lee National Corporation further enhance the market ing potential. – – — – In addition to being the world's leading rubber fabricator, Goodyear derives some 400/0 of sales from chemicals and plastics, industrial rubber goods, aviation items, shoe products, etc. Foreign sales are about one-third of the total. Earnings progress has been good with an increase having been shown in seven years out of the last ten. For 1966, per share results are expected to improve to 3.50 from 3.06 in 1965. The dividend, presently 1. 25, has been repeatedly raised over the years. Present prices mark the stock at less than fifteen times estimated 1966 results, an historically low level since 1958. From a technical point of view, the stock has a long term objective of 82 and a short term projection of 66 with strong support in the upper 40's. The combination of high quality, historical cheapness and downside protection, plus a good upside potential, seem to represent an interesting investment opportunity, and we are adding the stock to the High Quality section of our Recommended List. ANTHONY w. TABELL Dow-Jones Ind. 894.26 Dow-Jones Rails 231. 96 WALSTO 0 N & C . INC . .. This market letter Is publlshedfor your convenience Hnd mrormatlon nnd IS not nn offer to lIell or R soliCItAtion to buy Rny discussed. The .n formatIOn WJUI obtained from we blh('vl' to be rehnble, but we tlo not guarantee Its nccurnc) Wnlston l.. Co. Inc. And Its officers, directors or employecll may have an mterest In or purchase nnd sell the ;ecunltes rc'erre! to herem. WN801

Walston &- Co. Inc INVESTMENT BANKERS MUTUAL FUNDS MUNICIPAL BONOS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER June 24, 1966 Insofar as the Dow-Jones Industrial Average is concerned, the market remains on dead center. One possible interpretation of the action since early May is that a base is presently being built in the 866-904 range to sustain a market advance later on in the Sum- mer. Currently, the most optimistic upside implications of this base are 924-948. Obviousl the longer the market continues to back and fill around present levels, the greater this poten- tial becomes. Alternatively, failure to generate enough buying interest to move decisively through the 905 level could lead to a test of the former lows. Such a test, if it did occur, would probably be a relatively low risk buying opportunity. Meanwhile, asrepea empha -theinvestor-'sbest7pr-otection '. lies not in trying to guess the course of an uncertain market, but in making sure that the stocks he owns combine good upside opportunities with relatively limited downside risk. A few stocks in our Recommended List, which fall into this category, are discussed below. ALUMINUM CO. OF AMERICA (86), the industry leader in aluminum, continues to appear attractive at current levels. While the consumption of aluminum has grown dramatic- ally over the past years, the company's earnings have remained relatively stable as margins have trended sharply downward due to excess capacity and increasing costs. It now appears this downward trend has been arrested. In 1965, margins continued to improve as company's earnings of 3.41 were up from 2.72 in 1964, showing a much better percentage increase than sales. This should continue throughout 1966 and earnings this year should approach 4.50 – 4.75 on estimated sales of 1. 3 billion. The tight supply situation might be eased a bit in 1967 due to new production facilities coming on demand for aluminum is indicated for the coming years. T r, price increases in fabricated products, should wideW0J\-t maintain its relative industry position. 1\ gin . continued long term ith further selectiv a enable Alcoa to GILLETTE (37), the leader in the e field, appears to have suc- .. offered similar improved pro has now been captured an the W y as tio -s of this stainless steel razor blade market distribution on a national level Super Stainless blade. T i , w' he introduction of the new Techmatic razor, 'em- ploying a continuo a steel coiled in a replacement snap-in cartridge, gives Gillette representatio single and double-edge blade markets. Other divisions contributing to Gillette th include the Toni divisi()n, the Paper Mate companies, and a men's and women's etry division. A marked turn-around in earnings is now apparent. Earnings for 1966 should approach 1. 70 vs. 1. 49 in 1965. Sales for 1966 are projected at 380 million or more, up from 339 million in 1965 – the ninth successive sales increase in a row. Although the stock historically sells at a high price/ earnings ratio, we continue to fee the current price does not begin to fully discount expected improvements in the company. UNITED FRUIT (31), the largest producer, transporter and seller of bananas, has successfully begun to restore operations to the former level of profitability. This has been accomplished with the development of the new strain of Valery bananas which is more resist ant to windstorms and disease. Although banana selling prices averaged well below those of a year earlier, profit margins widened substantially, reflecting the success of this new bana Although further banana prices are likely to continue to decline, United- Fruit's costs-appear- to be declining at a greater rate. With the outlook substantially improved for the Valery banana, the company has embarked on a program of diversification through acquisition, in the institutional food service field. In April, United Fruit acquired J. Hungerford Smith &. Som- pBny which makes and markets beverage bases, fruits and flavors. United must. sub- mit to the U. S. District Court by the end of this month a plan to divest itself of properties capable of importing into the United States about 9 million banana stems a year. ,remain, however, uncertainties related to this consent decree compliance. Sales and servic revenues in the current year are expected to exceed the peak 381. 5 million of 1965. Earn- ings for the year could approach the 2.75 level per share compared with 2. 17 for 19,65. Dow-Jones Ind. 897.16 Dow-Jones Rails 231. 56 A WT RJS -amb —-ANTHONY W. TABELL WALSTON & CO. INC. .. ThiS market letter Is pubhsht!d for your convenience and .IHCormatlOn and IS not an offer to sell or II. solicitation to buy ftny M!eUrltU'!5 dl8C!USM'd. The InformnUon WftS obtamed from Bourees w(' bdleve to be Tehabll', but we do not RllRTantee its accumcy Walston &. Co, Inc. and Its officels, dlrerwTS or empIO)et'B may have an mtereBt m or purchase and Bell the bccurltics referred to herem WN.801

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