Viewing Month: June 1968

Tabell’s Market Letter – June 07, 1968

Tabell’s Market Letter – June 07, 1968

Tabell's Market Letter - June 07, 1968
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Walston &eo. – Members New York Stock Exchan98 and Other Principal Stock and Commodity Exchange. OVER 100 OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER June 7, 1968 Last week saw the equity market put on what, lately, has come to be almost an accustomed show of strength. Some 17 points were added to the Dow Industrials in the fir03t two days of the week, and a 9-point drop on Wednesday was quickly erased by renewed strength on the final two days. Meanwhile, the Rail index chalked up a new 1968 high. Weekly volume, in the process, set an all-time peak. Let us make no bones about it. There is no point in underestimating the strength and vigor of the present stock market. The underlying strength perhaps requires unders(!oring at this time since it is not adequately being reflected in the Dow-Jones Industrial Average, which is, of course, the most widely followed single .markeLindicator. , Now, long-time readers of this letter are aware that we have never indulged in the temptation to join the Knock-the-Dow Club – a fraternity with a broad membership among market commentators. We are fully aware of the fact that the Dow is a statistical monstrosit We are equally aware that it represents the fluctuations of only 30 stocks. Yet, pointing out these weaknesses is to overlook the Dow's two great strengths. These are, first of all, that it has been computed continuously over all of this century and is, in fact, the only major average with that long a history. (It should be pOinted out that experienced technicians look with some skepticism on back-computed indices. Standard & Poor's indices, for example, are available for the same period, but most of the computation was done in the middle 1950's) The Dow's second great strength is that, let us face it, it is the language most commonly understood by most investors. We ,would be willing to wager that not one in 10,000 readers of this letter will know, before they read the table below, Poor's 500 was. (We had to look it up when we constructed e hih in the Standard & 'Most readers, however are aware that, in the case of the Dow, it was, Getting back to the point of exercise, however, . Do f unrepresenta tive of the market strength. The table below s 5 sth el the Dow, Standard & Poor's 500, and our weekly breadth index based on a a s an clines at variops critical pOints. As the table quite clearly shows;-a c – ween the Dow'and'the'S&P has'been apparent for over a year. observation is the fact that on the rally from October 1966 to Septemb 1 e quite clearly recovered its entire loss and went 0,; to a new gh, w ak was well below its old high. From September of last year through f, 0 indices moved more or less in tandem, going to ne lows together in No 15, 'ng up highs (under the previous highs) in January, and again making new lows 'n ch. Still, even for this period, the S&P Index was somewhat stronger. However, in 11 and May the discrepancy became pronounced once more. The Dow failed to better its high of last Fall during May, while the S&P index bettered both the September 1967 high and the February 1966 high. Likewise, this week while the Dow was still holding below its peak of last month, the S&P moved on to a newall-time record level. The strength of the broader average is paralleled in our breadth index,which confirm- ed the strength in the S&P by moving above its January 1968 high last month and chalking up another new peak this week. It is now within an ace of establishing a confirmed uptrend by bettering its September 1967 peak. kl DJIA S&P 500 ri' aoth Feb. 1966 High 1001. 11 94.72 594 Oct. 1966 Low 735.74 72.28 487 Sept.1967 High 951 57 98.31 558 – – Nov. 1967 Low 839.40 90.09 530 DJIA S&P 500 Jan.1968 High 97. 84 Mar.1968 Low 817.61 86.99 May 1968 High 935.68 100.15 June 7,1968 High 920.84 101. 89 Weekly Breadth 550 518 551 555(E) We have, in short, if we look at the broader stock market indices or at the breadth in- dex rather than the Dow, a strong and confirmed uptrend .This is not to say that the market will be proof to reactions or even that deterioration and consequent vulnerability may not develop almost immediately. This, however, is sheer guess work. A fully invested position to take advantage of what appears to be the obvious trend at the moment, therefore, appears appropriate. NOTE The above was written before the announcement of higher margin requirements.While this may cause near-term weakness, the basic conclusions are, of course, not altered. Dow-Jones Ind. 914.88 Dow-Jones Rails 266.17 ANTHONY W. TABELL WALSTON & CO. INC. AWTamb This market letter Is published for your convenience And InformatIOn Rnd is not an offer to sell or a Boilcllation to buy any secUrlties ,hscussoo The Information was obtained trom sources we believe to be rehable, but we do not InlfLrRntN! Its l.ccuracy, Walston & Co., Inc nnd Its officers, directors or emplOYee! may have an intereJIt in or purchase and sell the seCufltus referred to herem WNBOl

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Tabell’s Market Letter – June 14, 1968

Tabell’s Market Letter – June 14, 1968

Tabell's Market Letter - June 14, 1968
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Walston &Co. Inc. FILE Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OVER loti OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER June 14, 1968 The silly season is with us again — has been with us for some time in fact – and it is, we suppose, time that due note was taken of the fact in this letter. We refer, of course, to the tumultuous activity and wide gyrations in a variety of what have come to be known as 'swinging' stocks — most of them on the ASE and Over-the-Counter, and engaged in wild, improbable businesses that very few people understand. The above paragraph opened this letter just eleven months ago on July 14, 1967, and it can equally well be used again today, for the same thing is happening again — redoubled and in spades. The Amex is boiling,and the frenzy in the Over-the-Counter market has, -un- believably, become even ,greater than last Summer's. To this familiar scenario .has been ad- ded a skyrocketing new issue market recalling the famous Don1t-go-broke-go-public motto of 1961. We are, as the financial pages seldom tire of telling us, in the midst of another era of unbridled and, to a great degree, senseless speculation. There is a common chain of reasoning running through all this. The chain runs (1) speculation is rampant; (2) speculation is bad; therefore, (3) we should worry about the stock market. A host of factors give rise to this chain, not the-least of which, we suppose,are the Puritan ethic and a remembrance of the events of the 19301s. The lesson is a valid one, but it can be oversimplified. To the technician, the relationship between periods of high speculative activity and stock market tops is a complex one and one best examined in the terms of numbers rather than emotion. There has, indeed, been an historical relationship between speculation and stock market peaks, yet the correlation is difficult to lchanging somewhat in recent years — a fact which does no n has been the task of stock market prediction any easier. At least until recently, most indices of spec e ai- tended to be so-called leading indicators. In other words, they be the popular averages. The table below shows the time of the peak in the – nes strial Average for the six major . market tops of -the past-32 years, in -three-widely-used indices of specu lative, confidence, total NYIE basis), ratio of Amex volume to NYSE volume, and the Standard & Po 1 Index. As the table quite clearly shows; through 1961 at least, s c i 1 – had a well-defined tendency to peak out in advance of the market. Dur- – -, – er words, it was profitable not to worry about specu lation, but rather to a 0 eculation coming to an end. A period of three to six month of reduced exuberance 110 g an outburst of enthusiasm generally constituted a pretty re- liable sell signal. This ationship was reversed, moreover, in 1966 when most indicators of speculative confidence peaked out after rather than before the Dow-Jones. Peak in Peak in Peak in Ratio of Amex Peak in S&P Low- DJIA NYSE Volume Volume to NYSE Vol. Priced Stock Index June, 1946 April, 1946 January,1946 February, 1946 January, 1953 February, 1951 July, 1952 January, 1952 July, 1957 May, 1955 March, 1957 April, 1956 January, 1960 April, 1959 March, 1959 March, 1959 November,1961 September,1961 June, 1961 May, 1961 February, 1966 I\pril, 1966 February, 1966 April, 1966 What then of the current speculative phase We are inclined to guess that the present phase may ultimately peak out, not as did 1966, but in a manner similar to the prior market tops. The continued market strength following a speculative upsurge has, generally in the past, been caused by a quite understandable phenomenon — the movement of speculative mone into investment-grade and! or cyclical issues. Thus, the Dow average, composed of such issue , has tended to reach its zenith at a later date than the more speculative indices. All of this generally takes place at a time when market breadth is deteriorating and when cash reserves in the hands of investing institutions have been fully expended. By contrast, at the moment, cash reserves are still at close-to-peak levels, and breadth has been unusually dynamic rathe than static. If this theory is correct, we can recognize the current speculative lunacy for what it is, without drawing overly-pessimistic conclusions as to the investment climate for the months ahead. Dow-Jones Ind. 913.62 Dow-Jones Rails 265. 58 ANTHONY W. TABELL WALSTON & CO. INC. AWTamb Thl8 market letter i8 published for your convenaence and mformatlon Rnd Is not an offer to sell or a soliCitation to buy flny diSCUSsed The in- formatJon was obtained from sourees we believe to be reliable. but we do not guarantee Its aCCUrac)- Walston & Co., Inc nnd Its officers. directors or employees may have an interest In or purchR8e and sell the securities referred to herein WN801

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Tabell’s Market Letter – June 21, 1968

Tabell’s Market Letter – June 21, 1968

Tabell's Market Letter - June 21, 1968
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———– Walston&- Co. Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OVER 100 OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER June 21, 1968 AMERICAN & FOUNDRY CO. Current Price 22 1/8 The year 1968 is likely to be recorded Current Dividend 0.90 as a significant milestone in the history of Current Yield 4.10/0 AMF. For one thing, this will be the first Long-Term Debt 3. 90 Cum. Pfd. Stock Common Stock . Sales-1968-Est. Sa1es-1967 170,800,000 35,800 shs. 17, 028, 609 shs. 467,200,000 year that results of overseas operating su sidiaries will be consolidated into financial statements. This should help to accelerate AMF's already favorable growth pat -tern in reflecting the rapid-growthof over seas business which in turn mirrors the Earn. Per Sh. 1968-Est. 1. 40 – 1. 45 steadiiy rising standards of living in the Earn. Per Sh. 1967 1. 37 areas within which AMF operates. Mkt. Range 1968-1967 251/4-14 1968 also will be remembered as the year when AMF re-affirmed its former policy of growth-through-acquisition. Many of the company's present product lines were ac- quired as a result of merger and acquisition, but in recent years this trend had been deliber- ately slowed in favor of upgrading existing operations. Now that operations are flowing more smoothly, management again is turning its attention to new product areas that offer above- average growth. AMF's pri mary direction for expansion has been into the leisure time area and, as a re- sult, the company has established an important position products field. Included within ,the product line are such I e bi cles, hob!j)y toys an ,bowling supplies. This past March, AMF acquired acturers of the highly popular Sailfish and Sunfish fiberglass sailboats. Mo an 70 of these already are in use and demand appears to be accelerating r mg season. Alcort also manu- factures the a burgeoning ski craze, AMF recentl a . . boat. In to the J6f petitively priced fiberglass ski. Bowling activities now co t e a of income in reflection of the fairly expand. Since intro u '0 as led the field and currently has installed more than 100,000 pinsp tely one-third more than its closest competitor, the Brunswick Corporatl . Sales break down app . ately as follows Industrial products, including cigar and cigar ette, baking and oil fi equipment, 360/0; recreation products, 200/0; bowling, 180/0; and gov- ernment items, 260/0. Sharply increased government business was responsible for much of last year's 120/0 jump in revenues. However, profit margins were penalized. Great Britain's sterling devaluation also worked to the disadvantage of 1967 earnings. For the current year, sales are expected to break above the 500 million level for the first time, rising to a pro- jected 535 million, while earnings are estimated to be the highest since 1961's 1. 70 a shar probably approximating the 1. 40 to '1. 45 a share level. First-half results may be somewha adversely affected by a strike currently in progress, but order backlogs suggest this will be more than made up in the second half. The 90 annual dividend, maintained for almost 7 yea now, should be considered a candidate for liberalization in line with normal company payout policy. . From the technical view, AMF has formed a base of considerable extent over the last several years during which accumulation has apparently been in progress. With the marking up stage now believed to be in the early phases and a price objective initially around 30,fo1lowed by a higher goal in the mid-50's, accompanied by firm underlying support at 20-18, these shares again are recommended for purchase. AMF is in the Price Appreciation sectio of our Recommended List. We are removing four issues from our Recommended List this week. We suggest accept- ance of profits in Eagle Picher Ind. and SChlumberger. Squibb Beech-Nut entered our list when it was spun off from Olin Mathieson and we feel that the funds might profitably be em- ployed -elsewhere. In addition, we are disappointed with the technical action of Communica- tions Satellite and are thus removing it also. Funds realized from the sale of these issues could be utilized for the purchase of AMF, or other issues on our Recommended List such a American Bakeries, Great Northern Paper, First Charter Financial, Robertshaw Controls and Stokely-Van Camp, Inc. Dow-Jones Ind. 900. 93 Dow-Jones Rails 264. 15 HAlUW W. LAUBSCHER for ANTHONY W. TABELL WALSTON & CO. INC.

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Tabell’s Market Letter – June 28, 1968

Tabell’s Market Letter – June 28, 1968

Tabell's Market Letter - June 28, 1968
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Walston &Co. —–Inc —– Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OVER 100 OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER June 28, 1968 Last week saw a definite dampening of the ebullience which had characterized the stock market to a greater or lesser degree since April Fool's Day. Despite the loss of momentum, however, what occurred was not, so much,a downswing but, rather, a cessation of the rise and a rather sizable shift in market leadership. In terms of the popular averages, actually, the week was more or less of a standoff. The Dow-Jones Industrials, which the previous Friday had closed at 900.93, wound up at 897.80; the Rails closed at 201. 77 versus 264. 15 a week ago, and the Utilities wound up the week at 132. 60 a 133.44 ;lose on tended-to outnumber ad- vances on all four trading days, but the margin generally was not great, the poorest per- formance being turned in on Tuesday when 480 stocks advanced as against 860 which dropped in price. On the other three days, the differential was less than 200. That there was some vitality remaining in the market was evidenced by the significant number of new highs which occurred on most days. On Thursday, some 82 stocks chalked up new 1968 peaks, including a liberal number of issues whose names had been strangers to the new- high list during the early part of the year. Prominent, for example, were a number of electric and gas utilities, issues which have hardly been considered swingers by the invest- ment community to date. The performance of the utility group, actually, has been rather interesting. The Dow-Jones Utility Average closed on Monday, June 17th, a Five trading days later, on June 24th, it had advanced to 134.27. This adva 0 is roughly 7.2 or the equivalent of a 60-point rise in the r al. . easonable to specu- late that lf the industrials had advanced anything lik oin 0 a five-day period that the fact would have been rather widely he valent utility advance went, unnotieed. ou.side In the process of its advance, ct l(ijJ- ompany index actually produced a breakaway gap sort of a – week ago. This formation is strikingly reminiscent of the simi b t industrial index at the end of March when the present advance be a 0 lar superstition, incidentally, if this gap is truly of a breakaway nat t 0 lkely that it will notbe filled; i. e. there is no necessity for the imle to the area, around129, where the gap took place. At almost the e time as the dull utilities were moving ahead in a straight -line advance, so-called glamour issues were displaying their characteristic volatility — this time on the downside. Control Data, which had posted a high of 174 as recently as mid-June, wound up the week at 148 1/4, and this performance was, by and large, typical of a host of stocks that had been market leaders since mid-February. By and large, the improved action of a great many higher grade issues — the utilities are only one example — war, noticeable during the past couple of weeks. We have talked before in this space about the necessity for rotational leadership in the market and, at the risk of becoming boring, we think it worthwhile to stat e again that the emergence of new leadership is crucial to a sustained market rise. The hightechnology leaders of the 1967 advance have, by and large returned to prices approximately equalling the levels they had re.ached a year ago — levels from which they subsequently declined, in some cases, 300/0 to 500/0. We do not think it reasonable to suppose that, from current levels, they have sufficient vigor to move the market to any great degree. What must take place at this stage, if the advance is to be sustained, is a more widespread investor recognition of the prospects of hitherto neglected groups. If this takes place, and we see no reason why it shOUld not, we think that the lllvestment climate for the coming months can continue to be extremely favorable. Dow-Jones Ind. 897.80 Dow-Jones Rails 261. 77 ANTHONY W. TABELL WALSTON & CO. INC. AWTamb Thus market letter is I)uhllshed for your COtlVlmence Rnd )nfOrmflhon Rnd )'l not an offel to seU or I SOhCltatlOn to buy In 'eCUntle, ,hcussed The Information was obtained from sources we beheve to be rehabl but we do not guarante(! Its accurllC Wal'lton 8. Co, Inc and It, ofikels, dlrcct)rs or etnDJoyees may have an Interest ltl or purchlLIe And sell the secuntu's I eferred to hel elf' WN301

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