Viewing Month: December 1968

Tabell’s Market Letter – December 06, 1968

Tabell’s Market Letter – December 06, 1968

Tabell's Market Letter - December 06, 1968
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Walston &Co. Inc Members New York Stock Exchonge ond Other Principal Stock and Commodity Exchonge. OVER 100 OFFICES COAST TO COAST AND OVERSEAS FILe For the first time in four weeks (and for only the fifth time in seventeen weeks) the Dow-Jones Industrial Average managed to show a lower Friday close by a modest seven pOints. This weakness, plus the overbought condition of most short-term oscillators, leads to the belief that some consolidation will be necessary prior to an assault on all-time high territory above 1000. On the bullish side, however, must be counted the existence of support at the 960-950 area, plus the absence of any appreciable top. Moreover, as we move into December, the typical year-end rally pattern becomes a consideration. 1968 will unquestion ably be an up year for the market, and, in such years, there is a noticeable tendency for the to. ..2,cc u r in th,e Elopth. Meanwhile, regardless of thO;; m-arket, individual 'stocks continue to p-ursue-their di.ver courses. Four issues from our Recommended List, which appear particularly interesting at the moment, are the following ALUMINUM CO. OF AMERICA (76 1/2) … Alcoa has been one of the headliners in the recovery movement carried on by the aluminum industry group in recent months. Although the earnings results for this year are not expected to equal those of 1967, per share net could approximate 4.80, off only slightly from 1967' s 4.88 a share, despite a two-month strike. The company still will manage to post a better showing for the year than its major domestic competitors. A more impressive gain is anticipated for 1969, with net perhaps rising to better than 5.25 a share, helped in part by expanding uses of the whilie metal. The auto industry already is experimenting with aluminum radiators which could prove to be an important breakthrough and result in substantial Technically, AA re- mains in a buying range with the upside objective at 110. 0 si pport exists at the 72-66 level. OLIN MATHIESON (46).. Olin has been one e brlg stars in the chemical fir- mament this year, rising almost 50 from e considerably improved cash ,osition, resulting from the sale of United N e hoI' s, widening profit margins in alu- minum and pyllrood operations and have all combined to foster dr5 t earnings fully expected to continue the recent uptrend, projections fo 9 a 80 a share, or better, up from the estimated 3.55 for 1968 4 . e e the move already accomplished this year, OLM still stands well b o ive at 60 and continues to be a strong buy recommen- dation, technically a f dam y. REPUBLIC S L 3/8).. In recent weeks, increasing interest has been reflecte fn the shares of steel panies. Much of this stems from the hopeful outlook for 1969, and beyond, which takes much of the sting out of the rather disappointing results for the year jus about to end.. In addition, there is rising optimism over the prospects for a decline in steel imports. Japan, a leading exporter to this country of steel items, already has agreed to re- duce its shipments from earlier anticipated levels. In Republic's case, this should help in- crease demand for stainless and alloy steels. Earnings results for 1968 will prove flat, despite a boost afforded by a change in ac- counting procedures, reflecting increased operating costs, the 10 tax surcharge and higher wage costs. However, 1969 is expected to show an improvement and current estimates call for net next year to rise to around 4.90 to 5.00 a share, from an estimated 4.70 this yea Technically, Republic remains attractive for purchase with an initial price objective near 70, followed by a higher 10nger-termgo9-1. support is – VORNADO (27 7/8). .. The decline in market prices of Vornado shares that took place earlier tlilS year wiped out almost all the gains of the last few years. Now, however, the ma- jor problem that caused this sharp decline is being solved and the outlook is bright enough to make VNO attractive for purchase in Price Appreciation accounts. The culprit in the situatio and the direct cause for a decline in earnings both in 1967 and this year was Food Giant Mar- kets, VNO's West Coast subsidiary. A revamping in operations and shifting of strategic per- sonnel is believed to have finally solved much of the earlier problem, and a return to wider p-rofit margins is believed in the offing. Technical factors reveal considerable new buying ha entered the picture, lifting the stock from a low at 20 posted several months ago. With an initial price goal at 32, and a higher long-term objective in the mid-40's, Vornado shares continue to be recommended for purchase. Dow-Jones Ind. 978.24 Dow-Jones Rails 278.06 HARRY W. LAUBSCHER for ANTHONY W. TABELL WALSTON & CO. INC. ThIB market letter 1& publlshed for your convenience and mformatJOn and Is not an offer to sell or a soliCitation to buy any seeurities diSCussed. The m. formation WBS obtained from sources we beheve to be rehable. but we do not guarantee Ita !1ccuracy. Walston & Co., Inc. and Its officers dlreetol'8 or emDloyees may have an Interest in or Rnd sell the .!!E''UrLtH!! referred to helem, ' A 'a b WN-3'!

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Tabell’s Market Letter – December 13, 1968

Tabell’s Market Letter – December 13, 1968

Tabell's Market Letter - December 13, 1968
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Walston &- Co.– Inc Members New York Stock Exchange and Other Principel Stock end Commodity Exchanges OVER 100 OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER December 13, 1968 Christmas decorations serve once again as a reminder that the season is upon us and that all good market-letter-writers will shortly be called upon to deliver them- selves of weighty thoughtsasltmth'erequity outlook for 1969. We intend to honor tradition and will devote this space next week to doing so. But as prologue to looking forward, it is perhap worthwhile to look backward at 1968 and see if it holds any clues as to the prospects for the year ahead. It is worth reviewing last year in the context of our forecast issued a year ago on De- cember 22, 1967. We devoted the first part of that letter to pointing out two facts. The first -'- forecast built into the then current level of stock prices, (Dow-Jones 885). We opined, therefore, that stock prices would tend to follow the course of business once that course became clear. The second point that we made a year ago was that a great deal of technical damage had been don by the market decline of October 1967. We said at the time – …. This damage must be re- paired by early 1968 if a continued advance is to be predicted. The long range outlook quite clearly calls for higher stock prices. What happens between January 1968, and the ultimate realization of that forecast, is the issue which is still somewhat in doubt. The issue remained in doubt at least for the first three months of 1968 during which time, it will be recalled, the averages continued to move irregularly lower – the Dow reach ing in March a 15-month low of 817.61 — producing one of the waves of pessimism that periodically seem to sweep the financial community. Then, of course, came the most dramati single market event of the year – April Day — to President John- son's televised address, the market rally which character d nine months of the year began. As the rally progressed, fuel was adde!1teby realizationthat1968' economically, was turning out to be a much better ye an m orecasters had anticipate The imposition of the surtax had, to date, c he economy, and riSing nation —-c – — -al income, accompanied by inflationa pre s e, ont' . Monetary expansion had, ap- -inirently, overpowered fiscal policy a to some heafihy re-examination of monetary thinking on the In any case, as th flow s p to bloom, it became evident that a possibil ity which we had outli e e forecast was materializing. We said – We canno help feeling that, – prises in the 1968 market, they will come on the up- side rather than the ide m the realization of the long range forecast sooner rather than later. The reason f is are two-fold. They are (1) that 1968 could be a better business year than m now anticipate and, (2) that there is still a good deal of room for improvement in the confidence factor in a great many, if not all, stocks. We conduded by expanding on the second point above, emphasizing that while many of the then-growth favorites were fully valued, a great many cyclical issues, despite relatively spotty earnings records, appeared historically cheap. The two issues we chose to compare were IBM, then selling at 50 times earnings, and Republic Steel at around 8 times. It is interesting to note that from the 1967 close to date, RS has actually slightly out-performed IBM – probably the first year that has occurred in a good while. Our concluding sentence mentioned the possibility of a re-evaluation of blue chip issues, and we said – We would prefer to enter 1968 by having a portfolio so constituted as to take advantage of any such re- evaluatiQn. This final conclusion was perhaps the most useful, since 1968 can be described as th year of the renaissance of the blue chip. For the first time in a great many years it was possible to achieve moderately spectacular investment results in such prosaic issues as Unio Camp or Royal Dutch Petroleum. Not that opportunities for aggressive investment were not lacking. The records of some of the building, savings and loans, and financial issues certain ly prove that. By and large, however, the market leaders of 1968 were an entirely new breed, while the favorites of the prior three years were lackluster performers. In summary, then, two salient factors appear to characterize 1968. First, in the economy, a money-fueled expansion, and second, in the market itself, a healthy upswing characterized by the re-emergence of high-grade issues. A forecast for 1969 will hinge, largely,on a decision as to whether these two phenomena were simply aberrations or the beginning of an ongoing trend. Wew.ilLdiscuss..this.,at greater length next week. Dow-Jones Ind. 981. 29 Dow-Jones Rails 278.64 ANTHONY W. TABELL WALSTON & CO. INC. This market letter 115 published for your conveDience Ilnd mformatlon II,nd Is not nn offer to sell or a SGlicltation to buy any seeUritleB thscuued. The Information was obtained from Bourees \lot' believe to be reliable, but we do not guarantee its accuracy, Walston & Co., Inc. Rnd its officers.. dIrectors or employees may have an interest In or purchase and sell the secuntaes referred to helem

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Tabell’s Market Letter – December 20, 1968

Tabell’s Market Letter – December 20, 1968

Tabell's Market Letter - December 20, 1968
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&-Walston Co.- Inc. Members New York Stock Exchange and Other Principal Stock and Commodity Exchange. OVeR 100 OFFICES COAST TO COAST AND OVEfI;SEAS TABELL'S MARKET LETTER December 20, 1968 As the annual task of issuing a forecast for the coming year is once more approached, one is struck by how easy it would be to vary the prediction between extreme optimism and extreme pessimism, depending on one's own particular predilections and biases. For exam- ple, the bearishly-inclirre'l;Pfure'Ctist-erlicomd point to, among other things, blatant speculation in many areas of the equity market, current severe monetary difficulties, an uncomfortable rate of inflation, etc., etc. The optimist, on the other hand, could choose to emphasize the persistent and continuous demand for common stocks coming from a number of sources, the low rate of unemployment, the persistent rise in the money stock, and a host of other items. – –What me stock market-aC'tiliUlydoesiIlthe wlll4Je- dep-endent,'' in great degree, not only on these fundamental factors, but on the market's response to them — in other words, on the degree of investor confidence shown in the economy's performance. We return, thus, to a theme long familiar to readers of this letter — the importance of this elusive investor confidence factor in determining the course of stock prices. We have long maintained that there is but one sensible and rational way to approach the problem of gauging investor confidence. That is, through studying the action of the mar- ket itself, i. e., technical analysis. As the background for a forecast, therefore, we return to what is essentially more comfortable ground — the charts and data we 'maintain on the general market and on some 2,500 individual issues. We say that this is more comfortable ground because there is, at present, in these charts, none of the ambiguity suggested above. It is difficult at the moment to look at recent price history without being unequivocally opti- mistic about the market's outlook for 1969. There are a great many factors that could be cited s tt a positive invest- ment climate will prevail in the coming year. To , w ver most important one is the rally which began in the latter part of August a ontinu to December — a rally in which the Dow-Jones Industrials fading range which had contain- for more than t\V2.;years.We this . …Cnstitutes a long base, and the upside objective n c ea, conservatively, at 1100-ff50 more optimistically, for the g , O'the feasibility of,this projection is under- scored by analysis of the 0 Dow components. If the projection is correct, the advance hi ctober 1966 low is, at the moment, barely half ove The positive outlo . the fact that the last leg of the advance from March 1968 has been confir y b th and volume statistics all,the way along the line. There e technical deterioration which generally precedes the comple- tion of a major mark p. If the signs of such a top become apparent in 1969, we hope to take due note thereof and revise our thinking accordingly. At the'moment, it must be stresse no such signs have appea'red. Having delivered ourselves of the above thoughts, we hasten to add that forecasting is only a part of the task of determining sensible investment policy. An equally important com- ponent of the job is a determination of strategy for protecting capital in case a forecast proves to be erroneous. Luckily for the investor, such a strategy is, at the moment, readily apparent. We have couched the above forecast in terms of the Dow-Jones Industrial Average on purpose. The Dow is, after all, an average composed of a particular kind of stock — the highgrade, large-capitalization company. Its optimistic configuration,naturally, is duplicated in many of its individual components and a whole host of 'similarAs sues not in the Dow itself. A great many issues of this type have, during 1968, broken out,of long trading ranges which indicate considerably higher levels. A great many others are n,ow giving preliminary indica- cations that they may break out of such ranges in the early par;t of 1969. They thus couple above-average capital appreCiation potential with the limited downside risk inherent in their intrinsic quality and lack of over-exploitation. j The indicated investment policy for 1969, therefore, is quite patently one of aggressiv investment in such higher grade, unexploited issues. Technical studies indicate that such a stance could make 1969 an extremely rewarding year for theinvestor. A VERY MERRY CHRISTMAS TO ALL Dow-Jones Ind. 966.99 Dow-Jones Rails 273.62 AWTamb ANTHONY W. TABELL WALSTON & CO. INC. This market lettl!t IS published for your convenience and informRllon Rnd IS not an offer to sell or a mlleltatlon to buy any secUrities dill ussed Th formation WQ!l, obtained from sources we believe to be reliable.. but we do not guarantee Its l.ccurac' Walston & Co Inc. and its emDioyees may have an mterest lD or pUFcblUle and sell the secuntaes referred to helem. d,r toe In8. ec rs or WN.80t '—..

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Tabell’s Market Letter – December 27, 1968

Tabell’s Market Letter – December 27, 1968

Tabell's Market Letter - December 27, 1968
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W—a-lslntocn.&–C-o-. Members New York Stock Exchange and Other Principal Stock and Commodity Exchange. OVER 100 OFFICES COAST TO COAST AND OVERSEAS FILE TABELL'S MARKET LETTER December 27, 1968 For some years now, we have studied the familiar seasonal tendency of the stock market to stage a year-end rally, and it has been the custom of this letter each December to point out some of the conclusions that can be derived from a study of this phenomenon. We have suggested that an exhaustive study of chart patterns since the Dow-Jones Industrial Average first was computed in 1897 indicated that such a rally, however minuscule, invariably had taken place. A number of interesting facts about the market action of the year end may be noted. (1) – As stated above, an identifiable year-end rally has taken place in every year sTfiCe1897- This rally-often nas-beenof great- magmtudewfhaavances as 'great as -2-8-,-,—-1- having been recorded. It also, on occasion, has continued with only minor interruptions for as long as six months into the new year. However, on other occasions, it has been of only a few days duration, reaching a top extremely early. Thus, in 1960, 1962, and 1968, the rally reached a peak in early January. In 1961, 1963, 1964 and 1967, it continued into February or March. In 1965 and 1966, the rally peak was reached in early February. (2) – There has been a persistent tendency for the rally to begin early in years when the market has been up, and late in years when the market been down. In recent upward years, 1959, 1963 and 1967 are examples, the rally commenced from early in December. In 1962 and 1966, it began late in the year. 1968 is an exception — an up year when the rally began late. (3) – The important thing to watch in connection months of the new year is the low for the previous Decem . . forty-two years out of the past seventy. In ef broken in January and February. Since 1937 it has ii!bee in the early oQ- has been broken in 0 cases, it was n later than mid-March, with the single exception of 1965. Thus, if for the first 2 1/2 months of the year, chan -For-example, 1962 and February 1968. In above, was unusual with the D e r . ab hold above its December 10 orne that this low will not be broken. .- a!tlo1967 it never was broken. 1965, as noted of 850. 19 being broken in June when the Do reached an 10 (4) – In ye n downward two-third e ti and 1968 were exceptio s low has been broken, the subsequent trend has been . 1960, 1962 and 1966, of dourse, are typical cases. 1965 (5) – The rna ude of the rally is an important clue,as to the year's market trend. For example, an advance of 10 or more from the December low has been followed by an upward or neutral market in twenty-nine of the thirty-four years that such an advance has occurred. An advance of less than 100/. from the December low before an identifiable correc ion takes place has been followed by a downward market in'twenty-three of the thirty-six years. In 1961, 1963 and 1964, the year-end rally ,approxiJp.ated 100/0. In 1960, 1962, 1967 and 1968, for example, it was less than this figure. (6) – The length of time in which the rally continues into the new year also is import- ant. For example, in eighteen years the rally continued into March or later. In sixteen of these eighteen years the eventual trend was upward. In 1964, the year-end rally c0.!l!inued into March and in 1961, 1963 and 1967, into February. . In the coming year, therefore, the December low of 945. 11 is an important point to vatch.If the present rally tops out in early and br\eaks this it would be strong mdicatlOn of probable market weakness. A llke mdlcatlOn would be a fallure of the Dow to advance 100/0, or to approximately 1050. On the other hand,1 if a rally continues into Februar or March, or reaches above 1050, an extension of the might be inoicated. A VERY HAPPY Dow-Jones Ind. 952. 51 Dow-Jones Rails 272.36 AND PROSPEROUS NEW ;EAR TO ALLI f ANTHONY w. TABELL! WALSTON & CO. INC. \ AWT-amb \ This market letter is published for your convenience and mformatlOn Rnd IS \1ot an offer to sell or a to buy Rny securities lhscussed The in- formation was obta.lned from 80Urces we beJleve to be reliable, but we do not guarantee (ts accurac). Walston & Co., Inc. and Its officers directors or emDto)'e!a may have an Interest In or pUFchase and sell the securities referred to h e r e m ' 'r I WN801 ,\\

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