. I L e.. W—a-lslntocn.&–C-o-. Members New York Stock Exchqe and Other Principal Stock and Commodity Exchanqes OVER 100 OFFICES COAST TO COAST AND OVEJI;SEAS TABEll'S MARKET lETTER July 19, 1968 A certain J'Jl.l3.laise exists on the current stock market scene — a malaise which is awfully difficult to define in statistical form. Certainly, by no stretch of the imagination was the market's performance over the past week all that bad. The Dow-Jones Industrials lost a total of 8. 48 points in the four days of trading – hardly enough to cause more than a flyspeck on a chart. The Rail average at the week's close is lower than it has been since the end of May, but is, on the other hand, almost 20 above its mid-March levels. The Utilitie meanwhile, have moved sideways since the latter part of last month. What about the averages being unrepresentative of the market Again, the argument is hard to four days of the week, but, still a respectable number of stocks chalked up plus signs on each day. Indeed, Thursday's trading saw 98 new highs for the year achieved – a statistic which, while hardly record-setting, is moderately impressive. Why, then, does the market not seem to be acting the way it should Actually, anum ber of answers to this question present themselves. The first is, of course, that the market is not, in fact, acting as well as it was. Still engraved on our memory is the momentous advance that took place last April and which carried on with only moderated vigor into midJune. Even fresher in most investors' minds is the sharp run-up which carried most of the broad-based indices into new high territory in the early part of July. Compared with these past periods the market is, indeed, not acting well. Another fundamental reason for the malaise is the kind of stock that is moving to- day — both up and down. We are not, personally, divide the market into bl ue chips and glamour issues bu, familiar tendency to hrgextent that such a generalization can be made, it is true that over the brunt of the correction whereas a goodly numbe lue' issues have borne ave actually moved a- head. As good a capsule description as Oil of New Jersey, which traded at 67 in la ep t et is to note that Standard ,re a 80; and Occidental Petroleum, which had been-at 55, sold at 46. n y well-be ,responsible for ..a lar-gepar-t of the uneasiness an old one by now — old enou of today long ago dis 0 e h speculation. Th of academic a . of late. The glamour stock era is fiX\d1he habits of many investors. The active trade s nd went off to seek more interesting vehicles for . igh-quality, moderate-growth companies can only be class of investors whose natural tipple is a headier wine. What of the recent leadership on the part of highgrade issues likely to continue The answe ,we think, generally, yes. We have repeated, ad nauseam, in this space the contention hat such a shift in leadership is, essentially, necessary to a continued favorable investment climate. The highgrade area remains the one great field of relatively unworked ground left in today's stock market. A few thoughts on the type of investment climate such leadership is likely to produce are in order. The one obvious conclusion is that the game of beat the Dow may be more difficult. If indeed, it is the stocks actually in the Dow which are furnishing the momentum for an advance, the Dow will be outperforming the market instead of vice versa — an interesting change from the climate of the past three to four years. It may also produce a climate where the investor must be satisfied with more modest exactions. Highgrade issue may well advance, as many have, but it will be difficult for them to produce the explosive sort of rise that has'characterized the more volatile'leaders of the past. . If, indeed, the trend does continue, investment policy, we think, should concentrate neither on applauding or deploring the fact, but should simply recognize its existence. Ag- gressive investment has been described as going where the action is. If the action is in new and unfamiliar areas, the investor should indeed take his funds there with the utmost dispatch. NOTE Four issues are being removed from our Recommended List this week. We are sug gesting acceptance of profits in Gillette and Revlon, and are removing Allegheny Ludlum Steel and Dentists' Supply due to disappointment with recent technical action. Dow-Jones Ind. 913.92 Dow-Jones Rails 257.80 ANTHONY W. TABELL WALSTON & CO. INC. AWTamb This market letter Is pubhshed for )'our convenience and mformatlon I\nd 1'1 not an ofTer to sell or a Boh('llatlon to buy any securities 'hSCUBSed. The in- formation was obtaIned from sources we believe to be rehable. but we do not guarantee Its nccuracy 'VIt'alston & Co Ine and its ffI d to employees may have an mterest In or purchase and sell the seCUrities refel'l'ed to heleln. . . 0 cers, lrec ra or WNBOl – I

, / 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, July 26, 1968 July 1968 has, so far, proved itself to be a frustrating month. A five-day rally which began the month was aborted, and the next two weeks saw a neutral to downward trend. Last week acceleration on the downside took place, the Dow penetrating its June low on Thursday Thus, the month ends as it started with short-term indicators again in an oversold position. The central fact is that risk appears limited with one set of downside targets in the 870-860 range, and the most pessimistic readings at the moment centering around 850-840. -One factor, of which the press will shortly be reminding us, is that 1968 is a Presi- dential election year. Numerous studies have been made of market action in such years, and it is an indubitable-fact that normal market -In-an- effort to tabulate year action succinctly, we have prepared the following table. It shows, for each year, the President elected and his party; followed by the average price for each month expressed as a percentage of the previous December's close (i. e., 110 means the market was up 10, and 90 means it was down 10). Year President Jan. Feb. Mar. -Apr. May Jupe July Aug. Sept. Oct. Nov. Dec. 1900 McKinley R 101 1(i3' 104 105 100 98 –gs 99 97 100 108 i14 1904 Roosevelt R 102 99 99 101 99 99 103 107 112 118 125 126 1908 Taft 1912 Wilson 1916 Wilson 1920 Harding R 105 100 105 111 117 117 123 126 125 126 134 138 D 100 99 102 106 105 105 106 109 109 109 108 103 D 99 98 97 96 98' 99 98 99 102 105 107 103 R 99 91 97 96 91 89 89 86 89 89 85 77 1924 Coolidge R 103 104 102 100 99 101 1928 Hoover R 99 98 103 11Q 113 1m 1 8 1932 Roosevelt D 103 101 102 76 66 1936 Roosevelt D 102 108 112 112 104 V;\116 110 115 l'W 1 123 131 9 2 88 87 120 126 130 119 132 82 128 1940 Roosevelt D 99 98 97 1944 Roosevelt D 102 Hl1 105 1948 Truman D 97 92 94 98 82 86 87 88 85 ,09, 12 108 111.- 110-115 11 108 104 103 106 100 99 1952 1956 1960 1964 1968 EisenhowerR Kennedy Johnson D 102 97 8 105 106 104 104 105 109 98 1 102 107 106 103 102 100 102 92 96 93 94 92 91 93 97 107 109 108 111 110 111 113 115 112 92 99 101 104 104 The seventeen ye 0 date show an approximate normal distribution. Nine could be considered bull mark ,whereas three (1920, 1932 and 1940) are distinct bear-market years. In five years, the trend was flat, as evidenced by the fact that the December average price was within 5 either way of the previous December'S close. Of even more interest is the general tendency towards a flat trend or moderate weak- ness during the first half of the year. Nine of the 17 years showed little market change through June. It is interesting that 1968, to date, also appears to be taking this kind of shap Indeed, only in the three years which later turned out to be full fledged bear markets was the action in the first half predominantly on the downside. What is interesting at the moment, though, is the definite tendency toward a strong second half. Indeed, as the table shows, in 14 of the 17 years the average price for December was higherthan the ayer,tgeRrice for- June. Even in two of the three bear markets, 1932 and 1940, the market rallied in the second half from the June lows. Furthermore, in one of the three exceptions (1912) the June-Decem bel' difference was minuscule, and the market spent most of the second half in higher territory. Only in 1920 and 1948 were June prices significantly lower than December's. There are, of course, numerous possible rationalizations for the election year tendenc for a weakish first half and a strong second half of the year. One would be the gradual re- moval of uncertainty, as the election becomes closer and the outlook for the next four years becomes clearer. Whatever the reasons, however, the record has some interest as we look forward to the last five months of 1968. Dow-Jones Ind. 888.47 Dow-Jones Rails 250.86 ANTHONY W. TABELL WALSTON & CO. INC. AWTamb This market letter Is publlshed tor your convenience and in(onnatton Rnd Is not an offer to sell or a soliCitation to buy Rny seeurltles diSCUSSed, The Intonnation was obtained from sources we behtle to be rehable. but we do not guarantee its accuracy, Walston & Co.. Inc. and ita officers, directors or emDloyees may have an mtereet in or purcbase and sell the securities referred to helem WN801

Walston Inc. &Co. Memben New Yor! Stock &chang8 and Other Principal Stock and Commodity &chang8s OVER 100 OffiCES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER August 2, 1968 The price erosion which has been the dominant feature of the market since early July continued unabated last week with the Dow-Jones Industrial Average reaching an intra-day low of 865.19 on Friday. As mentioned in last week's letter, there are two sets of possible downside targets for the Dow. The most conservative projections center around the 870-860 level, while the more pessimistic are in the area of 850-840. At the week's low, the Dow wa approaching the upper part of the range suggested above. Paradoxically, a decline to the lower part of the range, i. e. , to 850-840, would be more constructive for the longer term than a rallying tendency from around current levels. A con- would bring most down to the down.sie objectives of their July tops and eliminate the possibility of these tops being broadened so as'to indicate'still lower downside targets. A short-term upswing at the present time, however, would give no definite clue as to the intermediate-term trend until the heavy supply which now exists at 890-920 was finally breached. On the plus Side, it must be noted that all of our short-term indicators are, currently, in abnormally deep oversold territory, and any further substantial declines would put these indicators in a position to give the sort of signal seen at only major turning pOints. The ob- vious conclusion is that regardless of what develops, there will be available abundant attract- ive bu ying opportunities on any move slightly below current levels.' These opportunities will be found in stocks that have reached short-term downside objectives, and likewise in groups that have been resistant to the decline, such as the SAVINGS & LOAN issues. These s!ocks have been among the better market ing not only the apparent peaking out in interest rates, a re lt recent weeks, reflect. tax increase and th expenditure control law, but'also optimism over addition, savings, which have been added to S&L sa . t0 uilding industry. In co sates well below that of -1967, are expected to accelerate later this yeaCorn g. vor the industry's prospects are the improved trend of delinquencies and ssio and reduced interest expenses, as cweJJ.-,!s new,avenues of geranddi'Y'ersification.activ.ity.'I'JVSl of the more attractive, current List, and suitable for long-pull invest ment purposes are FIRST CHARTER I 2 8(- Largest of the publicly-owned savings and loa holding companies approach the 2 billion savings deposit level by late ., .1.9.6.8 or early 1969. ly controls'asso;i.ations with branches primarily in the San Francisco.and Lo California, areas. In addition, it is active in the insurance and real estate broker ields. With residential construction expected to pick up before the end of 1969 and under 0 a sharp revival during the next three to five years, First Charter, with branches located in areas that would experience a good share of the new homes demand, should benefit. Earnings this year are being estimated to rise to around the 1. 65 level, from 1. 42 last year, adjusted for the tax increase. Although the company has seen fit to utilize all earn- ings in the growth of the enterprise, stock dividends have been paid annually for the last 10 years. Technically, First Charter has built an area of considerable support at 32-28, indica- ting limited downside riSk. The price objec tive remains at 46-48 and stock appears to be a buy for investment-oriented accounts. GIBRALTAR FINANCIAL (33) – A medium-sized S&L holding company, Gibraltar managed to better maintain its earnings in recent years than 'ha-stheindustry in general. This trend should a 1sob e continued in the current year reflecting the sharp jump in loans made earlier;,tpis year, which in turn was a result of the fairly liquid position in which GFC entered 1968. With interest rates now easing, or at least having stopped rising, savings deposits are likely to move upward at a more favorable rate, permitting increased funds for and higher earnings .. Compared with 1. 70 a share last year, earnings for 1968 are estimated at between 1. 90 and 2.00, adjusted for the tax surcharge. As in the case of FCF, Gibraltar also pays stock dividends in lieu of cash disbursements. Technically, GFC' s chart reveals a distinctly bullish pattern extending back almost two years. A base of support has been built in the 30-27 area providing support and indicating an '–initial price objective of 44. There is a higher price goal at 56-58. Dow-Jones Ina;- 87-1. … -,. HARRY W. LAUBSCHER for ANTHONY W. TABELL Dow-Jones Rails 246.42 WALSTON & CO. INC. This market letter 18 publlehed (or your convenience and mformatlon nnd is not an offer to sell or a soliCitation to buy any securities lhscu.saed. The In. formation WaR obtained from sources we heheve to be rehnble. but we do nOl its accumc.y. Walston & Co Inc. and its officers, directors or AW'JHWLamOemDIOYee!I m!y have e,p interest m or purchase nnd sell the securities referred to herein. WNBOI

Walston &Co, ..;..,;..;;.;,;;;;.. 1n.c Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OVER 100 OFFICES COAST TO COAST ANO OVERSEAS TABELL'S MARKET LETTER August 9, 1968 The past week's market action, unfortunately, did very little to solve the dilemma sug- gested in our letter of last Friday. The first two days of the week witnessed practically the. first sustained market strength smce early July with the Dow advancing some 5 1/2 points. This was followed by the usual morning firmness following the Wednesday close but, on Thursday afternoon, prices began eroding again and by the end of the day, had given up all their week's gains. Friday's market was a lackluster afflir, and the week thus saw a new intra-day low for the Dow scored at 863. 33 on Friday. Despite the apparently desultory action, short-term oscillators and volume studies . registered a rather clearcut rally signaJ-early'this week.–This Signal-was further reinforced by the fact that at their week's lows, the averages, and a great many individual stocks, had; reached near-term downside targets. Nonetheless, as we suggested last week, it is possible. to read lower near-term targets (i. e. 850-840 on the Dow), and a rally following a decline to this level would be more convincing than one which started at current prices. Here it must be emphasized that stock selection remains the key to overall investment performance. In this connection, it must be noted that the performance stocks of 1967 to date are, to a great extent, not the ones that many mvestors would tend to associate with the word. There is still confusion in the mmds of many who tend to confuse performance with volatility. Volatile issues can and do make excellent trading vehicles if one is agile and clever enough to catch the tops and bottoms of swings. They mayor may not make above average investment performers and in 1968, so far, many have, by and large, not done so. This is strongly suggested by a recent study of the price &fty stocks most widel, held by investment companies (as tabulated by Vickers As 0 ia ranked these fifty stocks, first in terms of performance, as e Change so far in 1968, and then volatility, as measured by the uetween 1968 hlgh and low. The two columns below the twenty best . olatility rank in parenthesis, 2E nthesls. . 20 Best Performers 0 Most Volatile -. 1 Atlantic Richfield (1) !yo Atlantic Richfield (1) 3 Occidental Petr e Control Data (19) 4 Marathon Oi . Ling-Temco (48) 5 Philip Morris (28 Raytheon CompaI)Y (50) 6 Mobil 011 Teledyne (47 7 Royal Dutch! (25) Penn-Central (8) 8 Penn-Central (7) Household Finance (2) 9 Sears Roebuck (36) Honeywell, Inc. (20) 10 Stand. Oil, N. J. (43) Boeing (49) I. 11 Louisiana Land (34) Sperry Rand (46) 12 Chrysler (14) Polaroid Corp (44) 13 Intern'l Bus. Mach. (30) Minn. Mining Mfg. (14) 14 Minn. Mining Mfg. (13) Chrysler (12) 15 Coca-Cola (31) Xerox (36) 16 Merck & Co (20) Northwest Air. (45) 17 Amer. Home Prod. (33) Bristol-Myers. (28) 18 Burroughs (18) Burroughs (18) 19 Control Data (3) Getty Oil (23) 20 Honeywell (9) Kerr-McGee (27 As can be seen, the two lists are quite different. A great many of the best performers in 1968 are well down the list when it comes to volatility. Furthermore, a glance at the left- hand side of the list will show that most of the issues thereon are of relatively high quality. Meanwhile the list of volatile stocks, while it contains the better acting issues, al so contains a large of issues which turned in a performance .. One interesting sta- tlstic is that an equal investment in the ten most volatile lssues on the llst would have Just about broken even. Moreover, if the investor had not been lucky enough to pick Atlantic Rich- field and Occidental Petroleum his volatile issues would have shown an overall 150/0 loss for the first seven months of this year. The performance pendulum in 1968 thus far has quite ob viously swung in the direction of less volatile stocks, and it is important at this stage that m- vestors take note of this fact. ANTHONY W. TABELL Dow–Iones Lnd, WALSTON & CO. INC. D market letl;(!r Is (or your convenience and mformatlon nnd IS not an offel to sell or a soliCitatIon to buy an)' securities Ihscussed The m. formation was obtl\lned from lIOurces we believe to be reliable. but we do not jfURrantee Its accurac Walston & Co Inc and Its officers, directors or t!! …..eea may have an mterellt an or JuFchase and sell the securltu's referred to helem. A'.' !'amb WN'01

——-.——— W—a-l(sntocn.-&–C-o-. Members New York Stock Exchange and Other Principal Stock and Commodity Exchange, OVER 100 OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER August 16, 1968 Over the past few months, the course of interest rates has been a cause of much dis- cussion in the investment community. As most readers of the financial news are aware, the price of money was, in the early part of 1968, at its highest level since the early 1920's. New issue bonds of the highest credit rating were being offered to yield in excess of 7; govern- ments were at the highest levels in years, and a tax-free return of better than 5 in ably good municipal bonds was available. Building activity was being choked by astronomical- ly high mortgage rates, and the prime lending rate of major banks was at a record 6 1/2. This stringency in credit markets, the conventional wisdom informed us, was being imposed by the in.the absence.2f a In re- cent months, this rather dismal picture has changed dramatically. Bond prices have sustained one of their best recoveries in recent years, with the Dow-Jones 40-Bond Average increasing over 2 paints to its best level of the year. The tax increase, we are told, is going to lift from the shoulders of the Federal Reserve Board the burden of restraining inflation and those august gentlemen will, forthwith, be in a position to make credit more readily available at more reasonable prices. This activity has seen its reflection, to some degree, in the equity markets where, for the most part, recent leaders have been stocks such as building, finance, savings and loans and utility issues – all of which can be expected to benefit in one way or ., another from a lower cost of money. While there exist widely divergent opinions as to the , future course of stock prices, there appears to be a universal agreement that the bedraggled bond market may, at last, be headed for better times. Let us, for a moment, assume that this may be wonder just what effect better prices for senior securities i worthwhile, then, to e common stocks. ThE question may be answered in a number of ways. eh e out in the past, in this letter, there appears to be no discernible Ion w.2 r between bond and stock prices. Indeed, the two markets over t h s tc y to have moved in entirely independent cycles which are only rarely ta e . . suggested before, the bond . -market, as best-we' can'see'from , with a periodicity of some Thus, the last time we saw interest rates at current high levels wa i that point on bonds enjoyed a fairly con- sistent bull run almost steadil a 1946. Since that time the price of bonds has I s of this year. It is worth noting, parenthetically, l that the bond decline e g a n for some 22 years now, and it is fascinating to specu- late as to whether the ce rn may not be the beginning of another quarter century of de- clining interest rates. s discussion, however,we shall leave for another place. On a shorter-term basis there does, indeed, appear to be a discernible relationship between stock and bond prices,and if it is true that the bond market has, in fact, reached an in- termediate-term bottom, the conclusion, historically, is unequivocally bullish for stocks. In the past 20 years, within the context of the longer-term downtrend, there have been six major upswings in bond prices, everyone of which has unfailingly been accompanied by a better stoc. market. Also, without exception, the upward trend in stocks has perSisted well beyond the bond market peak, continuing for periods ranging from 7 months up to 2 years. The following table details the bond bull markets of the post-war era, and the course of the stock market at the same time. Date of Bond Market Low Dec. 1947 June, 1953 Sept. 1957 Jan. 1960 Oct. 1961 Sept. 1966 Date of Bond Mkt. High Jan. 1951 April, 1954 June, 1958 Mar. 1961 Feb. 1965 Feb. 1967 Advance in Stocks Over Period 36.2 19.0 4.8 8. 7 28.5 8.4 Date of Subsequent High in Stk. Jan. 1953 April, 1956 Jan. 1960 Nov. 1961 Feb. 1966 Sept. 1967 Mos. From Advance Bond Peak , in Stocks to to Stk. Peak Peak 24 62.0 24 95. 0 19 50.8 8 19. 1 12 42.4 7 22.8 Whether the recent low in bond prices was, in fact, an important bottom, is a question yet to be resolved. If, however, this was the case, the implications are distinctly encouraging for equities. ANTHONY W TABELL Dow-Jones Ind. 885. 89 WALSTON & CO. INC. Dow-Jones Rails 250.45 AWTamb This market letter Is pubh!hed for your convemence find informatIOn nnd Is not nn offer to sell or a soliCitation to buy Rny securatles diSCUSsed. The In formatIOn WRS obtained from sources 'ftC believe to be rehable, hut we do not guarantee its lccurac). Walston & Co, Inc. and Its officers, directors or employeeB ma)' have I1n lllterest in or pUl'chftBe and sell the IfeCurltlell referred to herem. WN801 ,L – . . . .

r Walston &Co, —,;;….; Inc. —.;;… Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OVER 100 OFFICES COAST TO COAST AND OVERSEAS lABEll'S MARKET lETTER August 23, 1968 At the moment, little has taken place from a technical point of view to clarify the somewhat muddied intermediate-term picture which the market has presented since mid- Summer. This problem can perhaps be clarified by recapitulating recent market history. The dominant feature of 1968, so far, has been the rally which began on April Fool's Day and carried most market indicators sharply upward. Both the Dow and Standard & Poor' Averages moved to 1968 highs in early May — the Dow advanCing from817. 61 to 935.68, and the Standard & Poor's going from 86.64 to 100.19. Subsequent to this the Dow failed to bettEr its May peak and, through mid-July, held in a trading range bounded by that high and, roughly, 896 on the downside. In mid-July it broke out of this range, Jeaching.a.low of 863.33 in early August, and since then has rallied into the supply area created by the origina top. The action of the broader Standard & Poor's 500-Stock Index has, in line with the di- vergence of recent years, been quite different. It posted successive new peaks in June and in July at 103.67. Also, its recent bottom failed to violate the May low, whereas the Dow moved sharply below that figure. Moreover, the July high on the broader index constituted a all-time peak while the Dow, at its 1968 top, was well below previous highs made in Septem- ber 1967 and February 1966. The central and unresolved question at the moment is, of course, whether the aver- ages will continue the downswing which began in July, or will mount an assault on their 1968 peaks. For various reasons we do not think such an assault is imminent at the moment. The base formed in the past two weeks is insufficient to current levels. There is also, in the averages and individ s target much above f( ood deal of overhead supply to be reckoned with. It would appear, a e to move to new highs must needs be deferred until such time as a broader ha chance to form. This process will require both time and price A base of this nature could form in 0 0 0 w It could take the shape of a con- solidation aLor.just st low.s…of….863.L33on the Dow and – . 95.79 on the Standard & involve a return to 850-840 on the Dow, and a concomitan e & Poor's Index in order to complete the formation. s d si!t , ioned as a possibility over the past month in this letter, is hardly I g t u erious concern. We have repeatedly stated that we se little evidence of an r e long-term uptrend from the 1966 lows, and we continue to maintain a construc 've ltion toward the general market. All of the pre' discussion of the future course of the averages, unfortunately, tends to obscure what is probably the single most important fact to be gleaned from technical analysis of the stock market at this time. That is the clearcut emergence of new leadership. The suspicion that such a development might take place was voiced in this letter at the be- ginning of the year, but it could, at that early stage, be regarded as nothing more than a suspicion. Since that time it has unfolded into a clearcut pattern. The upside leaders for 196 have been such groups as Savings & Loans, Finance Companies, Builders, Insurance, Ce- ments, Vending Machines, Oils, Rubbers, and Papers. The emergence of these issues has been accompanied by a fading of such former favorites as Electronics, Metallurgy, Publish- ing, Aerospace, and some of the more marginal Office Equipment companies. The pattern, we suspect, has maJor implications and is unlikely to be reversed over the foreseeable future. Stocks which have reached their long-term upside objectives once they begin a consolidation phase, do not, generally, emerge from that phase without the pass age of a substantial period of time. A great many market leaders of the 1965-67 period fall into this category. Meanwhile, we suspect that we will see continued above-average relative action on the part of the groups mentioned above, along with possible emergence of new, hitherto dormant,. groups whose identity can only now be guessed at. Last year's portfolio, in other words, is likely to prove as unsatisfactory in the final months of 1968 as it has been so far this year. ANTHONY W. TABELL Dow-Jones Ind. 892.34 WALSTON & CO. INC. Dow-Jones Rails 251. 11 AWT-amb This market letter Is published for your convenience and informat(1n And IS not an offer to sell or a '1ohcltation to buy an securItIes ulSCussed. The In formation WIlS obtamed from sources We helleve to be rehable. but we do not guarantee Its accuracy Wruston &. Co., Inc. and Its officers. dIrectors or employeca may have an Intereat In or purchase and sell the securities referred to herem WN801 ,- iii ;;u

Walston &Co. Inc Members New York Stock Exchange and Other Principal Stock and Commodity Exchange. OVER 100 OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER August 30, 1968 Now that the suspense has lifted and the candidates of both major political parties are known, perhaps the market can begin to move out of its recent lethargic state. Current tech- nical data would tend to weigh in favor of a limited corrective movement, compensating for the recent rally. As mentioned in previous issues of this letter, a return to the broader trad ing range around the mid 800' s would be considered healthy for the future course of the market, adjusting for many of the excesses of recent weeks. This correction should make available more favorable buying levels in such favored groups as, savings and loans, financials, cements and construction stocks, oils, drugs and home furnishings, all of which are expected to be in the forefront of an advancing market later this year. One issue we feel to be of C –' – – — .timely interest is discussed below. – REXALL DRUG & CHEMICAL COMPANY Current Price 38 7/8 With chemical and drug stocks starting to re- Current DIvidend 0. 30 Stk. cover from their unfavorable performance of the Current Yield 0.7 last year or so, investors again are directing Long Term Debt 80,326,000 their attentions to individual issues within these 2 Cum Conv. Pfd. Stk. 2,667, 529 shs. two groups that hold the potential of attractive fu- Common Stock 14,451,617 Shs. ture growth. Rexall Drug & Chemical occupies a Sales-1968 Est. Sales-1967 570,000,000 531,600,000 posItion of importance in both industrial areas and would appear to offer the long-term investor an opportunity for capital appreciation and growth in Earn. Per Sh. 1968-Est. 1.80-1.85.Income. Earn. Per Sh. 1967 Mkt. Range 1967-'68 411. 38/68pro2f1or1m/2a Over the la t n e s9 Rexall's . pe common e n a nearly flve-fold, equal to a 17 compound annual growth rate. Much pr as been due to the cor- porate philosophy of successfully embracing new opphMitie by providing a climate in which these enterprises could more agement.dedicated 1968 started out to be a e grow. With the company man- 10 , exall's.future potential seems br. ear!f,ar the company. First quarter results were adversely affected by a earlier level. This to e 1968 earnings bein i c i earnings almost 30 froni the yearsinon of the surtax is expected to result in full r the 1967 result of 1. 86, pro forma. Management, however, feels that ' a r gs can grow at an annual rate of between 10 and 15 and that a return to this ap rox e area of growth is likely to characterize next year's results. In the meantime, share e reflecting the optimism being voiced for the future of the company, and the disadva ages brought about by the glass strike and the surtax probably have been taken into consideration in the current pricing of the issue, especially since most of these disadvantages are considered of a nature. Rexall certainly can be considered a type of conglomerate. Its activities fall into seven major groupings Petrochemicals, packaging, construction, plastics processing, ethical drugs, cosmetics and housewares, and retail stores. The recent acquisition of The West Bend Company, an old line housewares producer, will considerably broaden REX's product line and, if its sales are included in the 1968 total, they could lift REX revenues well above the 600 million level. Recent price increase made in various areas, such as in beer bottles and several grades of polypropylene will help 1969 compare favorably with 1968 During the last 10 years, stock dividends have supplemented the conservative cash payout in nine years. With the company fully aware that its cash can do all stockholders mor good by being largely retained and reinvested in the growth of the overall concern, the dis- tribution of stock dividends is expected to be continued. Technically, Rexall has constructed a base of considerable extent in the 36 to 32 area extending back approximately one year. This base not only indicates good support in the mid 30s region, but also suggests an initial price objective in the mid-40s, followed by a higher price goal in the mid to upper 50s. For the favorable fundamental and technical indications, we are adding Rexall Drug & Chemical to the Price Appreciation Section of our Recommende List as a buy candidate for investment clients. Dow-Jones Ind. 896.01 Dow-Jones Rails 251. 11 HARRY W. LAUBSCHER for ANTHONY W. TABELL WALSTON & CO. INC. HWL'at This market letter ill pl.lbhshed for your convenumee and l'lformRtlon nnd IS not an offer to sell or !\ soliCitation to buy an' M!('untlel'l Ihscussoo The tn. format/on was obtained from sources we helleve to be but we do not guarantee its Wnlston & Co. Inc. and Its officers directors or emDloyeel'l may have an mtereBt In or pUFchase I\nd set! the secuntLes referred to herem WNBOl

W—d-lsItnocn.&–C-o-. Membe.. New York Stock Exchange and Other Principal Stock and Commodity Exchange. OYER 100 OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER September 6, 1968 Despite smog, airport slowdowns and variable weather, Cupid is still flying. The first five months of this year revealed a rise of,9 in marriages and the total number of couples before the altar by year-end could approximate two million, the highest number since 1946 which benefited from the ending of World War n. This increase in the marriage rate plus the easier financing that is antiCipated for the home mortgage market is expected to result in a sharp increase in new residential construction over the coming year. As a result of the token trim in the discount rate, small cuts in mortgage rates already have ap- peared and by spring, further reductions are expected throughout the country. As an indi- cation of what could be.in starts in July even before the discount rate cut, were running 12 ahead of the starts for July 1967. The value of total private residential construction set a record in the second quarter of this year at an annual rate of 27.5 billion, up about 25 from the year-earlier period. This flow of funds into the construction industry augurs well for suppliers of building materials, which in turn could be further reflected in favorable market prospects in corning months. One such issue currently favored is discussed below. UNITED STATES GYPSUM COMPANY Current Price Current Dividend Current Yield Long Term Debt 87 7/8 3.00 3.4 21,424,000 By 1972 the number of persons in the U. S. between the ages of 20 and 29 will be increased by six million. These are people who will want an apartment of their own or who are in the family 1. 80 Conv. Pfd. Stk. Common Stock Sales-1968-Est. 1,629,075 shs. formation 8,162,000 shs. demand for new 400,000, 000 i n as ' n Sales-1967 372 800 000 cupied by r il Earn. Per Sh. 1968-Est. 3.90 4. 00 e of m substantial e. d'!!'d to this will be the e a dwellings !o be .oc .S..Gypsum.is gomg enefiCiarteS of thlS overall ., –3-. 65- Mkt. Range-1967-1968 89 – 56 or y years, U. Gypsum ranked -a-s1t.I.l-e of the building industry, but the lack- performance of recent years has somewhat tarnished it 1 ull market top of 120 in 1959, USG shares plum- meted to 43 in 196 0 il subsequently have rebounded 1000/0 from its 1966 low. the stock's performance this year is consider- ate for building stocks in general and the likelihood that 1968 is to show a turnaro the former earnings downtrend. Compared wi h per share earnings of 3.65 last year, the low point of the last dec- ade, results this year are expected to rise to around' the 3.90 to 4 a share level, despite the 10 surtax. In view of the improving prospects now being noted for the residential con- struction industry, the outlook for next year also is considered favorable. U. S. Gypsum is the leading producer of gypsum products, including wallboard, roo ing and siding. In addition, its product line includes paints, refractories, high-calcium lime for the steel and chemical industries, mica for industrial purposes, felt items, plastic piping, and decorative plastic panels. Because such a large percentage of its sales depends on new housing, USG has been especially vulnerable in the past to slumps in the housing in- dustry. However, recent.acquisitions and a broadening oJ base have helped off- set this problem. On the other hand, the company also responds more favorably than most 0 its competitors when housing is on the uptrend as is the case at present. From the technical view, U. S. Gypsum has formed a base in the 80-84 area that suggests a price objective at the 102-105 level. There is considerable downside support in the 80-75 region. Because of its attractive fundamental and technical pOSitions, we are add- ing U. S. Gypsum to the Quality and Long Term Growth section of our Recommended List as a buy at prevailing market levels. Dow-Jones Ind. Dow-Jones Rails HWLat 921. 25 255.65 HARRY W. LAUBSCHER for ANTHONY W. TABEL WALSTON & CO. INC. ThIs market letter Is published for your convenIence and mfOTTllRtlon nnd is not an offer to sell or a sOhcltatOn to buy fI.y securities ulscussed. The In- formation was obtained from sources we believe to be reliable. but we do not guarantee Its accurac) Walston & Co.. Inc. and 115 officers, dlrt!Ctors or emDtoyeeB mil) have an Interest In or pUFchase and Bell the referred l(I herein. WN801

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 September 13, 1968 Over the past year and a half, we are afraid, this letter has risked boring its readership by recurrent references to a shift in leadership in the equity market. Throughout 1967, we referred to the possibilities of such an event, admitting, however, the lack of evidence that it was actually taking place. By the time it was required to issue a 1968 forecast in December and January, the signs that the long-heralded change was indeed occurring were manifest to a close follower of technical action. As 1968 wore on, they became even more obvieus and were duly noted. 15y are parade c ef 1965-67 in the Electrenics, Office Equipment, and high-science areas. One by ene,the fermer faverites, have drepped frem the ranks ef market leaders ,and hitherte-quiescent greups have emerged to. take their place. A netable example ef the sert ef new leadership that has emerged is, ef ceurse, these stecks asseciated with residential building. As recently as early 1968, the average building steck was a candidate fer nething except, pessibly, a dullness prize. Earnings had been flat and mest issues had been helding in trading ranges fer upward ef ten years. This picture has changed to. the extent that a recent cempilatien ef the fifty best-perferming stecks en the New Yerk and American Steck Exchanges includes nineteen issues asseciated in ene way er anether with residential building; seven general Building stecks, feur Cements, six Savings & Leans and two. Real i\\Estate cempanies. All this, we suspect, is semething mere thm a p s in rem a technical peint ef view, all the greups mentiened abeve e eve current levels. In additien, the building cycle, as is wen knewn, or less independently of the overall economy, and there is as turned rather sharply up- . at' s i n c e the first of the year — a growth wh ce at a rate financial history. importance of this statistic, but we, for ene, feel that it has i or n' . at' n not only for building activity, but for the over- all level ef the ec n e sibly, the stock market as well. The leaders ift' ot confined to the building field, and the signs of awakening in a number of hither mant industry groups are quite apparent. Prominent among these would be the R ers, Chemicals and International Oils. The renaissance of the blue-chip,! in short, may be upon us, and it is well to ask how far it can go. It is worth noting in this context that the price! earnings ratio. on the Dow-Jones Industrial Average — as a measure as any of investor confidence in high- grade companies — is still at relativelylow levels historically. At present prices, the Dow is around 16 times earnings fer the twelve months of 55. 80, and a lower mul- tiple of this year's estimate of 57 – 58.\ It is worth noting that in 1961 the Dow sold 'for 24 times earnings. A return to such a vcUuation could cause a 50 rise over current j prices, without any improvement in earnings at all. Actually, the latter part of the premis is an unlikely onll' We think tilat the supply (igures a,bo,e the likelihood of a reasonable earnings expanSien into 1969-1970. They also indicate the ,. possible presence of the kind of demand needed to fuel a protracted rise in high capitaliza- tion stecks. . \ All of the above, of course, makes; no judgment as to the near-term course of the steck market, and in this area a number questions need yet to be resolved. It dees, however, suggest that, over a period of ti!pe, the patient holder of quality stocks — long the forgotten man in the equity market — inay finally receive his long-awaited reward. 1 \ ANTHONY W. TABELL Dow-Jones Ind. 917.21 WALSTON & CO. INC. Dow-Jones Rails 256.08 AWTamb Thill mtt.rket letter Ie published ('Of Your convenience and information ftnd is not an ofter to sell or a solit'!ltation to buy any securities duscussed Tbe in formation was obtained from sources we beheve to be reliable, but we do not guarantee its .accuracy Wwston & Co.. Inc. and Its officers. dIrectors or employees mil)' have an interest in or pUFcbase and &ell the SeCUl'itles referred to herein. WN801

Walston &Co. —–Inc. …,.—- Members New York Stock Exchenge and Other Principal Stock and Commodity Exchange. O …. ER 100 OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER September 20, 1968 The market continued its surprising show of strength last week. Although Thursday and Friday saw a sideways trend in the averages, on both days the Dow-Jones Industrials were pennies away from both a closing and intra-day high for the year. The S&P 500, un- characteristically lagging behind the Dow, was a point away from a newall-time high. The word surprising here is used advisedly, for the rally which has characterized the latter part of August and early September could hardly be called usual action from either a technical or fundamental point of view. This is not to play the futile game of fighting the tape. It is simply meant to put the advance in perspective since an understanding of the reasons behind it will be critical for the future of the market from here on out. — From a technical point of view;-first of ail, most of the popular averages had, at– their lows of early August, reached the upper part of the downside ranges suggested by the distributional top formed in June-July. For example, the most conservative downside target on the Dow was 870, and an intra-day low of 863.33 was reached. What was sur!,rising was the rapidity of the ensuing rise. Within 17 days after reaching its low, the Dow had pushed through the heavy overhead supply at 890-920 and found itself close to new high territory. All this took pl.t.e without, in technical parlance, a base having been formed for the advance. Similar moves were recorded on the New York Stock Exchange and Standard & Poor's indices Of course, there are various interpretations of the market's strEngth. The pessimis tic one would be that a distributional top formation is simply being broadened and that the ultimate implication of this move back back into the supply area is simply lower prices at a later date. This may well turn out to be the case, but normally be the first clues to this sort of potential weakne studies, which woul it as yet. Mean- while, it should be recalled that all of this is taking long-term potential is for considerably higher . i an 'ronment where the rthe ined strength at this point would strongly indicate the possibility m0 High ground was to take place -, .us rather than later. 0 rre ,what will the market be telling – e – r MIl gtlie economy stock market , it is t market tends to.lead the economy rather than the other way Standard & Poor' The market s' e a . n Bureau of Economic Research utilizes the indicator to forecast industrial production and GNP. rds, a barometer rather than a thermometer and this, indeed, is a fact wor ke R' n mind in.light of the current conventional wisdom regard- ing the economic outloo The great m rity of economic forecasts issued up until recently have spent a good deal of time worrying about the effects of the tax increase. This increase, we are told, was, indeed, the proper medicine prescribed by the new economics, but, due to the political delay in its enactment, came too.late to perform its intended task of halting inflation and may even accelerate a business slowdown which, as of mid-1968, was already occurring. For this and other reasons, it is assumed, corporate prOfits in the second half of 1968 and early 1969 ma, well be disappointing when compared with levels of a year ago. The stock market, however, seems to be telling a different story and, as noted above the market's record as a forecaster is a fairly good one. With admirable precision, major stock market bottoms have led turns in the economy in post-war years. There have, since InWorld War II, been four periods which the National Bureau has defined as receSSion — f948-49,' i953-54;- 1957-58 and 1960-61. the first of these cases, the stock market bottom- ed out five months before the FRB Index of industrial production, in the second, eight months before, and in the last two, six months before. In the mini-recession of 1967, the stock market bottom was reached in October 1966, while the industrial production index did not tur up until May of the following year. Thus, continued strength in the stock market from these ,. levels would belie the standard forecast of a weaker economy over the next six months or, at the very least, indicate that the market was looking ahead toward an upturn in the early par of 1969. As we noted in this letter last week, if one concentrates one's attention on recent monetary policy rather than on fiscal policy, it is possible to argue that monetary expansion will override the effects of the tax increase over the next two to three quarters. This, at least; seems to be the message of the stock market at the present time, and we would prefer not to ignore it. ANTHONY W. TABELL Dow-Jones Ind. 924.42 Dow-Jones Rails 261. 13 WALSTON & CO INC .. Thill market letter ill published tor your convenience and Informfltlon Rnd Is not an oft'.,.r to sell or a sollt'!ltation to buy any secUrities lhscusaed. The In. formation was obtained from sources we believe to be reliable. hut we do not guarantee Its accuracy. Walston & Co., Inc. and its officen. directors or m.!Itoyeee may have an Interest In or pUFcbase Bnd sell the referred to hereln. AW'l amb WN.801 i