Viewing Month: March 1969

Tabell’s Market Letter – March 07, 1969

Tabell’s Market Letter – March 07, 1969

Tabell's Market Letter - March 07, 1969
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r-I Walston &- Co. lnc' – – – – – Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OVER 100 OFFICES COAST TO COAST AND OVERSEAS TAB Ell'S MARKET lETTER March 7, 1969 Last week saw more of the wild gyrations typical of periods of market uncertainty. The week began with an extension of the February recovery, the Dow-Jones Industrials tacking on some 17 points in the first three trading seSSlOns. This was followed in Thursday' trading by an abrupt reversal and an almost-10-point loss which was extended another 9 points in early trading omF.rlda,y;rITlienj(Ctypical late- Friday strength set in, and most of the drop was recovered in the final hour of trading. The whole thing added up to a gain of some 6 points on the week. The week's wide swings were typical of an atmosphere in which many investors are -trying to decisions to' protectcapitalin the -Actually, a hmelike the — present is not a good time for hasty decislOn-making. The really tough decisions about the future of the market do not need to be made now, but at some time within the next few weeks. Let's see if we can't clarify this statement a little bit. The market, at last week's low, and again at the lows of this week, was notably oversold. (The word oversold has been accused of being an imprecise term used by technicians for obfuscation. We mean it here in a precise and measurable sense — In terms of the actual number of declining stocks and percentage change in the averages compared with prevlOus market bottoms). The over- sold condition was, in fact, so deep that some sort of a rally from the lows could and can be forecast with a relatively high degree of probability. At the same time, the immediate down side risk from the present level appears to be slight. It is ') 1 this next rally that the really hard decisions will have to be made, for it is the shape of this future upswing which will determine whether our conception of the long range has, in fact, been correct. .'\,)J To recapitulate, we have undergone, since b r, ree-phase decline — not at all an uncommon pattern. This decline a dr December and the first p of January, a rather tepid upswing into recent selloff to the lows of a T,he p,!st1,hree,mOl!tDs al c , Ra,ttern traced out in the past three years. T t r 'ou ccasions were, (1) 1966, with a de- cline in February-March, a a drop in April-May, and (2) 1967-68 when the market decline betw and November, rallied into early January and dropped off to a low i af aths of these two periods were, of course, quite different. The 19 6 ed a major buying opportunity and the market spent most of the last thre ter. 1968 in a dynamic upswing. The 1966 decline was, of course, followed by th v us liquidating wave of July-August. Looked at,fro e vantage point of the respective lows, i. e., May 1966, March 196 and February 1969, there is very little technical difference between the three patterns. The distinction, in the first two cases, came on the subsequent rise. In 1966, a tepid rally on low volume in May and June failed to provide any strong recovery evidence. By contrast, the sharp upswing of April 1968 was a distinct reversal pattern. It is to the forthcoming rally we must look for clue s as to how the 1969 pattern will shape up. We confess again our own bias in that we think the present looks a great deal more like 1968 than it does like 1966. We will, nonetheless, allow our thinking to be dictated by future events as they unfold. Meanwhile, the market weakness, as weakness always does, provides an excellent testing ground for the strength of individual stocks and industry groups. The present is no exception and a great many issues display what must be considered to be exceptional strength in the face of the general market selloff. There is common ground shared by many of these issues in that, by and large, they appear to be statistically cheap and to possess inflation hedge characteristics in the form of asset values and/or natural resources holdings Such groups showing above average action of late include Aluminums, Coals, Natural Gas, Fire and Ca.sualty Insurance, Oils, Paper, and Tobaccos. Other groups showing exceptional strength include Airlines, Banks, Farm Machinery, Motor Freight, Rails, Rubbers and Utilities. Purchase of issues of this type a.t current levels would seem to be the best possible protection against market vicissitudes. t Dow-Jones Ind. 911. 18 Dow-Jones Rails 246. 26 ANTHONY W. TABELL WALSTON & CO. INC. AWTamb Thill market letter is p'Ubllshed for your convenumee nnd mforml!.t.lon ll.11d Is not an offer to sell or a sollcLtation to buy an)' secur.tlefl thscussed. The information was obtained from sources We betu!ve to be nhable. but we do not guarantee Its accurac). Walston & Co. Inc. and its officers. directors or employees may have an Interest in or purchase and sell the secuntle5 referred to hel ein WN801 ,, w

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Tabell’s Market Letter – March 14, 1969

Tabell’s Market Letter – March 14, 1969

Tabell's Market Letter - March 14, 1969
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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 March 14, 1969 Be not the first by whom the new are tried, Nor yet the last to lay the old aside. Alexander Pope Essay on Criticism It is, let us face it, a brand new ball game. For some time now, ever since October 1966 to be exact, there have been certain distinct charasteristics of the investment environment. A great many of these character- istics have changed, and they-have changed -rapidly. – Oneortlie' market advance of the past two years had been, until recently, the paucity of stocks in dis- tinctly weak'technical positions. To oversimplify, the market consisted of a number of stocks thatwere moving up, a number moving sideways, and practically none which were moving do,);n. The weakness of the latter part of 1968 and early 1969 has changed this picture There are now more stocks in confirmed downtrends than has been the case jn some time. H,8.ving unburdened ourselves of this observation, we must now face the question that will inevitably be asked, Is it a bear market The answer is we doubt it. i ,To a great many investors, the past six months one of the worst sort. The carnage that has been wrought t 0 a bear market, and rOolios heavily in- ves!ed in, say, has been fully equal Wtthe i s i' upon holders of television stocks in 1966, or the transistor t moment, the num- ber of stocks down 30, 40 and 50 from highs mad/l…oA.y 1 ear is typical of the advanced stages of a major downswing. Yet, e, in terms of the averages, it is fact trials are off some 8 1/2 from a ft e a.RPened. The , sago — hardly major weakness by anybody's standards. e the number of major downtrends has substantially increased, e a ' f' u s still appear to have their long-term up- trends intact and, i e 1 c Just be ginning. Now, Ishly inclined who will admit that a great many stocks have held up well, but will po' ut, and correctly, that, in the final phase of a decline, the good is taken down alo with the bad. We are inclined to doubt that this will be the case in this instance, however. We think that what we are seeing at the moment is no more than the final verification of a phenomenon remarked by this letter repeatedly over the past year — – the shift in leadership to higher-quality, relatively unexploited issues. It is all too painfully clear where the downswing of the past few months has been concentrated. It is centered around the speculative leaders of the 1966-67 upswing. It has been a particularly poor time to have overstayed the market in last year's winners, and we suspect this situation will get worse before it gets better. The solution to the investor's dilemma at.this stage of the market is not cash but a rigorous upgrading of portfoliOS into the highgrade issues neglected in the 1966-67 speculative upsurge which are now just lately coming into technical prominence. We suspect that this policy will payoff, not only in terms of capital protection, but before too much time has elapsed, in the form of handsome capital gains. , Dow-Jones Ind. 904.28 Dow-Jones Rails 241. 92 ANTHONY W. TABELL WALSTON & CO. INC. AWTamb Thill market letter is published for your convenience and lllfOlmntlOn nnd IS not an offer to sell or a soliCitation to hu) Rny .securities uISCUSSed. The in- formation was obtatned.from 8Ourc('o; we believe to be rehable. but we do not Its !ccurnc)', Walston & Co., Inc. and Ita officers. directors or emDloyees may have an mtere!lt In or lJuFehase and sell the securitles referred to helem. WN.Bll –…

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Tabell’s Market Letter – March 21, 1969

Tabell’s Market Letter – March 21, 1969

Tabell's Market Letter - March 21, 1969
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r '. Walston &Co. Members New York Stock Exchange / and Other Principal Stock and Commodity Exchange. OVER 100 OFFICES COAST TO COAST AND OVERSEAS TABELL'S LETTER March 21, 1969 Last week, 's market action did little to resolve the dilemma which has been facing in- vestors over the past month or so. A smart rally at mid-week took the Dow-Jones Industrial Average to an intra-day high of 926. 16 on Friday, just under the 929.89 peak of early March. The Index then backed away in desultory action late Friday. The Dow has thus continued for almost a month in a sidewaysA;t;ladinglrange bounded by rough intra-day limits between 895 and 930. Indecisive action at the moment is hardly unexpected. The market is approaching a critical juncture, and the events of the next thirty days or so will probably contribute, in a m19a6j9o.r way, to solving the dilemm(l. o(the,,-m. ar-j-et' s di-r.e–c-t-i-o..n for most of the- rema-i'nd–e-r–o-f'– To illustrate this, let us try to separate the action of the Dow-Jones Industrial Aver- age over the past 2 1/2 years into Major, Intermediate and Minor trends. (Those with a chart book handy may want to follow the discussion by reference to a chart of the Dow). First of all, the long-term trend. This can be defined by an uptrend channel containing the Octobe 1966 low of 735.74, and the December 1968 high of 994.65. The market is still within the confines of this channel, the lower limit of which is presently somewhere around the 880 level. Next, the intermediate trend. Until recently, this trend was defined by a steeper up- trend line running from the March 1968 low of 817.61 through the December high. This trend channel was decisively penetrated on the downside in early January. At the moment, there- fore, the intermediate-term course of the market can be regarded as, at best, uncertain. Lastly, the short-term trend. This is defined, obviously downswing between the December high and the February 1969 low of s is still in effect with a current upper confidence limit around 935. To summarize then — the long-term trend re(lYl up, ough close to the lower part of its trend channel; the 1 rtain; the short-term trend is down. Thus,the ba.sisfQJ' the Let us outline the two POSSibi be.reSQlyed. – II l01fl ution. On tpe bullish side, a move to the 935-940 level would do of all, destroy the short-term down- trend which has contain e for ht-'ee months, and it WOuld, secondly, remove, at least for the time b i a 'b of destroying the long-term uptrend by returning the Dow to the middle t n annel. On the other hand, a decisive move to below, say, the 880 level, would short-term downtrend to intermedi8te-term proportions and, more important, call i uestion the whole structure of the basic longer-term upswing channel that has prev . ed ever since the end of 1966. As can be gathered from the discuss- ion above, these forces are now converging and a resolution is likely within a relatively short period of time. Now, this discussion has been confined to the Dow-Jones Industrial Average whiCh, of course, is just one indicator of what the market overall is doing. At the moment, as we have indicated in recent issues of this letter, it is almost impossible to describe the whole marke by the action of a single index. Selectivity is now vicious. Many stocks are in clearcut long term downtrends, and a great many others, despite the poor action of the market, are pre- sently in clearcut uptrends on both a long-term and intermediate-term basis. There is, for example, nothing in the discussion above that will be very illuminating in describing the average paper, oil, aluminum orsteel stock. Mo'st of these issues are,in clearcut major an intermediate uptrend channels, and in some cases (new highs were made in a number of paper issues last week) the short-term trends can be defined as upward as well. We, therefore, continue to feel that the investor'S most SUitable protection at this stage lies in upgrading portfolios so that they consist, almost exclusively, of quality issues such as the ones suggested above, and others on our Recommended List. In the event the current impasse is resolved on the upside — as we think it is likely to be — it is in those stocks that have resisted the decline that the future upside action will be centered. If the downtrend moves into something more dangerous than we have seen so far, these issues will, it is true, be affected, but the decline is likely to be less steep and the rebound all the stronger. Dow-Jones Ind. 920.00 Dow-Jones Rails 243.97 ANTHONY W. TABELL WALSTON & CO. INC. This market letter IS pubhshed for your convenience and mfOrm1l.tlon and IS not an ofTt.r ,to sell or It '1011clt.ntlon to /lny securIties dl;cussed The in- formation was ob4uned from sources we belu've to be rehnl)le, but …. e do not guarantee Its necura!'). ,'alston t.. Co, Jne and Its offieers. hr('(tor; or AWTamb may have an Interest In or purchase and the se('unt.e; refured to herem, WN.!

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Tabell’s Market Letter – March 28, 1969

Tabell’s Market Letter – March 28, 1969

Tabell's Market Letter - March 28, 1969
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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 March 28, 1969 The fox barks not when he would steal the lamb. Shakespeare Somewhere in the dusk that is the future can be detected the grey outline of a monstrous boom — a boom that looms larger every month it is postponed. When it does reveal its lovely self, it is going to have an effect on every nook and cranny of our economy and, particlilarly so, on the Savings & Loan Industry — the weathervane of every residential housing upsurge. Interest on the part of Informed money already is being whetted, as reflected by steady accumulation of Savings & Loan shares. By the hme public psychology spotlights the group, many Issues likely Will have advanced beyond the accumulation stage. Prices of Savings & Coans have sharply – in large part to money market condItions. Although conditions presently are not conducive to a renewal of favorable market actIOn, there are indications that the worst could be near- ing an end. Favorable factors include' (1) The Federal Home Loan Bank, the regulatory agency for Savings & Loan compames, has taken a .onstruchve positIOn in making funds available for mortgages. (2) LiqUidity has been markedly increased. (3) Much of the savings inflow has been locked up in three-year bonus accounts. (4) Repossessions and foreclosures have been sharply reduced, helped largely by rlsmg demand for hving units in California areas. ThiS, In turn, has freed up some prevlOusly frozen funds. (5) Larger Savings & Loans have been engaged In widespread acquisition programs, absorbing many of the smaller, less well managed savings and loan companies. T1ns has resulted in variou operating economies. (6) Earnings benefIts are due m 1969 over of the in- dustry's loan portfolios a s earlier lower Yleldmg hfed and replaced with loans affording higher returns. (7) A hOUSing shor,ge i e n specially in Calif- ornia. (8) Final 1968 totals should show a pickup 10 I ahfornia housing starts, or about 150,000 starts. Further gains to nrar 180 llij star re expected this year. Demographic factors remain . 70' s the size of the prime home buymg age group, after hitting a 1. 9 million annual; are expected to be booking ting hitched. As recen e upward after sev 1 r cl. .a . are on the uptrend By 1975, 2.5 mIllion couples annually of eternal bliss, or, plainly speaking, get- vernment, the birth rate is also again trendmg This suggests a near-term future need for larger quarters for many e. Deposit Inflow m the key to S&L profItability, and for the hOUSing boom we anticipate, an expans of funds available for new mortgage debt must take place. Savings Loans ASSOCIatIOns recently reported a 3 larger net savmgs Inflow m February over the year earlier month. Should this continue through the Spring, the outlook would take on a definitely favorable trend. Historically, the group has a pattern of over-acting to various developments. This has been accentuated by the relatively thin floatIng supply of all lIsted issues. Total capital ization of the ten leadIng S&Ls is less than 50 million shares. The fl08t is believed to be less than half of this. The best situated S&Ls are those located in Cahfornia with only a minor portion of theIr depOSIts derIved from out-of-state sources. These non-CalIfornia depOSIts often are the most volatile in that they come and go, ever seeking highest yielcting Instruments. The sudden withdrawal of these funds caused much of the decline m liquidity and had an unfavorable effect on earnings. Our partIcular faVOrItes within the group include FIRST CHARTER FINANCIAL (43) and GIBRALTAR FINANC1AL (33 1/2), bot11 of which Jlready are on the Price Appreciation part of our Recommended List. From the techmcal view, much higher obJectives are readable for the entire group. Our particular price goals for First Charter and GIbraltar are 80 and 58, respectively. r nvestors aw.tre of the coming housing boom and willing to exerci se patIence will find, in ihis industry grouping, the potential for above-average capItal appreciatIOn. Dow-Sones lnd. 035.48 Dow-.Jones R8ils 24'3. 64 HARRY W. LAUBSCl-lEIl. FOIl. ANTHONY W. TABELL WALSTON & CO. INC. AWT'HWL'amb ThiS mnrket !'th'r III p\lhh'lhed or \ur ,,,I\H'nj.l1t' \11'1 ll,f,m'(I1l I, .. ,,1 III Il.j \ … 11 I ',,ullllll1 I I'ul e.. ,formntmn …. 1\'1 obtnln, frllm ,,111,1' (' 1,,111' In I.. 1'111.1. I.ul ,. ,! n,1 ..'Il.l!.,njc ,t … (IUII,\ \\-11 .. \ InC' mil) have lin III 01 1'1lh,I … lnd ..,II th, r'I'o h,ltll ',Ilnill The In In.! It-. flit, .., ,luN'lors or WN301

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