Tabell’s Market Letter – March 14, 1969

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 –…