Viewing Month: May 1969

Tabell’s Market Letter – May 02, 1969

Tabell’s Market Letter – May 02, 1969

Tabell's Market Letter - May 02, 1969
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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 ANO OVERSEAS — – TABELL'S MARKET LETTER May 2, 1969 As so often happens III the stock market, lethargy came to an end thlS week and was replaced by fireworks. Following three days of rather grudgmg strength, the Dow-Jones Industrial Average scored a 9-point advance on Tuesday and followed this up with an even more spectacular Wednesday performance, advancing some 16 points on a trading volume of 19,350,000 shares. This volume was all the more outstanding considering its achievement in an abbreviated 4-hour session. Had the same pace been maintained throughout a standard 5 1/2-hour trading day, total volume would have been a record 26,300,000 shares. After consolidation on Thursday, strength on the week's final'day continued the gain with an intraday high of 961. 68 being reached. Where does all this leave the market at the moment It IS a trUlsm to say that the — short-term trend must now be defined as being up. But this IS, actually, the major change brought about by last week's manifestatlOn of strength. Late m March, the downtrend, which had remained in effect through December, January and February, was broken, and through- out April's sideways action, the short-term plcture had to be characterized as uncertain. Although, by last month, the selling pressure which had brought about the December-Februa decline had almost completely disappeared, the market was still unable to mount any worth- while action on the upside. This picture changed dramatically with Tuesday's and Wednes- day's heavy upside trading volume and moved the short-term picture from one of uncertainty to one of a rather clearly defined upward trend. How far can such a trend continue In terms of the Dow-Jones Industrials, a logical upside target would center around the 995 level. Thls for a number of reasons. It is, first of all, the upside ohjective of thJJ'0in n se formed in the 900-938 range throughout early 1969 — a range n ee clsively penetrated on the upside. Secondly, it mvolves a test of the old un 1000, which turned back the Dow first in February 1966 and then ast year. Thirdly, there is historical swing and then consolidate. Thus, un 1!…e retrace the n forms, changing tne picture, an attack on the 1000 level 1 expectatton. There er r sons for believing that such an attack could be ultimately successf term objectives fo IN-fu e ecord high levels for the Dow. The higher longereen mentioned before in this letter, and they sttll exist. They existed, mdeed, r u the last four months' weakness, and they continue to be valid today, In other wo ,the long-term picture, as contrasted with the shorter and inter- mediate-term, was b Ish when the Dow last made a high in December, continued so through out the subsequent short-term downtrend, and remains so now that that downtrend is probabl over. This letter continues to believe that the market remams m the confmes of a long-term basic uptrend which began m October 1966, and which, despite the vicissitudes willch have oc- curred in the interim, was never seriously breached. On two occasions in the past 2 1/2 years, of course, sufflclent deterioration was ex- hibited to cause serious doubts to be ralsed. The flrst such occasion was early 1968, and the second — coincidentally, Just about a year later –was early 1969. For the past few months thlS letter has been pointmg out the serious deterioration that was evident. History bears us out, however, in the presumption that it is almost always advIsable to walt for totally de- finitive eVldence before assuming the eXlstence of a maJor downtrend; -The evidence, to our mind, never became defmitive at any ttme during the past 2 1/2 years. In summary, then, we are now in a perlOd when both short-term and the long-term trends are positive. The intermediate-term picture is still clouded.The upswing from the February lows is still not great enough to be defined as being intermediate-term m stature, and the previous mtermedlate uptrend was broken in early January. Thus, some uncertamty still exists in the picture and will be resolved only by coming events. Meanwhile, however, the policy suggested by thIS letter in recent months — that of full investment in highgrade securities — should begin to offer tangible rewards. Dow-Jones Ind. 957. 17 Dow-Jones Rails 237.36 ANTHONY W. TABELL WALSTON & CO. INC. AW.Tamb This mnrket \ptlt'l 1'1 puhh&hll\ fOi ,nUL ,nllVI1I'Il,l' .,ud ,nrnlfl),ltlnn .In!! 110t .111 (lITt'l In ;tll 'II .1 'IUIL.lllflll tn l.u, .In) St',UItlt'l !I,,'u-.;cd 'lhe In formation \\lIl oiltmnei frnm ,ou, …. \\P 1,,11\' 10 II., 'II,tI,lt, hut w.' .I liot 1l\l.1l,lnlcl- It& .1('(UI.l'\ \\',110.101 K. C(), Int ,Iud dll.'rWrH QI l'rnnloy,', mlLY have all mh'JCHt III 01 IUl,hH,c and ,.11 th\ l.l'II,d tn hCll'ln ., .

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Tabell’s Market Letter – May 09, 1969

Tabell’s Market Letter – May 09, 1969

Tabell's Market Letter - May 09, 1969
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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 OVERSEAS FILe TABEll'S MARKET lETTER May 9, 1969 Last week's market, essentially sIdeways to firm, was normal following the sharp run- up in the Dow scored during the prior week. Although the market is at the moment mildly overbought on most short-term indicators, there is nothing to indicate that the move could not. be extended a bit further and we continue to feel that 995 constitutes a logical near-term ob- jective for the Dow. Despite the lack of action in the averages during the past week, a great many oil stock with acreage in the Arctic region,were strong. These stocks have been market leaders over the past year and, admittedly, a great many are highly speculative, especially in view of the faet that they,have advances.of better than,1000/0 from fairly recent lows. Nonetheless, for those investors who can assume-risk, we feel there is substance in the Arctic 'oil play. With amrajor.rpercentage of the world's oil reserves locked up in the Middle East and along the northern fringe of the African continent, areas subJect to no small degree of poli- tical unrest, it is understandable why in recent months especially, economic and government planners of the Western World have been turning their attentions to the NewWorld's far nort ern reaches in hopes of finding oil depOSIts of commercial size. Recent discoveries present the suggestion that these hopes may be realized even beyond earlier expectations. Last July's discovery of what probably is the largest petroleum deposit in North Amer ica by the Atlantic-Rtchfield-Humble Oil group was important not only for its size but for its DOMESTIC location. Not only did this discovery help lessen dependency on foreign oil, albeit by the very smallest degree, but It encouraged increased exploration work across Alaska, through the MacKenzie Delta and into the Canadian Arctic also has encouraged the Russians to send oil geologists into the northern reach of 0 it would seem tha things definitely are heating up in the ice-covered Geologically, it has been well known for many e S tha ctures in this area were favorable for the discovery of oil deposits. se en deposit forms almost a colla around the top of the world and sts fa 1 i it Ia!llts-have—produce-d'formations-geot -c –s Ha s structure state that folds and ' These same geologists have sl.m'iity that oil located in these northern re- gions could number in th hun It is possible th t .n barrels, much of which could be recoverabl ic areas might offer investors more exciting poten tial than does Ala – t found, although some gas has been located, and shares of companies involve n his search have unusual speculative potential. The recent dis- covery of natural gas 0 iIle Island bears adequate testimony to the excitement that could accompany any ificant oil find. When news of this was flashed to the investment community, the demand for shares pushed many stocks up between 10 and 20 in only a few hours. The Melville Island story is this. A test well at Drake Point on the island encountered a 90' gas zone at 3600 feet. An unmeasured gas flow occurred while removing the test stem. The flow of gas indicates the structure being drilled has porosity and permeability, permit- ting the possible presence of oil further down. Time alone will tell, but Lady Fortune seems already to be whetting her lips. One of the more interesting situations connected with this turn of events is one of the stocks on our Recommended List Pacific Petroleums, Ltd. (36 7/8). Pacific Pete holds about 5 million acres in Northern Canada, more than half of whtch IS located along the rtm of the Sverdrup Basin, the area of present urgency. A find of even one billton barrels of oil on PP' property would add an additional 20 in assets fo the approximate 23 in assets already be- hind each PP share. Few analysts believe these figures are not conservative. Thus, Pacific Petroleums, selling around the 37 level, IS priced below its potential asset value and offers substantial increases in asset worth should oil be discovered in commercial quantities. Phillips Petroleum, also on our Recommended Ltst, holds almost 10 millIOn shares of PP, which is worth approximately 21 per Phillips share at current markets, substantially augmenting the upside potential for Phillips. Other companies of interest active in this same area include Standard Oil of N. J. , Imperial Oil of Canada, and those smaller companies form ing the Panarctic Oils consortium. This latter group includes Bow Valley Industries, Dome Petroleum, Canadian Pacific Oil & Gas (subsidiary of CP RR), Canadian Gridoil, Barber Oil and Bankeno Mines. Dow-Jones Ind. 961. 61 Dow-Jones Rails 238.85 ANTHONY W. TABELL-HARRY W. LAUBSCHER WALSTON & CO. INC. AWTHWLamb This mnrket letter IS Jlubhshed for OUI conv(nlencc and mforffiltlOn and 1, nnt .111 off1 to 9(11 Ol ,I to buv .lny '(.l'uraLws dlscussPd The tn- formntLOn wns obtamed from sources we believe to be hut …. e do !lot gu\I,mtec Its Ilccuracy. \\Rlston & Co Jnc, an.\ Its officers. dIrector! or employees may have nn Interest m or I)urchase and sell the HCUlltics rderreri to herein WN3tll I I I I I I I ! I I ……… ',lni 'ii .nl1

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Tabell’s Market Letter – May 16, 1969

Tabell’s Market Letter – May 16, 1969

Tabell's Market Letter - May 16, 1969
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Walston &Co, Members New York Stock Exchange and Other Principal Stock and Commodity Exchange. OVER. 100 OFFICES COAST TO COAST AND OVERSEAS lABELL'S MARKET LETTER May 16, 1969 The stock market extended its gains last week, although in somewhat desultory fashio and with considerably less ebullience than had been displayed in the dramatic advance a fortnight before. After early weakness, 5-point advances were chalked up on both Tuesday and Wednesday and, although the lack of any dramatic proposals in Mr. Nixon's speech caused a mild selloff on Thursday, a portion of this loss was recovered in Friday's trading. The week's high, reached on May 14th, was 974.92 in the Dow. Much has been written in the financial press about the surprising nature of the stock market advance in late April and early May. Actually, there is very little very surprising about the advance. In fact, it would have been much more surprising had the market not gon – -up than'had it behaved-just exadlY-a-s-inHd-. – Let us see if we cannot document this thesis a bit. The central fact of today's stock market is the fact that it has been in an uptrend ever since October, 1966. In an uptrend as long as this one the trend channels are quite clearly defined, and at this stage of the game it is possible to define the uptrend on the Dow with a good deal of precision. At the present time, that channel is rising at the rate of a bit more than a point a week and its center is around 955. The upper level of the channel is at 1018 and the lower level at 893. Viewed in this context, the rise is hardly surprising. At the February low of 899, the Dow had returned to the very bottom of the trading channel which had contained it for more than two years. It is a basic tenet of technical work that such a channel is more likely to hold than to be broken. In this light, the advance was hardly surprising and, indeed, in view of the limit of the channel mentioned above, a further extension of ed improbable, hardly be consider 0 So much for the comforting truism that we arfa'l i et. Assuming it is true, the inevitable corollary follows. It is, at this ,r n old bull market. It has been going up for some 2 1/2 years now — 626 in s to be precise. This length of time does not constitute senility for a any means. For comparative purposes, the previous major 962a.nd endeci..inl!!fi6 carried,for 911 trading days, –alliitileonei-efSj– in 1957, managed to last for some- thing over 1000 days prior to 1 ' . NW\ lhelss, if our bull is not senile, he is, at least n ee It is true of s ust as it is of mankind, that the fullest fruits of vigor are found in the full 0 Thus, as we look back on the market history of the past few years, we find tha 19 as a rather easy year in which to make a good deal of money in stocks, and that 196 hile presenting a few more difficulties, still was conducive to rather good investment results. One would suspect that any portfolio manager, viewing 1969 to date, would hardly characterize the climate as being as conducive to huge capital gains. Despite our admittedly optimistic stance, we do not think that the investment task for the remainder of 1969 will become any easier. What we are seeing at the moment is nothing more than the normal phenomenon which takes place in the advanced stages of any upswing. At its latter stages, any upswing tends to be supported by fewer and fewer stocks. Such is the case at the moment. Most indices of market breadth suffered severe damage in the December-January decline. Since the Februa bottom, breadth, while on the plus side, has been unimpressive, considered by the standards of 1967 and 1968. Again, this is a tendency we would expect to see continued. One other characteristic of middle-aged bull markets is worthy of note. That is the- damage to speculative confidence and the improved relative performance of high quality stcks, a natural concomitant of investors seeking downside protection as well as capital gains. It is the recognition of this phenomenon that has led this letter to advocate — ad nauseam, we suspect — the upgrading of holdings and the restricting of investment to better-grade issues which appear historically low based on earning power. Fortunately, as our Recommended List will attest, there is no dearth of such issues available. We do not think that the party is over by any means. We are, however, inclined to believe it may be considerably less raucous. Dow-Jones Ind. 967.30 Dow-Jones Rails 241.41 ANTHONY W. TABELL WALSTON & CO. INC. AWTamb ThiS mnrk(!t Jettel IS Iluhh.hed (or OU! rOIlH'I\I'IIC'C lind Inform,lllOn and IS not an offer to s('l1 01 fl 'OhCLlatlOlI t) buv !til) I!cuntles formntlOlI was obtained from 'fUlCe-; we whev. 10 he Ihable, hut \\e ,10 lIot g\11rnnttl,' Its nceurnLV ,,,'alston 8. Co. lllc nnd It offi.e(,ls, employee'! mllY hnve nn mt.'leBt In 01 pUlchnsc lind tC1I the rtC'llctilo hClcln The In. 01 WN301

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Tabell’s Market Letter – May 20, 1969

Tabell’s Market Letter – May 20, 1969

Tabell's Market Letter - May 20, 1969
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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 OVERSEAS F,Le lABELL'S RECOMMENDED LIST May 20, 1969 This edition of our Recommended List gives long-term technical upside objectives, plus indicated support levels or shorter-term downside objectives. In all cases, we believe the stock would be attractive for purchase at the levels given in the support column. QUALITY & LONG-TERM GROWTH Close Qual- Upside Sup- 5/19/69 ity Obj. port Close Qual5/19/69 ity Alum-. Co.Ame-r. 79 3H- B–125190- 7J68-Jolin-s'Man-39'5'jR–'-'-A – Amerada 1183/4 Amer. T & T. 56 7/8 Borden Co. 31 5/8 Boston Edison 40 Caterpillar Tr. 54 1/4 A A A A A 132 -155 112 -108 67-75 52 43-60 28 54-62 37 64-80 43 Kraftco 47 Nevada Pro 46 3/8 Parke Davis 33 1/4 Phillips Pete 72 5/8 Radio Corp.46 1/2 A B B A A- Del Monte Feder.Dept. St. Goodyear Tire Intern'l Paper 29 1/2 37 1/4 32 1/4 45 1/2 A A A A- 50-70 50-62 40 51 28 30 27 39-36 Reynolds Tob. 39 1/2 Royal Dutch 54 5/8 U. S. Gypsum 85 1/2 Winn Dixle 343/8 A A AA Jewel Compo 52 7/8 A Addresso. Multi 77 1/2 A 68 43 90-112 74-68 Superior Oil2271/4 A- PRICE APPRECIATION Upside Obj. 60 ,56 62 44-60 78-86 50-82 54-74 62 102 45-64 255 Support -34 39 38 26 68 42-38 38-34 46 76 32-28 210 Close Qual- Upside Sup- 5/19/69 ity Obj. port Close Qual- Upside Sup- 5/19/69 ity Obj. port Air Products 43 1/2 A- 50-61 41-36 Ingersoll R. 46 3/4 A- 78-100 43 Air Reduction 28 – Arrier.Bakeries-23-17 2 A- 44 24 Koppers Co 45 B 60-66 Be\– –32 40 Amer. Distil. 28 1/2 Amer. Mach. F. 24 Arvin Ind. 32 3/8 Cenco lnstrum. 60 CiJ.ic. Mus. Inst. 26 3/8 Copperweld St. 23 5/8 Dan River Mills 21 7/8 Dart Ind. 49 3/4 Dresser Ind. 35 5/8 First Chart. F. 43 5/8 General Cigar 26 B 47-56 36 Medusa P.C. 53 5/8 A- 58 30 B 37 22-19 Mesabi Tr. 10 3/8 22 10-8 B 50 26 Olin Math. 31 1/4 B 43-50 28 B 72 52 Republic St. 45 1/2 B 62-90 38 B 38 25-22 Reynolds Met. 41 3/4 B- 71 36-34 B 42-58 20 nobt Control. 38 B 104 54 f B 38-46 20 Seaboard C.L. 45 B 55 42 A- 52-78 46-42 Stokely V. C. 28 7/8 B 35-44 26 B 48-57 32 Suburban P.G.39 1/2 A- 52-66 34 60-80 38-34 Union Camp 67 3/4 B 74-92 54 A- 53-72 26-23 Vornado 25 1/2 30-40 20 Gt. North Paper 69 3/4 B 75-108 58 Clark Equip. 39 A- 43-61 35-32 SPECULATlVE PRICE APPRECIATION Close Qual5/19/69 ity Allied Supermkts. 15 3/4 B Amer.Motors 11 B Auto.Data Proc. 82 3/4 Camp. Chic. 9 3/8 Comp.Scieflces 68 3/4 Gibraltar Fin. 37 1/4 Upside SupObj. port 2632 – 14 24-32 10-8 90 74-68 20-26 7 80-85 58 58 30-28 Close 5/19/69 Kysor Ind. -36 3/4 Macke Co. 19 7/8 Mesa Pete. 41 3/8 Pacific Pete. 35 5/8 Penn-Central 56 3/4 Technicolor 23 5/8 Quality B B B B Upside SupObj. port 52 36 25-47 17 60-73 42 51 32 62-104 48 30-50 18 Anthony W. Tabell Walston & CG. Inc. ThiS Hulletln IS TluiJh'lhu\ fOI )OUI (onVI.'TlfH ( .llIeI ,nI, Illlmn ,Ind ',0 not .In oIT. t tn …. ltS from '10UI(''., WL 1luVl' tn \ It-I,!,h, hut v.t' dn not It-. .'Ut,\.\ hnve fl. Intel cst I ur l,ur.. ,Inti It lht, wtUlllIt I'relltd tn h'I''11l 01 ,\ '''\n ,t Itll1 to 1U\ ,\11) l. IIIIIl.s ,IlSI The lnflllm.llion \V.t1.,tnn J,. (; 111(' BlOt,\ .. f1WI'IS dlll','I,,, ' ('mplmt''S mnl WN-916

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Tabell’s Market Letter – May 23, 1969

Tabell’s Market Letter – May 23, 1969

Tabell's Market Letter - May 23, 1969
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Wdlston &Co. —-.,;;..; Inc -..;;……;;….;;;.; Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OVER 100 OFFICES COAST TO COAST AND OVERSEAS -IL &' TABEll'S MARKET lETTER May 23, 1969 Tobacco, ctivine, rare, superexcellent tobacco, which goes far beyond all the panaceas, potable gold and philosopher's stones, a sovereign remedy…. .. Anatomy of Melancholy REYNOLDS (R. J.) TOBACCO COMPANY Current Price Current Dividend Current Yield Long Term Debt 38 3/8 2. 20 5.7 34,000, 000 Controversy always has been the forge at which the metal of stocks as well as that of in- vestors in general has been tested. It is hkely to remain so in future, as the more things chang …. 3.60 Cum. Pfd Stk; 200,000 sh;'- dustry has been clothed in controversy for sev– — – Common 40,235,552 shs. eral years now as anti-smok;mg campaigns wax Sales-1969-E Sales-1968 2. 1 billion 1. 9 billion Earn. Per Sh. 1969-E 4.15 Earn. Per Sh. 1968 3.71 and wane almost in time with the change in sea/ sons. Except for one brief period in 1964, the effect of all this notoriety seems to have had very little effect on earning power, for in the cases of the industry's leaders, per share earn- Mkt. Range 1969-1968 505/8-37 ings have been in a strong uptrend. Once again the shadows of concerned dis- cussion have entered the tobacco picture. Now it is the fear that the Federal Trade Com mission will require even stronger warnings to be used in all Cigarette advertising regarrl- ing health hazards. This fear already has caused the equities in the in- dustry to decline rather sharply in recent months. The de -n \ vicious in several instances, resulting in the almost sudden h t eery e investor continually seeks a genuine bargain. The shares of REYNOLD AC prevailing market levels are believed to constitute such a bargain. Reynolds is the largest of the cmgar;e a act weathervane for-'tne \i'iaustry, renec I -g – – v – s and as such has acted as the or not. From an early h5 the point where today it 's sell' . h on been ravaged by selling pressures to level near 38. This decline of approxi mately 250/0 from its I' i r ' s een without its compensating factors. Based on earnings projecti 4. s e, or better for the current year, RJR sells at an at- tractive price-to-ea n s I' of less than nine to one, well below its 12-to-1 average ratio of the last fifteen y s. The current 5.7 return afforded by the seC'lre 2.20 annua dIvidend, a definite aidate for liberalization, is well above the 4.60/0 return that is the average for the 1953-1967 period. The fear of more stringent health warnings being forced upon the industry by the FTC has created worries about the future of tobacco advertising on TV. It is quite possible that TV advertising will be sharply curtailed…. resulting in enormous cash savings to the cigarette companies. Certainly much of the funds will be directed mto other areas of ad- vertising, but, as in the case of Reynolds which in 1968 expended almost 80 million on TV advertising, the curtailing or cessation of TV advertising (perhaps a blessing in disguise to millions of TV viewers) would have an impressively favorable effect on earnings. RJR spen roughly 2.00 a share on advertiSing in 1968. As one leading financial service stated, The -noimplications for RJR's earnings picture, if most of this moneyeould be retained, is almost staggering. Time alone ';ili tell, but there is doubting that-the prevailing fe-aI'S have about worked their wor st on the stock's price. In addition to the plusses afforded by rising earnings, continued diversification into non-tobacco lines (aluminum, packaging, Chinese foods, grocery products, vinyl films) suggests a steadily.lessening dependence on tobacco, although this end of the business will con tinue to be the all-important factor. The recently approved merger with McLean Industries, the largest containerized freight service system in the world, is expected to bear favorably on longer-term earnings prospects. Techmcally, RJR is on top of its support zone at 38-36 and the upside objectives remain 54, initially, and 74 eventually. With downside risk from this level believed to be quite small, the other factors in this situation combine to suggest Reynolds Tobacco as an above-average purchase for investment at this time. The stock already is on the Quality & Long-Term Growth part of our Recommended List. Dow-Jones Ind. 947.45 ANTHONY W. TABELL-HARRY W. LAUBSCHER Dow-Jones Rails 238. 30 WALSTON & CO. INC. ThiS market Jetter IS lJubhbht..d for ff,(OnVl'lllenc(' ,Ult'l Infol In,llmn IInrl …. nt III r In sell t …Iu It,ll, ttl forrnntJon a… ohtnme,j from we lwht'H' to 1,11.1J,1( lmt \\1' tlo not. It!; .Ir UI.I' W X C emltoYl'C,\ may hnve RII lntN(!st JIl or J)urrhn'll' Ilnu s11 thl L'amb rcfl'II,j to hClcm un ….fUr II WI 111' nnd d The wor ' WN301

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Tabell’s Market Letter – May 29, 1969

Tabell’s Market Letter – May 29, 1969

Tabell's Market Letter - May 29, 1969
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Walston &- Co. – – – – – I n c – – – f i L e Members New York Stock Exchange and Other Principal Stock and Commodity Exchange. OVER 100 OffICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER May 29, 1969 The stock market continued reactionary throughout most of last week with the week's low being reached around 1100 a. m. on Thursday when the Dow posted an hourly figure of 933.23. The intra-day low on Thursday was 928.58, maklllg the total decline from the mid- May high 46 points or just under 50/0, a normal figure for a minor correction. Modest strength set in on Thursday afternoon and Friday,and the week's close was 1937.56 From a technical point of view, the decline since the middle part of May was normal ity personified. The top formed on the Dow in the first two weeks of the month yielded a downside objective of 938 which coincided with the strong support in the 930-920 area, the level at which the original base for the April advance had been formed. The Index pushed slightly further-'ifito,the support than mignCbeexpected,- but otherthan–thisthere wasverY,-little surprising about the decline. The pattern over recent years has been for short-term declines, such as this one, to be followed by a period of consolidation rather than an Immediate move upward, so that a week or two of irregularity would be the expected action at this pOint. Such a period could be followed by a move toward the 990 level which is the upside objective of the original base formation formed in February-March. As has been pointe out in previous letters, conSidering the present long-term stage of the market, act LOn can b expected to be highly selective with strength concentrated in higher quality issues selling on the lower end of their historic price-earnings-multiple range. Much has been made, of late, of the so-called money crunch, a phenomenon, which, while rather vaguely defined, does, without doubt, exist. It is statistically demon- strable that the Federal Reserve authorlties have reduced xxpansion in the mone supply sharply since early this year with the objective ion. The effect has, to date, not unexpectedly, been relatively is likely to be continued. 1\ V;f ti eing, however, it Widespread disagreement exists to the effects of current tight money efforts. The conventional ie uld indicate that such efforts will –p-roduce–contiriued high interest-rate – n , .. -d- '1'0 -edemoraiized-state -of the bondmarket at the moment would appear majority of the newer school of mone- taryeconomists, howev t as having a somewhat different effect. The initial effect of tig t e e s view, to cause a sharp rise in interest rates as in the present cas ,t onetary view would hold that shortly thereafter,the slower rate of expan . n f ey supply wlll cause a slackening of demand for new capital, and, therefore, a drop er than a rise in interest rates. It is, at least, arguable that the monetary contraction s proceeded far e mugh to date that, over the intermediate-term, lower lllterest rates appear almost a certainty. This probability leads to some rather interesting thoughts on the present investment scene. Money rates at present are at the highest level since the early 1920's, bond prices having been in an almost constant decline since 1946. It has been pointed out previously in this letter that the only regular pattern discernible in bond prices is one of very long cycles — twenty years or more in length runmng all the way back to the Civil.War. The enti period 1921-1946 constituted, with minor interruptions, a bull market for bonds, and the entire period from 1946 to 1969 has constituted a bear market. This bear market cycle is now twenty-three years old or about the average length of such a cycle historlcally. With monetary factors indicatiJ.g a possible intermediate-term bottom for bond prices, it is interesting to speculate as to whether this bottom may not constitute the once-in-a-lifetime turning pOint, in other words, if 1969 may not see the beginning of an interest rate downturn lasting for two decades. If this,s-thecase, and it is only conjecture at this point, the effect on stock prices is likely to be nil. Indeed, no discernible technical relationship between bond and stock prices which has worked for any period of time has as yet come to light. It could, however, have an effect on the relative performance of issues which tend to sell on a rate-of-return basis such as utilities and other defensive quality stocks. Dow-Jones Ind. 937.44 Dow-Jones Rails 233.40 ANTHONY W. TABELL WALSTON & CO. INC. Thl'5 mnrkct Jettel IS l)uhln,hed for ).OUl f'OnV!..nI('nce Jllllj mfDrm.dlon Iwd ' not .HI offer to sell or sollclt.atlon to Lu\ In) i .ormation WitS ohtmne(l from soure' w(' hf'h('v. to be rl'h.lhlc hut we do not 1(U1.rnnt('c It6 R('curacy alston & C . dISCUS tod Th I t ffi sd In- may have an Interest In or pur('has' nnd …ell the 'UlltH'S r('rl!lrcd to hClcln ' o. nco .In( ISO ccrs. ITLctors or . mb WN.SO\

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