Viewing Month: November 1969

Tabell’s Market Letter – November 07, 1969

Tabell’s Market Letter – November 07, 1969

Tabell's Market Letter - November 07, 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 IL E TABEll'S MARKET lETTER November 7, 1969 The passage of hme and the progression of market cycles continually bring new sets of problems which are posed to the market technician. Until just recently, the major prob- lem was to determine whether July 29, 1969 constituted a market bottom, or merely an in- terruption of an ongoing decline, The evidence inclined us fairly firmly toward the former view all along, and it has continued with each week to be more conclusive. The market strength of the latter part of last week when the Dow again approached its October 24th high added further evidence. It was accompanied by positive readings in a number of lagging indicators — indicators designed to signal uptrends not close to bottoms, but after a revers has been well confirmedAt.the present time, most such devices are in positive territory –and the premise-of a new seemsto- furtherevi -, . dence contradicts it. This being the case, a- new set of problems is then posed, centering around the ques tions of how far can the advance carry and how long can it be expected to remain in effect. There is, f!ir a number of reasons, no easy answer to these questions at the moment. One reason is that all of the popular stock market indexes, along with a substantial number of individual stocks, are in what are known in technical parlance as broadening base patterns. A broadening base occurs when a decline takes place with a number of significant pauses on the way down. When the market finally bottoms and a recovery sets in, very often pauses will take place at approximately the same levels on the upside followed by a resumption of th uptrend. This produces the familiar head and shoulders type of base formation which, when it is complete, allows for a much broader the case. Let us take as an example the current chart 9f&tur h\'iiow- nes Industrial Average. Between May and July of this year, the fr ust under 970 to its low of under 800. There were, however, a couple of f\tlj.y si cant pauses on the way down, one in early July in the 868-888 area, remember, once having touched its w – – -\ 'd id-July at 840-856. As we all he subsequently remained in a -at-the-t-ime; -the upside'potenti-als -of-this base centered around the penetrated on the upside in October, however, a trading rang is willing to accept h t i an 81n characterized the market ever since. If one he' e late July pause in the downswing, a broadened upside projection 0 – 5 c s possible. The pattern could broaden still further with additional work in th 8 ar A similar possib' for broademng exists in the Standard & Poor's 500. A conser vat i v e projection on e upside is 103 versus a present level of 98. This would be below both the May high of 106.74 and the 1968 all-time high of 108.37. It is, however, not at all a stretch of the imagination to conceive that the pattern could broaden so as to indicate an objective in the 110-115 range or a newall-time high for the Index. The problem of projecting an upside target is further compounded by the fact that, since the middle 1960' s, bull markets, in the averages at least, have been considerably less dynamic. The Dow advanced better than 700/0 between 1958 and 1961, and better than 850/0 between 1962 and 1966. The subsequent advance to December 1968, however, was only 320/0. The familiar argument tht the Dow was not representative of the market during the peri od is, at best, only partiril1y true, since the broader-based incJices also chalked up historically small adva.nces in 19613-(;8. One that seems to be ;hanging, however, is the length of time which an advancing phase occupies, On this basis, it would be normal to suggest that the coming upswing will last somewhere between a year and two years, pretty much the standard for the post-war period.- – ..'1 In summary, then; -there–are- some real difficulties involved in forecasting just how far the market rise may carry,and we would not expect these difficulties to be resolved for some time. It is not necessary, however, to be able to see the end of the road at the begin- ning of the journey. The odds now favor a fully invested position until such time as market evidence persuades us otherwise. Dow-Jones Ind. 860,48 Dow-Jones Rails 199.16 ANTHONY W. TABELL WALSTON & CO. INC. AWT'amb This mRrl.ct kttl1 IS pul,ilshed for YOUJ con'cnlcnee It,d 1nfOlmRtmn nnd 1, nut In O.fI'CI to 01 H formntJon \\,IUI obtRlllooJrom wurce. we bellevl' to be rehal,lc. hut do not gunr,\l\tc(' Its lICCUH1C\ employees rna) have an mterellt In or pUTrhase an'\ sell the S('CUlltW' referred to hetelll — lu ,U) ;,eCUllth!!\ d,,,tus,,ed The 1fiv \V,llslon &. Co. Inc ,tnd officers, Ullcctors or

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Tabell’s Market Letter – November 14, 1969

Tabell’s Market Letter – November 14, 1969

Tabell's Market Letter - November 14, 1969
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Walston &- Co. —–lnc —-Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OVER 100 OFFICES COAST TO COAST AND OVERSEAS lABELL'S MARKET LETTER November 14, 1969 Any reader of the financial page is certainly familiar with the great debate that, at the moment, is raging in economic circles. On one side are those who contend that the monetary restraints imposed on the economy throughout 1969 are indeed working, even though the results may not yet be apparent, and that the major danger at the moment is one of overkill — the precipitation of too deep an economic recession in 1970. The other side would argue that inflation has not yet been cooled — that the economy is still buoyant and continued restraint is..Btill-I'.equired. so obviously turn and start to move up last August There is an answer, we think, and it is perfectly consistent in light of the market's past behavior in similar circumstances. . '.1 Let us state, first of all, that we find ourselves on the first side of the argument mentioned above. We think that the effects of monetary restraints will become manifest at the end of 1969 and early 1970, that a recession is a distinct possibility, and that there should, under any rational policy, be shortly forthcoming some measure of monetary ease. How, then, do we square this view with our admittedly optimistic assessment of the outlook for common stock prices The National Bureau of Economic Research defines four periods in post-war econo- mic history as recessions November 1948-0ctober 1949, July 1953-August 1954, July 1957 April 1958 and May 1960-February 1961. In the case of four, there was an accompanying decline in stock prices. In the 1948-49 rec Sl in stocks came five months before the economic recession as defin9,yt e . 1953-54, it came six months before and in 1957-58 a month before (a h s c lces had been flat for a year), and in 1960-61 the peak in stock ain the nomy by five months. Again, in all four cases, the market had bottomed rted rior to the recession trough. The marketbottom-led the b ou onths-in-1949,eleven-months-in 1954;- six months in 1958 and five Now, admittedly, 'f we rm period, it is difficult to know where the peak will e e 1 P n ted. The FRB Index has moved ahead, albeit sluggishly, throu . Corporate profits, however,peaked in the first quarter and earning n e Clard & Poor's 500 reached their high in the last quarter of 1968. All this, it seem us, is perfectly consistent with a market which reached its high in Decerhber 19 , and it s bottom at the end of .Tuly 1969. The stock market's quite obvious lead on the economy is an outgrowth of its willing- ness to capitalize earnings which are being affected by a recession more generously than it capitalizes earnings at the height of a business boom — which is, when one thinks of it, a perfectly rational tendency. In the four recessions mentioned above, corporate profits after taxes, as measured by the Department of Commerce, declined around 25 in the first three and 11 in the last. In the first two recessions, the decline in earnings on the Standard & Poor's 500 was less than the total corporate profits decline, and in the latter two it was slightly greater. What is interesting, however, is the fact that in every recession the price earnings ratio has increased sharply, 20 in 1948-49, 15 in 1963-64, 33 in 1957-58, and 44 in 1.960-61. — – This is especially interesting in view of the current relatively low multiple on the Dow. Present prices mark the Dow at 14 times latest earnings. In a recession a 20 decline in earnings, about the worst being forecast, would bring earnings of 48. A 30 increase in the multiple, not at all out of line historically, would result in those earnings being capitalized 18.2 times for a price of 873. Were the increase in multiple to be compara,ble to the 1961 receSSlOn, the multiple could rise to over 20, which would result in a price target of close to 1000 at the recession's bottom. Dow-Jones Ind. 849.26 Dow-Jones Rails 196.22 ANTHONY W. TABELL WALSTON & CO. INC. AWTamb ThIS market letter IS publtshed (or your COn\CnlCnec nnd mformatlOn lind 1 not tn offf'r to sell or .1. soiL'Jtntton to bu\ !lny seeuntles The In- ormatIon WAS obtnmed from sources we heILevl.' to he rehable. hut …. e do not guarantee Its accunl.l'\' emplo),s may have an mter('f!t In or purchase and sell the S(eurltll's rercrrl(1 to herein & Co Inc Ami Its officers. director'! or WNSOI

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Tabell’s Market Letter – November 19, 1969

Tabell’s Market Letter – November 19, 1969

Tabell's Market Letter - November 19, 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 Fu.-c.. lABEll'S RECOMMENDED LlSl November 19, 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 11/18/69 . ity Obj. Address.Multi. 66 1/4 A 94-112 Alum.Co.Amer. 73 3/4 B 82-84 Amer.Tel & T 53 1/8 A 60-67 Boston Edison 32 3/4 A 62-80 Caterpillar Tr 42 3/4 A 51-64 Del Monte 29 3/4 A 35-50 Fed.Dept. St 38 1/2 A 49-53 Int.Bus.Mach. 363 1/4 A 450 Intern'l Paper 41 A- 46-60 Jewel Cos. 50 1/2 A 64-80 Johns Manville 33 A 46-57 Sup- 60 67-65 50-48 32 37 23 30 325 35 47-44 26 Close Merck 1071/4 Natl Cash 143 Nevada Pr 43 5/8 Parke Dav. 35 Phillips P 26 Radio Corp 40 Rey.Tob. 485/8 Royal Dutch441/2 Sears Roe. 69 1/2 Sup. Oil 158 Union Carbo 40 5/8 Qual- Upside Sup- Rort A 116-136 96-90 A 175 138-128 B 68 39-36 B 50-60 32-28 A 37-43 23 A- 47-62 36 A 76 45 A 62-68 40 A 102 62-56 A- 195 140 A 50-63 40 PRICE APPRECIA TION Close Qual- 11/18/69 ity Amer.Dist. 215/8 B – Amer-Mach.F.-ill/2 B Arvin Ind. 26 1/4 B Atlas Chern. 23 1/8 B Cenco Instrum. 453/8 B Chic. Mus. Ind 30 B Clark Equip. 35 A- Copperweld St 18 7/8 B Dan River Mills 141/4 B Dart Ind. 53 1/2 A- Faberge 375/8 B First Chart. Fin. 411/4 Grolier,Inc 323/4 B Ingersoll Rand 41 5/8 A- Koppers Co. 41 1/8 B Upside Obj. 42-47 27-37 34-50 38-50 52-56 38-45 46 46 22-36 68-78 55-60 60-80 43 53-78 60-68 Sup- Close port 11/18/69 19 McNeil Corp. 17 3/4 19'—'M-edusaP.C-30 22-18 Mesabi Tr. 9 17 Pittston 67 3/4 40-38 Rep. Steel 37 1/4 28-24 Reynolds M.353/8 29 Robt. Cont. 40 1/8 14 Seab. Coast 1. 38 1/2 10 Stokely V.C.31 3/4 46-42 Sub. Prop.G. 33 1/2 33-27 Texas Inst. 119 1/2 43-37 Union Camp. 33 30-26 Vornado 22 1/4 39 West. Union 481/2 38-35 Quality B A- B B B- B B B A- B B B Upside SupObj. port 23-32 15 4058 24–16-22 8 75-90 64-60 45-62 34-28 42-71 30 52 33-30 48-55 39-34 44-56 26-22 40-54 29-26 165-180 90 46-74 28 29-40 18 70-79 44 SPECULATIVE PRICE APPRECIATION Close Qual11/18/69 ity Allied Supermkts.14 5/8 Amer .Motors 10 7/8 Camp. Chiboug. 11 5/8 Comp.Sciences 30 1/4 Dixilyn Corp. 24 7/8 Gibraltar Fin. 32 1/2 Gt. West Fin. 25 1/4 B B B Upside SupObj. port 22-33 24 20-26 40-43 30-4846-58 40-60 10 8 10 24 19 28-26 20-18 Close Qual11/18/69 ity Kysor Ind. 27 7/8 Macke Co. 18 3/4 Mesa Pete. 44 1/4 Pacific Pete. 27 5/8 Penn Central 323/4 Technicolor 23 7/8 Tishman R. 25 5/8 B B B B B Upside Obj. 36-52 26-47 60-73 43-51 62-104 40 45-58 Support 24 15 41-38 25 27 18 21 Anthony W. Tabell Walston & Co. Inc. This Bulletm lS llUbhshl.!d fot your ('onvefilt'OU' .)fi' Info mlilion …. nd IS not .n OtT('1 to or a SOlICit ItLnn to buy an) b('CUfltlCS ,hsCI\s,c,! The )nformatwn wns oht!\lncd (lorn we ldlLVt to I leh,\ble, hut Wt rio not gU.l.r.lnltL' Its ,\ClUIII'Y, \V….lbton &, Co, Inr an,l officel. tillc'torR 01 may hElve an Interesllfi or llUlrhllb' an.l bell the IdellL'i1 to helt'ln WN-916

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Tabell’s Market Letter – November 21, 1969

Tabell’s Market Letter – November 21, 1969

Tabell's Market Letter - November 21, 1969
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Walston &Co. ———Inc ——–Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OVER l000F.FICES COAST TO COAST AND OVERSEAS TADELL'S MARKET LETTER November 21, 1969 Stock market action has deteriorated quite sharply over the past two weeks. From a high of 871. 77 in mid-November, the Dow has reacted to an intra-day low of 820. 35 as of Friday. Although volume has not been heavy, breadth has been poor and most short-term indicators are now in deeply oversold territory. The depth of the decline at this stage is somewhat disquieting, but inspection of individual chart stock patterns shows absolutely no reason to abandon our contention that most stocks are somewhere in the process of forming a base. We would accordingly utilize the weakness to add to holdtngs of issues in good technical patterns such as Reynolds Tobacco C — – REYNOLDS TOBACCO. COMPANY — – – –,-,11 Current Price Current Dividend Current Yield 46 3/4 2.40 5.1 The renewed earnings upsurge previously an hCipated for Reynolds Tobacco seems to be on schedule. Despite rising industry costs, conti- Long-Term Debt 2.25 Conv. Pfd. Stk. Common Stock Sales-1969-E st. Sales-1968 297 million 8, 103, 837 shs. 40,235,552 shs. 2. 25 billion 1. 96 billion nued harassment by anti-smoking groups and an anti-trust action settlement, earnings for 1969 are expected to rise better than 10 above 1968 levels. Even more appealing to longer-term investors, the outlook for this rate of improvement being augmented is highly optimistic than Earn. Per. Sh. 1969-E. 4. 15 to several developments having taken place sinc Earn. Per Sh. 1968 3.71 RJR was the letter back in April Mkt. Range 1969-68 50 5/8 35 1/4 of this year w n h a sharerfb The most recent development was the 0a cR was selling at 38 3/8 ago of a new method of puffing cigarette tobacco, doubling its bulk and possible to produce a cigarette with a great deal less tobacco. 111 have two major effects. Firs the.-E-.ffi()1,lnt of tobacco in a tine the smoker irlhaleS. Second, si — u , so will the amount of tar and nicos represent 60 of ffiaiiUfacturing costs, substantial production ,s Meanwhile, 4 i Ust b s i fro e coming halt of TV and radio advertising are imminent. Sales vo u ' e damaged httle by the cessation, and cost reduct- ions of close to ne 1ble. In addition, se a i tant acquisitions have been completed over the past year, or are now in various stag discussion. The most important addition was McLean Industrie one of the largest oce freight transporters. Now called Sea-Land Service, this subsidiary has 38 vessels, 33 of which are container ships. Eight additional ships are under conversio to container carriers and eight more ships are being built abroad. Sea-Land also is nego- tiatingthe charter of sixteen containerships with the U. S. Lines subsidiary of Walter Kidde & Co. This unusually rapid growth is a reflection of the highly promising outlook for ocean trade and containerization in general. The merger with Professional Golf Company, a leading producer of golf balls and equi ment, has been temporarily suspended until agreement on the ratio of exchange of common shares has been reached. The eventual additio'lof this company to Reynolds' expanding inte- rests, should it definitely come about, would provide still another step away from the earlie almost complete dependence on tobacco products. This diversification into non-tobacco lines has resulted in a substantial position in the food industry. Although a recent agreement with the Dept. of Justice will result in the divest iture of its Penick & Ford Ltd. subsidiary, the company will be able to retain its profitable consumer food business. This operation includes such well known brand names as My-T-Fin Vermont Maid, College Inn, Chun Kmg Chinese foods, Patio Foods, Filler Products and Pacific Hawaiian. The company also is active in the production of aluminum, packaging and vinyl films. Technically, RJR continues to suggest favorable market action. There 1S good support in the mid to'low 40's and a long-term price objective in the mid-70's. Already on the Quality section of our Recommended List, Reynolds Tobacco again is recommended for purchas – Dow-Jones Ind. 823. 13 Dow-Jones Rails 192. 91 ANTHONY W. TABELL-HARRY W. LAUBSCHER WALSTON & CO. INC. AWT,m3J '8 m b This market letter lS )lulJllsheri for find Infolmdtlll1 IInri not 1\11 off..t tn or ,I ..,olultatlon to bu\ .lny dlscusst'tl The In- formatIOn …. n'l ohtnmcd from .,OUICt' v.e h'li('v,. to ,,. rdmhl,. hut …. e do not guarantel Its lIccur,lcy 8.. Co. Inc. ,lnd ts ffi d t employees mny hnve nn Illterest In or JJUuh.lSe liml !cll the !elUrLtles referred to herem L 0 leers, Irec or! or WN.301

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Tabell’s Market Letter – November 28, 1969

Tabell’s Market Letter – November 28, 1969

Tabell's Market Letter - November 28, 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 …;;n.. November 28, 1969 It would be impossible for anyone, save for the most insufferable Pollyanna, to de- scribe last week's market action as good. Nonetheless, even with the market having declined in 9 of the past 13 trading sessions, and the Dow again flirting with the 800 level, one cannot resist the temptation to wonder how bad the market's action really was. The answer would seem to depend, by and large, on where one looks. As mentioned above, the Dow-Jones Industrials, the most widely followed of market indicators, have re- turned to within an ace of the abysmal depths in which they sold at the end of last July. In the process, almost all of the October rally from an mtra-day low of 793.95 to the November high of 871. 88, has been retraced;Those bearishly further.-fodder for.thet-I' pessimism in the action of the Dow-Jones Rails which plummeted last week to a 3-year low of 184.39, and were coming close to violating their 1966 low of 181. 97. Yet, it is also possible to cite indiCators proving that the last fortnight has not been all that unmitigated a disaster. The Standard & Poor's Stock Index, for example had, at its week's low of 92,24 retraced only 62 of its advance from a low of 88.04 in July to a high of 99.23 early last month. Similar action was evidenced by the Standard & Poor's-425 and the New York Stock Exchange indices. ' The above exercise is, of course, a perfectly valid illustration of the limitations of market averages and stimulates the unoriginal thought that investors own not averages, but stocks. It is always easy to define what averages are doing simply by citing their levels. With more than 2000 stocks listed on the New York and American Stock Exchanges, it be- comes a bit more difficult to quantify what different what relative numbers. at a given time, and in 0 Nonetheless, it is fairly easy to cite a few e e Dow Industrials ar at the moment, misleading us as to the level of the m .I w k only at the Dow, the market is, as noted above, back to 1tS levelsMstfJ T umber of ind1vidual stocks eshowing a comparable pattern, however, is a i ly . scule. This can be illustrated by . the following table which divides the – –Jw.Yiilto nine pliases— fivedeclines and four rallies. Each of the at or above the 800 level. The f AartJund 840-860 on the Dow and bottomed out olblJful shows a series of 10-point ranges for the Do close, and the highs and new low i 0 ing nine columns show the average number of new g the market phase that the Dow closed within that range. A glance at tli a e ev' ces the changing character of the market since last Summe Decline Decline Rally Decline Rally Decline Rally Decline 7-16 – 1- 8/8 – 8/14- 9/3 – 9/10- 9/25 – 10/10 – 11/11- DJ Close 7/30 8/7 8/13 9/2 9/9 9/24 10/8 11/10 11/26 830-840 3-291 21-44 4-58 38-78 69-24 7-71 820-830 3-368 6-55 7-64 14-56 3-83 20-80 11-99 51-26 1-92 810-820 2-416 2-131 2-81 13-56 5-129 4-158 58-50 3-154 800-810 0-685 3-117 12-99 28-77 4-130 The first time the Dow reached the 800-810 area in July, the average number of stocks making new lows was 685. On the next move to this range, only 117 stocks on the average made new lows, followed by an average of 99 in September and 130 at the moment. Similar figures can be seen for other market levels and, m addition, the increasing number of stocks making new highs on rallies-is–readily apparent. Quite patently, to say that the market has- returned to its levels of last Summer does not constitute telling the full story. There is nothing, in other words, in the action of the past few weeks to negate the the- sis that we are somewhere in the process of forming a base, this process being defined as a period in which more and more stocks entered defined uptrends and fewer and fewer remain in confirmed downtrends. It is certainly impossible to ignore the v1rulence of the recent de- cline or — now — to deny the distmct possibility that the Dow, and perhaps some other indi- ces as well, may reach new lows before the base formation process is complete. However, we think the present weakness will prove, historically, to have been part and parcel of a re- versal process and not part of an ongoing bear market. Dow-Jones Ind. 812.30 Dov'-Jones Rails 186.64 ANTHONY W. TABELL WALSTON & CO. INC. AWTamb Thill market letter is published for yOUr convenience and Inrormatlon and IS not an offer to sell or a soliCitation to buy Rny seeurltLes J cussed Th I formation Was obtalOed.from Bources we believe to rehnble. lout we do not guarantee Its Itcurncy Walston & Co Inc. and t ffi 115 d to' n employees may have an mtere!lt In or l-'urchase and sell the securltiE's referred to helem 115 0 cers. Irec rtI or —

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