Walston &Co. Inc Members New York Siock Exchange and Olher Pr;nc;pal Siock and Commod;ly Exchange. OVER 100 OffiCES COAST TO COAST AND QVERSE.a.s TABELL'S MARKET LETTER December 5, 1969 Twixt the optimist and pessimist the difference is droll' The optimist sees the doughnut but the pessimist sees the hole. ………. . McLandburgh Wilson In recent weeks, pessimism has run rampant not only through the Wall Street canyons, but seems to have made itself particularly conspicuous throughout many parts of the coun- try. This gloom and doom attitude is not new to the stock market. It has been present in almost every major market decline of the last fifty years. The outstanding characteristic of this .attitude is not its.depth but its.t-iming.- -Almost,without exception;-this ,feeling-of.-,,—H-1rJ mountifng woe has reached its zenith near major market bottoms. It reflects the inherent . right 0 every man, often exercised, to worry more over what has happened rather than to be concerned with what is to be. Shakespeare put it aptly when in Hamlet he said There is nothing either good or bad, but thinking makes it so. Lately, the market,as reflected in the Dow-Jones Industrial Average, has been acting very poorly. This is without dispute. An unwarranted amount of importance was attached to the 800 DJI level. Its strength largely was psychological,and to an extent psychology is a factor with which to be concerned in the market. But statistically, the 800 level cannot be considered of above-average importance. While the Dow-Jones Industrial average was breaking to new lows, both intra-day and on a closing basis, the Standard & Poor's 500 Composite average, as well as the S& P Indus- trial Average,continued to hold above their previous low lstJuly.TheJuly lows were 88.04 and 96. 16, respectively. At prese9h-, the a and at 91. 73 and 101.14, respectlVely. The New York Stock i lS past Summer, July 29th to be specific, was 49.31. At the close on Frid(;y;hhis at 51. 20, still holding above the previous 'J week, this average stood -This does — r' – tile marKet continuing .t…o….ac(poorly in the period just ahead. On the it not preclude the market's acting better than it has. The downslde NYSE indices can be placed close to their previous lows. wo into the 760-750 re '0. T at rhaps the Dow-Jones Industrials could dip down ount to a decline of less than 5 from prevailing levels, not an altog a – s situation. – Furthermore, it 0 e extremely dIfficult for someone to buy 100 shares of the Dow-Jones Industrial rage, or an equivalent amount of the NYSE index – or even that of the S&P. Individual stocks are bought and sold and the chart patterns for the majority of these individual issues suggest that there is rather small downside risk potential from cur- rently prevailing levels. The stock market always has been its own best crystal ball and probably will remain so for a long time to come. But in the market place the past has been a good key to future action and … study of this past history points out one undisputed fact selling when things look blackest, more often than not, reaps many regrets later on. It does little good to point out that Mr. Lowry, one of the most highly respected of all stock market technical analysts, said The market is always lowest at the bottom! Perhaps he said this with tongue in cheek for there is humor to it, but it cannot be Picking an absolute bottom to the market is an el,ercise without merit which we will leave to Saturday's heroes. The primary need is to understand that the future is bright and that stocks are cheap when considered from the investment viewpoint, and that buyers of stock on further weakness are apt to fare better in coming months than will the sellers. Particular situations to consider for purchase can be found either in the Tabell Recommended List or in the many sltuations recommended by our Research Department, listings of which are available from any Wailston Account Executive. ANTHONY W. TABELL-HARRY W. LAUBSCHER Dow-Jones Ind. 793.03 WALSTON & CO. INC. Dow-Jones Rails 179.76 WTHWLam1 Thl'l mJLrket letter IS publu,hed for l1nd information and ''I not lin olT… r to 61'11 or .-\ 501lc1I.-1.tlOn to lIu an) 't!r'untL, cll;culed (ormnlwII ohtailled from SOUle!!'! w(, lwlll'V t() h., It'lt.lbl , hut WL do not KUar.lnt;x Its .lrCUrar '\\'nh,trm & Co lIlt' 'Ind li; olfkelb, employees may have an Intel eat In 01 IJurt'h,l-c IIUti sell the r..f,'lrCli In The In or

Walston &Co. Inc Members New York Stock Exchange and Other PrlOcipal Stock and Commodity Exchange. OVER 100 OFFICES COAST TO COAST AND OVERSEAS FIL E. TABELL'S MARKET LETTER December 12, 1969 It has been the custom of this letter in Decembers past to devote one or two issues to a long range attempt at market forecasting for the subsequent year. This forecast has generally divided itself into two parts, the first looking backward at the year just past, and the second, an attempt to assess the year to come. Accordingly, in this letter we will attempt to lay the groundwork for a forecast by reviewing the year 1969. The squeamish are thus forewarned so that they may cease reading at this point. 1969, as nobody needs to be told, was a bear market year. Like all bear markets, .it.has.been.accompanied, e specially in.its .lateI'.,-more the .usual-jererniadB , and warnings of disaster. These have, if nothing else, provided us with an occasional good laugh during a period w.h.en.litle-BllSienance was available from prices crossing the tape. There are, for some reason, those who believe that every market downswing is a unique visitation unprecedented in historical experience. Actually, the market drop of 1969 was a phenomenon totally within the context of the post-war experience, and has been, withil! the standards of such experience, on the relatively mild side. Indeed, it was exceeded in severity by the declines of 1946, 1947, 1949, 1957, 1962 and 1966. None of this, admittedly, is calculated to make the investor feel any better about his 1969 losses. It is simply a re- minder that difficult years such as the past one have appeared before in stock market history and will undoubtedly recur again. President Harry S. Truman reminded us that those who could not stand the heat should get out of the kitchen. The applicable to the stock market. 0 It having been admItted that 1969 was a bearakt a, a uiry into the reasons therefor — aided by the usual 20-20 hindsight — ma aps pful. Was drop due to a decline in corporate earnings Hardly. ,e lng on what series one cared to use, have been flat to slightly up during m t he . The erosion is totally ex- 'plained-by the'fact that the . -'; ge earnings at the end of 1968, to a close. What we have clea V ,40;13 times current earnings as 1969 draws ell;.'0iS' an erosion of expectations. As we t e it becacle quite evident that (A) inflation was a serious problem an ,(milie ers that be were going to apply the necessary pressure at least according to i ow ghts, to bring this inflation to a halt. The consensus fore- cast for lower corporate its, certainly, and an economic recession, probably, which thus developed began ave its effect on stock prices, and the adjustment of expectations continued on its painful way, culminating at the ehd of last July. The recent decline in which the Dow-Jones Industrial Average (but not the br;oad-based indices or most stocks) carried on to still lower lows, is also explicable in the l,ight of renewed uncertainty as to the prospects for 1970. As we approach the new year, in fact, uncertainty'l is the keyword. No less an authority than Dr. Rinfret assures us that There ain't gonna be no recession, thus proving that bad grammar is equally as quotable as good economics. Dr. Friedman, on the other hand, warns us of the possibility of a serious r'ecession unless a 90-degree reversal of present monetary policy takes'place almost immediately. Stock prices, obviously, are not going to move up very much until it becomes possibl to see into 1970 more clearly. The salient fact, however, is that a good deal of potential economic difficulty has been allowed for by the Dow-Jones Industrial Average being some 200 points under its level of a year ago. The saw about the market's not discounting the same thing twice will be relevant in making a. 1970 forecast. i ,. Dow-Jones Ind. 786.69 Dow-Jones R-ils 173.06 ANTHONY W. T ABELL WALSTON & CO. INC. AW-T'amb This mnrJ…('t I('lie! is l,uhh.,hL( fnr your ,'OIWo.'IlICnf'e .-Inll InrOlmabnn ,'nd not ,In offer to ,wll 01 .1 formation \HI' oiJtrl.lll('d flom \\.(' 1,.'111'\(' to It'itnlri,, hut do not l'l'ulIr,inte;;, Its ,lrCUrolC emploYL'l'S may have an mterest m or pun'hnse ,md ;,ell the ;,'I Ulltll';, lcfl red to hC1L1n to huv ,lin WIlI;ton & Co. Ine fln,l It.., The 111ullL'Clors or WN30t '''-'

Walston &Co. ———lnc——— Members New York Stock Exchange and Other PrincIpal Stock and Commodity Exchango. OVER 100 OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER December 19, 1969 The forecaster has an opportunity, as 1969 draws to a close, to make his usual an- nual prediction even more ponderous than is normally the case, for we are now entering, not only a new y'3ar, but a new decade, and such htles as The Shape of the Seventies have been common headings on publications emanating from Wall Street. The question of a long range forecast for the seventies is, indeed, an interesting one, and we will touch it briefly. Let us first, however, dispose, if we can, of the new decade's first year. We devoted last week's letter to a discussion of the 1969 decline and to characterizin that decline as a bear market experience.-Ifone is-w-illing to admit that 1969 was, in fact, a typical post-war bear market, the next logical question is What has been the aftermath of previous such markets The answer is simple and quite fascinating. The Standard & Poor's 500 had, at last week's low, declined some 19 from its 1968 high. It had done this just five times previously since World War II — in 1946,1948, 1957, 1962 and 1966. It is interesting to note where the market was one year after each of these declines reached the 19 figure. In one case (1946-7) it was about unchanged. In the – other four cases it was substantially higher by amounts ranging from 40 in 1949-1950 to 24 in 1966-67. Couched in terms of the Dow, a duplication of this experience would mean an upside target for this time next year of between 945 and 1075. Now, the above is obviously a simple exercise, and a forecast for the next year should obviously be based on a number of much more sophisticated tools. We must confess, however, that we cannot understand why most the sort of histori- cal experience cited above in looking into the next year. W)0nstrongly suggests that 1970 should be a fairly good t ty e above reasoning and that it is incum- bent upon anyone who forecasts otherwise to docume1j\t the ic economic situation is anyway different today than it has been for to be sure. There always are. But e 'historicaf record is difficult to ignor. Wh' –Iql\aPte ntury. There are differences g 'on of higher prices impl,icit in the otner words, th'a'n-970 coillc)'wello-e a good year for the stock Having said this, we w re is'S ill not pointing out what seems to us one striki recent change in mar t a en three years and ten months since the Dow-Jones Industrial Averag igh. The record length of time without a new high in the past 25 years wa 0 y in 1946-1950, and since a new high in the next three month is hardly likely, 1966- 9 set a new standard. The Standard & Poor's 500, admittedly made a new high just ear ago, but even in this average, the upswings have noticeably moderated of late. What we are saying, of course, is that there is evidence that the long-ter secular uptrend which characterized the 1950' s and early 1960' s may well have flattened out. It could not, of course, have continued indefinitely. The whole 1949-1961 bull market was, in essence, a period in which the multiple placed on the earnings of the Dow rose from under 9 to over 24. The past decade has, in a sense, been a correction of this rise in price I earnings multiples to the extent that at last week's low, the Dow was selling for less than 13 times its latest reported earnings, or lower than it had been since the early 1950' s. The fascinating dilemma for the 70' s, to us, centers around how much longer the in- vestment community will continue to re-evaluate the appropriate price to be paid for earn- ings. If the wheel were to come full cycle, and we to return to 1949-1950 levels, quite obviously the outlook for the first part of the decade would be somewhat less than glowing. It is arguable, however, that the multiple correction,atleast in the Dow, may well be com- plete, and that pIE ratios generally may firm at around this level or even improve. For the broader Standard & Poor's index, which is more heaVily weighted with the growth favorites of recent years, the question is more difficult to answer. For here PIE ratios are somewhat higher on an historical basis and thus more vulnerable. The question for the 70's then, is not earnings. We continue to be bullish about the long range future of the American economy, and thus about profits. The real question is whether a decade-long re-evaluation of profits is complete. If it is, the outlook for the comi decade could be pleasant indeed. ,,' Dow-Jones Ind. 780.76 Dow-Jones Rails 170.20 AW.Tamb ANTHONY W. TABELL WALSTON & CO. INC. A VERY MERRY CHRISTMAS TO ALL, Thl; mnrket kttcr IS pubhshcd for )our l.on\emence and mformatlOn and 1'1 not iln ofT'l to jell 01 ,\ soliCitation to l,uv .my 'CI'UllttC& dl'CU'lsl'd The in- formatIOn W.I'! obt,I1nt'rI from sru1r('l v.e I'hcve to I.e rt'h,lblt, hut we do nut. gu.lrnnt!.(' Its \\',11..1011. & Co.. InL ,mrl Ill'. officels, dhl'Ctors OJ employec'! rna. have an mterest m or PUI chase and sl'll thc SCI UIIlw I efer! i'tl lo hell'1Il WNsot

Walston & Co. Inc Members New York -Stock Exchange and Other PrinCipal and Commodity Exchanges OVER 100 OFFICES COAST TO COAST AND OVERSEAS r TABEll'S MARKET lETTER December 26, 1969 For some years now, we have Stud1ed the familiar seasonal tendency of the stock market to stage a year-end rally, and it has been the custom of this letter each December to point ant some of the conclusions that can be derived from a study of this phenomenon. We have suggested that an exhaustive study of chart patterns since the Dow-Jones Industri Average first was computed in 1897 indicated that such a rally, however minuscule, invariably had taken place. A number of interesting facts about the market action of the year end may be noted. (1) – As state'd above, an 1dentifiable year-end rally has taken place in every year since 1897. This.iaily oiten.has I having been reco-;'-ded. It also, on occasion, has continued with only minor interruptions for as long as six months into the new year. However, on other occaSions, it has been of only a few days duration, reaching a top extremely early. Thus, in 1960 and 1962, the rally reache'd a peak in the first week in January. In 1961, 1964 and 1967, it continued in- to Februa;y or March. In 1965 and 1966, the rally peak was reached in early February. (2) – There has been a persistent tendency for the rally to begin early in years when the,market has been up, and late in years when the market has been down. In recent upw,aI rd years, 1959, 1963 and 1967 are examples, the rally commenced from early Decembe IIn 1962 and 1966, it began late in the year and 1969, a downward year, was no exception to /this rule. (3) – The important thing to watch in connection with mamt action in the early months of the new year is the low for the previous forty-two years out of the past seventy. However,,1n twe t – 1 lOw has been broken in a se forty-two cases, it was broken in January and February. Smce e en broken later than mid-March. with the single exception of 1965. the rket is able to hold above its December low for the first 2 1/2 year ances become good that this low II, will not be broken. For example, January 19-6-0-,- ana Ja.nuary ecember low was broken early in -64 and-i91J'r1Cnever was broken. 1-9-6-5;– as noted above, was cew. 1964 low of 850. 19 being broken in June when the Dow reached ow' 832.74. (4) – In y s e e er low has been broken, the subsequent trend has been downward two i s 1me. 1960, 1962, 1966 and 1969, of course, are typical cases. Again, 1965 as xception. (5) – The ma de of the rally 1S an important clue as to the year's market trend. For example, an advance of 10 or more from the December low has been followed by an upward or neutral market in twenty-nine of the th1rty-four years that such an advance has occurred. An advance of less than 10 from the December low before an identifiable cor- rection takes place has been followed by a downward market in twenty-three of the thirty- five years. In 1961, 1963 and 1964, the year-end rally approximated 10. In 1960, 1962 and 1967, for example, it was less than this figure. (6) – The length of time in which the rally continues into the new year also is important. For example, 11 eighteen years the rally continued into March or later. In sixteen of these eighteen years the eventual trend was upward. In 1964, the year-end rally continued into March and in 1961, 1963 and 1967, into February. In the coming year— therefore, the Decemberlow -of 45 'is-an important point to watch. If the present rally tops out in early January and breaks this low, it would be stron indication of probable market weakness. A like indication would be failure of the Dow to advance 10, or to approximately 840. On the other hand, if a rally continues into Februa or March, or reaches above 840, an extension of the upswing might be indicated. ANTHONY W. T ABELL – HARRY W. LAUBSCHER WALSTON & CO. INC. WE WISH YOU ALL A VERY HAPPY NEW YEAR Dow-Jones Ind. 797.65 Dow-Jones Rails 176.90 AWT J-WL at ThIS mllrkct letter LS for Hnd Inform1tHlIl lind not ,til otrl) to CmmatlOn obtalne,1 from we ht,llc\, to I'l' 1,,1)1111' I,ul ….. l ,J not gulll,lntec Its emJ)toycl'S rna have nn Interest In 01 pur('ha'l ,wi the '-.ClUlllw left'lred ttl her!!ln. — or ,\ RohllLlimll to hu\ In\ '!,.'Ulltll .W.,btnn 8.. Cu. Inc' lIu,1 It.. —;0 . u The In. '(lors or WN.30