Viewing Month: February 1970

Tabell’s Market Letter – February 06, 1970

Tabell’s Market Letter – February 06, 1970

Tabell's Market Letter - February 06, 1970
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Walston &- Co. Inc Members New York Stock Exchange and Other Princ'pal Stock and Commod,ty Exchange. OVER 100 OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET .LETTER February 6, 1970 Continued weakness set the tone much of last week. There was, it is true, an interruption on Tuesday as Secretary Kennedy's remarks on the possibility of imminently easier money sent stocks spiraling upward on the heaviest volume of the year. Strength continued in Wednesday's first hour, but it gradually abated and the market began drifting lower on light volume, continuing this drift in Thursday's trading, although a mild rally lifted prices on Friday. The rally following Kennedy's remarks, despite its impressiveness, did not have the e.versaL It a,fter a heavy. ;vave of selling, but after a morning of low volume drift.The-facnhat volume increased on the upsiae is, of course, perfectly– .. – normal. Contrary to folklore, normal market action is for volume to increase on rallies and dry up on declines, just as it has been doing all the way dow,n in this current trading se- quence. Increased volume on the downside generally is the first stage of a climax reversal and indicates that a bottom in time, at least, is quite near. The stage is now set for just this sort of climax reversal, and with the market's current deep-oversold condition, the likelihood of an occurrence of this sort is fairly good. There are various indicators used to detect and measure such a phenomenon, some fairly complex. However, the general symptons are (1) The market sells much lower on ex- tremely heavy volume. (2) A period of firmness occurs with volume continuing high. (3) A sharp turn to the upside takes place also in heavy trading. If the market follows this se- quence, we shOuld at the present time be fairly close to point from a time point of view, although the turn could take co id 1 er prices. Consider ing the speed with which climactic bottoms usually Y!la ow ,it would seem to behoove the long-term investor to adopt the policy sugg'eAted i last letter and be a buyer of stocks on any further weakness. '\/ Now, it is, of course, -sequence.- t cur without the usual selling climax -e'ThJatlie presentinstance;-l5ut-certainly not– impossible. We would, place on light about following it t n m' he r less confidence in a reversal which took . ss nil' be inclined to be considerably less aggressive I me washout should occur. There are, r I o s which fall to the market technician at around the time of a bottom reversaL he' is determining that a reversal has actually occurred; the second involves asses the quality of the subsequent rally. The distinction is important, A phrase increasingly eing heard these days is rally in a bear market. We think that the investor who states at this point that the next rally will only be an interruption to a bear market is ill advised, The only way to determine whether an upswing is a rally in a bear market,or the start of a new bull market, is through an inspection of the upswing itself. For the aggressive investor, the only solution is to invest when the signs of a reversal become clear and to make appropriate adjustments if the subsequent rally appears weak. The more conservative can await a definite confirmation of a new upswing, but should realize that this confirmation will take place at higher prices. At this point, one additional observation. Every bull market in the past has begun initially with a covey of Cassandras assuring us that it was only a rally in a bear market. If this feeling appears widespread -on the next rise it will, in our opinion, make the outlook that much more optimistic. We would, therefore, be buyers on weakness. Whether we will be buying for an intermediate term rally, or a major bull market, we do not know a s yet. But it is a problem we would prefer to approach holding equities rather than holding cash. j ANTHONY W. TABELL Dow-Jones Ind. 752.77 WALSTON & CO. INC. Dow-Jones Trans. 135.27 II AWTamb Thlf; ml\rkct letter lq Jluhh …herl for f'onVl'nl'n'c llIul rnf(lrmatlOll ,Ind I Ilfl .. n ITer tn sdl 01 It OIlI'lt.1.tIOIl to buy an (hs,usql'rl The In- rormllllOn woo, obtmned from …. \\(' hf'll('v,' to he 11.'11.11111.'. hut We do 1I0t gu.lrantee Its ,I('('UI!\'Y W,II;ton l\. Go, Inc nml Its officer,, ,hrl.'('toTq OT employees mny have an Intf'rest III 01 anri sell the … .. T('rL'rle.1 to hellll WN.SOI

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Tabell’s Market Letter – February 13, 1970

Tabell’s Market Letter – February 13, 1970

Tabell's Market Letter - February 13, 1970
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I W—-a–l-s-tIonnc–&–C–o–. Members New York Stock Exchange and Other Principal Stock and Commodity Exchange. OVER 100 OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER February 13, 1970 For the time being at least, the area between 740 and 760 on the Dow continues to contain the market. The week's trading action saw both levels approached with a mid-week decline to an intra-day low of 739.90 followed by a rally which took the average to 762.28 on Thursday. However, the rally was unable to hold in Thursday's and Friday's trading. As noted in last week's letter, in the absence of a recognizable selling climax, we would con- tinue to be cautious as regards the near-term outlook. We continue to think, however, that market weakness would offer an excellent opportunity to make long-term purchases. One attractive purchase candidate is reviewed below. — – -'.. 'CORPORATioN Current Price Current Dividend Current Yield Lon g Term Debt Common Stock Sales-1969-E Sales-1968 Earn. Per Sh. 1969-E Earn. Per Sh. 1968 Mkt. Range 1969-1970 26 3/4 0. 20 O. 7/0 40,235,522 3,112,940 shs. 210 million 189.6 million 1. 70 – 1.75 1. 42 34 1/8 – 20 1/8 Having long occupied the wrong-slde-ofthe-tracks position m the beverage industry, beer has been substantially upgraded socially in recent years, and there is every indication that this trend not only will continue but ac- tually accelerate. Sales of competitive beverages, soft drinks and distilled spirits, have recently grown at a much faster rate, reflect- ing not only the higher standard of living enjoyed by most Americans, but also in consider ation of other hand, e On the dustry has made greater percentage of white-collar workers on their i sling women and a 'ous pr ts beer, malt liquor and other types of malt beverages. Combining fort . t ains derived from normal at- trition of smaller breweries going out of bus as r ted in a definite upturn in the -growth rates'for'the to be Rheingold Corporation. Formerly PUB United, h W 0 at this-time-would.appear- – y' eleventh largest factor in the industry. It is organized on the 0 e e olding company supervising four operating subsi- diaries. One is in marketing products in the Eastern USA and in Rico. Principal pro tare mgold, Ruppert-Knickerbocker and Gablinger's beers. The other subsidiaries are 'n soft drink field, selling their major product, Pepsi-Cola, in Los Angeles, Mexico and Puerto Rico. Rheingold Corp. is the world's largest fran- chised bottler of Pepsi Cola. The results of Rheingold's reorganization effort under new management only a few years ago can best be determined by a review of the recent earnings history. In 1967, net dropped sharply to a deficit of a share, from 1. 73 in 1966. In 1968, income rebounded to 1. 42 a share, followed by a further jump in 1969 to an estimated 1. 70-1. 75 a share. The outlook for 1970 calls for still further improvement to around the 2.10 level. Manage- ment now feels that the company has passed through the transitional period of ascertaining and solving fundamental problems. It also feels that its leading product, P,heingold Beer,not I only is maintaining its No. 1 position as the largest selling beer in metropolitan New York, 4but will be successful in its expansion plans for other regions. Expansion should not pose a problem. Total capacityapproximates 5 million oarrels and annual sales for 1968 and 196 probably averaged 3.5 million barrels, allowing for substantial increases without additiona capital expenditure. Why Rheingold rather than the other leading brewers Fundamentally, Rhemgold seems to represent the most inexpensive in the group. Based on the estimated earnings for the 12 months ending March 31,1970, one leading financial service gives Rheingold a price,' earnings multiple of 15, compared with 26 for Schlitz, 22 for Pabst and 34 for Anheuser-Busc Technically, RG' s chart shows an area of congestion between 30 and the low 20' s that has formed a favorable base area. This base permits the projection of a price objective at 38wit a higher goal readable in the mid-40's. NOTE Robertshaw Controls (33 1/4) is being removed from the Price Appreciation section of our Recommended L-ist-It-was originally recommended in March 1966 at an- adjusted pric LT of 17. Dow-Jones Ind. 753.30 Dow-Jones Trans. 170.82 HARRY W. LAUBSCHER-ANTHONY W. TABELL WALSTON & CO. INC. Thill mRrket letter is ,'I(or )'our .nnv('menf'(. IlIl1J mlmm/li''' .1m! lwt .tll ,,(ft. j sell QI ., ..IU'It/lll/m to ,uy .'In) .'wl'unll.'1. dl'wusstod The 1/1- (ormation WRS olotlunNI ftoln MUlCt'! we ill'hl'VI' tn l)e rdlllhil'. hut Wl' do not gtJlIlltnce Its … ur,\('y & Co, jn', find offtcers, drrl'Itorb nr bemployees may have an mi.ercBt III or PUTfhll'l' ,md '(!II the to herem WN301

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Tabell’s Market Letter – February 20, 1970

Tabell’s Market Letter – February 20, 1970

Tabell's Market Letter - February 20, 1970
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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 O't'ERSEAS TABEll'S MARKET lETTER February 20, What the stock market desperately needs at this point is an event. 1970 An event, it should be explained, is one of those dramatic news items which seem to have a penchant for occurring at major stock market bottoms and WhiCh provide an ex- cuse for anyone who, prior to the event, was sure the stock market was going lower, to rush out and buy stocks because they are now, with equal certainty, going higher. The one common characteristic of events is that they have absolutely nothing whatsoever to do with the stock market — at least on a near-term basis. Their major function is to serve as an excuse for.the market to do what it was in.a the-firsLplace ……– The reader will no doubt recall a few of the more memorable events which have occurred at past stock market bottoms. The most recent, of course, was President John- son's speech prior to the April Fool's Day rally of 1968. The market's mood at that point was one of profound concern over Vietnam. Despite the obvious fact that our disengagemen in Vietnam was going to be tortuous, the market responded by immediately going through the roof. Before that one, another Johnson speech constituted, for our purposes, an event. This was the January 1967 State-of-the-Union Message when the tax increase was first proposed. The market at that point was preoccupied with inflation and the tax increase (which, incidentally was not enacted for over a year) was supposed to be a palliative. The market skyrocketed. Gomg back further in history Missile crisis which accompanied the bottom in 1962 as ev to recall the Cuban sltnilar proportions. Meanwhile, the present market, starved 0 thO ort, is forced to in- vent them. Earlier this month, for example, it a m al drop in the prime rate which brought about a 10-point rally. Latel has\taite going up in response to speeches by assorted economists wh as r at' money will, at some nebulous –1 Dow. One of th h t the moment, it is difficult to see just what the event that will tur ght be. The major preoccupation at the moment is tight money so that it wo b 1 al to expect that somethmg havmg to do with the relaxmg of monetary strictures m' provide the upward spark. The problem is, of course, that a relaxation of moneta policy is unlikely to cause a single dramatic happening productive of banner headlines. The Fed is not going to signalize a return to easier money by opening the windows and shoveling dollar bills out into Liberty Street. A drop in the prime rate is not expected before mid-year, and, in any event, this would be as much a symptom of re- duced loan demand brought about by previous tight money as an indication that monetary stringency was truly being relaxed. Furthermore, monetary figures,because of their extreme fluctuations, are difficult of interpretation and it is doubtful that we shall know, fo a certainty, that money is truly easier until a number of months after the fact. We find it necessary, therefore, to continue to express the near-term skepticism regarding the market that we have evinced over the past few weeks. The scenario is set, quite obviously it seems to us, for an important reversal in the 14-month-old stock market downtrend — one that will surprise the investment community with its vigor. It may very well be accompanied by an event such as those referred to above, which will provide the public with a convenient rationale for deciding stocks are a buy rather than a sale. Whether such a turn will occur here or at somewhat lower levels, however, is something that still remains to be seen. Dow-Jones Ind. 757.46 Dow-Jones Trans. 170.76 ANTHONY W. TABELL WALSTON & CO. INC. AWTa'Ub This market letter Is published for your convenience and mfOMnntLOJ'l Rnd IS not an offel to SI.'U or R soliCitatIOn to buy Rny secunllefl uiscussed. The In. formation was obtained from sources …. e hf.'heve to be rehable, but we do not KURrnntee Its nccumcy. Walston & Co., Inc. and Its officers. directors or employees may have an Interest in or J)urchase and sell the SC!.'Ufllus to herein,

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Tabell’s Market Letter – February 27, 1970

Tabell’s Market Letter – February 27, 1970

Tabell's Market Letter - February 27, 1970
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Walston &- Co. —–Inc —– Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OVER IDD OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER February 27, 1970 We noted in last week's letter that what the stock market desperately needed was an event which would provide it with an excuse to develop some upside impetus. This week it invented just such a happening, seiZing upon the flimsiest of excuses to stage what, it must be admi ve performance. '. On'Wetlne'sday; a-tiny bajik-in Philadelphia announced it was reducing its prime rate. Never mind that the bank in question had assets of less than 50 million or that, properly understood, a lower prime rate is not particularly bullish anyhow. The response was electric, converting what had been a trendless session into almost a 14-point gam. On Thursday – when' major .banks -condemned the rate reduction,' the-'-Dow droppe-d support at 760. It held there for a while, and then moved up inanl8-point rally Thursday afternoon and Friday to an intra-day high of 784.19. – Whither away then Are we entering what will become known as the Lincoln National Bank bull market We are not at the moment convinced, but must admit that a scenario has been set in which technical evidence of a reversal could easily be provided. Let us start out by putting the 1968-1970 bear market in perspective. The decline to date has been 25. 60/0, and it can be separated into three distinct intermediate-term down- trends, as shown in the following table a 100/0 loss from December 1968 through February 1969, 800/0 of which was recovered by May; a 190/0 drop from May to July of which 440/0 had been recovered in November; and (to date) a 150/0 decline to the lows of last January 30th. So far, only 29 of that loss has been recovered. Date DJIA 0/0 Of Loss Recovered Date d 0 W Loss Cum. Lo ss Dec. 1968 994.65 – Feb. 10.0 – 10.0 May 1969 974.92 81 07 19.1 20.8 is, Nov. 1969 871. 77 44 – – –It possible to break each of t .7 739. 11 15.2 25.6 tp'e'l.ntermediate-term downtrends, which has so far constituted the mmor downtrends. In the case of the e 'nor downtrend in November-December from 871 to 764, a rise in Deb r 20, followed by another minor downswing to the January 30th low. Now, it is POSSl e 0 asure each of these declines and compute trend channels to determine when these t s have been declsively violated. The minor downtrend of January has, obviously enough, ended. Violation of that downtrend channel took place early this month What is currently interesting is the intermediate downtrend channel. The Dow is now flirting with the upper limits of that downtrend, and further strength next week would indicate that it, also, had come to an end. The longer-term downtrend channel — which has contained the market from December 1968 to date — is something else again. The upper and lower limits of that trend channel are, at the moment, roughly 818 and 711. The trend is down at the rate of, roughly, .67 points per trading day, and it could be violated either by immediate strength above the 800 level or by a lateral movement over, roughly, the next three months. Meanwhile, what about upside objectives for the current move The most optimistic readings possible are in the 780.785 range which coincides with.fairly heavy overhead supply situated around the 780-795 area. Were this supply successfully to be negotiated, a substan tially higher target somewhere in the mid-800's could be projected. Under these circumstances, we could be greatly encouraged by strong technical action over the next two weeks. This could conslst of a decisive push into the 780-795 supply and a period of backing and filling without substantial decline. This would do two things. It would, first, bring the market out of the intermediate-term downtrend channel which goes back to last November, and it would broaden the base for a further upside move which might, some- time this Spring, decisively call into question the continuance of the long downswing which has characterized the market for 15 months. Failure of the current test, however, could, at the very best mean a renewed assault on the January lows. Dow-Jones Ind. 777. 59 Dow-Jones Trans. 177.58 ANTHONY W. TABELL WALSTON & CO. INC. ThIS mllTket letter 113 publisher! for YOUI an.1 IllfolrnntlOn lind 1'1 not .In offt't to 01 It '10Iultllt(On to I,uy ,til) -.ccuntJes The in- formation WR'I obuuned from we hd,c\l' to be rehnil\l', but we ,In not gll,lfantee Its u'rUI!l('Y W,I\ston & Co. fnl' and It'I officels, 111It.CtorR or A W T ' a m bemployee9 have an Interest In or !JUr('hn-,c ,wd 011 the ..,. I Ullll' 1..,(. rI ell lo helelll. WN30l . ., . ..- … ,, , Hi ili …..

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