Tabell’s Market Letter – November 06, 1970

II,'I , / /.' -. .. ,/' '/ (t ,'(,'.1'. .JOg STAT, rOAD PfHNcrTON, KW J.ERSEY 0851,0 tllvlS10t Of' IH STOCI' f XCHA'I;a; November 6, 1970 We hQve in recent lssues of this letter, on the theme that ;tock se\ectlon is, in most C,Jses, a far more Impc.ital't ingredIcnt of invc–'stment success than guesses as to the course, often not foreseeable, of the market J. whole. It IS (-1 lesson easIly forgotten, especially at I a tIme like the present v/llen l11t- market ouUcor. IS, at best, c.louded. Yet It is one that can easlly he reenfcrced statlstlcally. I For example, we have now only partially recovered from the severest bear market of the past four decades. Yet it wouJd have been quite possIble to have purchased a portfolIo of stocks at the very top of that bear m.)rlct and tlll have a respectable profit today. Tne follovllng table, based on Standard & Poor's group mdices sho\…s the performarce of the best actll1CJ 20 Qut of 91 groups from theIr average , pnce of Decen1ber, 1968, tile monih the TiJmk0t made its hIgh, to the end of lost month. Cha1l2…. F/58-JO!(1 Change 12!6G-JO/70 12/68-10/70 Chan.9.12!G8-JO!70 I 0 ;, FollutioJControl 35.3 MAil Order ClectriculEquip. -4.3 Brewers -6.8 Coul 28.9 Soft ..rink.s 4.2 Au Conditioning -5.0 AppllanC'E's -8.1 C03metlcs Vt'lrietyStoreb -3.7 -5.1 Nat'IGilsDISt. 10.7 S02lPS -12.4 Mobile Homes -5.2 Nat'l Gas PipeL -10.4 DJ ugs 5.9 HetalJ Stores -2.4 Packaged Foods -6.6 Grocers -11.2 It Is an mtcresl.lng t6.Duta1wn. The best perfOlming nine arc actually up for the period. The toptcn show Q 10 aV12fug0 gain, anrl the group ao., .l '111101e shows a 2 average proht–a reasonably cum- mEndable perJOlmance the marh.0J environment. Nuw the above comments may be justly cnticized on th'e bosis that they are, after all, hmdslgbt, but they me not entlrely an cyercise. Let us suppose, that, in May, 1970, the investor had deClded that an mtermedwte hal been and had sought to construct a list of purchasE's. Let us suppose, morcover, that he arbltranly ;dected the tVIE'l1ty groups that had gone down the least if the bear market. The selE'ctions ;'u1d have been the group', in the table below t which shows -pch c;mup's bear mcuket decline, hs pGrcentage advance from M,y to date, and its performance rank out of all 91 groups from May to du.te. ;; Cbilnqe lUG(l-S!/Q .!!Z7 0-Juirj nun)' Cnanqc Chunge J2/6&-5/70 0/70-10/70 Rank Blewero; 6.5 -10.4 88 Soaps -14.4 ;)9.5 22 Pollution Control .J 6. 3 ., 27.3 11 Pilckog9d 'oc.ds -1(.5 9.2 48 -0.5 12.9 38 Variety St01 C,3 -16.6 24.4 14 Drugs -6.3 1- 3.0 37 Leud & Zinc -8.7 86 Goal BiscUlt Bacry -11. 0 44.8 3 -12.4 1.0 J 75 El ectrical IqUlp. -17.7 Retell Stores -18,7. 16.3 30 24 Db1iJ1ers Air Cond1tioJllDQ -13.0 -13.5 ). J 9.8 19 44 Merals-M,sc. BUSiness I…1ach. -18.4 -19.0 ;7.8 9.0 54 51 Mail Order 8.1 4 Telephone -19.2 -6.1 83 CIgarettes -13.7 -128.2 8 Nat'l Gas Dist. -19.7 12.2 41 The results shov.fn by Hns rather SImple-minded rr,ethod are ImpressIve. The investor would have cho,s(m four of the top ten industry Groups based on subsequent. performance ano twelve of the groups chosen would have been in the upp8r 5090. The average gain of 111 would h.1ve been eminently re- spectable. ., The performance would, of C0l'rS3, not hnvc been Bf.. good as couJd have been ilchlevcd by perfect foreEnght. Tho twenty groups uctllally performinq best from May to date, vnth an average 31 gal'l, are ' shown belm';. J, Chi3nge Chcmgc 0- Change 5/7U-Date lvTobile Homes 2L70-Dte 5/70-Date 2L70-Date 85.9 Vending Macil, r-29. 2 Pollution Control of 27.3 Leisure Tlmc 23.3 .,' OJ – Crude Coal Soft Drinl-.s t57. 4 44.8 33.1 Oil Woll Much.; 2 B. 9 Gold Mlllln'J Cig,lIttes 12 B. 2 011 – DomestlC' Srn.ingc; &LOdn -127.9 Variet'y Gtorc 26.4 ROOlOg Wallbd 23.2 – ;5.5 Mall Ordcr 1-22.0 24.4 Appliances 21.4 ,. Oil Int' 30.0 Home rum. 27.6 Dl!.count Stores 23.1\ Rubber 19.9 Yet — a suggested in rhe leave — superior marlet uctlOn tends to persist over tllTlE' and abovc tables arc useful for man'! than hlstoflcal purposes. It is, 111 lIkely, bused on the record, tnal from the above llsts of above-average ,the market Jeaders of the conung months may well mcrge.. 1l,NTH 0 NY W. TAB IL L Dow-Tones a.m.)771.43 S&P (1100 a.m .. 04.08 DELF,JlELD. HARVeY, TI\BE!.!. AViT'mn ,) L tlo Sh, t t . r, 0- , .., , .. I C ,..,to ,/)ed' .,..!f ., k bv, ' vl ' 'o.y ,n I,' I'f '''I'' t-'! -,., v ,. r , 1 1,,- ,h (,,,,v ,,.he f,., or 'I.r r … Y h,l.. 11 c r'!,,,c Ihn w,eB ,','r .. … r'-,',. I u. 11.1 JL'L ,. 0 … t ,-.,..,,' ;. 1 'h, , .. Air' ,,,,'e .. … An. CKOO i.)., .'., rt…… ,''yI,, \ 0,',, ,, I ,1.'' ',- ' I , Jf ,,,, I ,', P'( 0,' .J'. ''', P' , n,t …. 'I 0. C,.., B J I ' ',11 'f ' 'I Itj,r I n.1 II, , 10, n,,' OM.\, ,n 'ty h) ff'fu,1 ,om CI,( f., ,.! .I ,VJ' Y I ,1'-, I 1 h, r 'Ill – '\ tI j n. 1 C. h I, ,'0. I, 'he 0 llu!-''nl aJv'lcr, mdY aJy, '(, ,, ,,' Iy, 'I d ,IrN C1,C'.. .,' I'V ny QI,' ,11 ,nil.)' Ir (r 'n ;….., C11,01 iJ'l .. – –