TABELL'S MARKET LETTER 909 STATE ROAD. PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE r January 7, 1977 The stock market tried, at least in the first few days of 1977 trading, to obliterate a 79-year01d record;. As we stated'in this space-last.week -and hav,e r,eiteratedin previqusstudes, an identifiable year-end rally has taken place in every year since 1897. Stated in more precise terms, this means that there has never been a case where there has not been at least one January close higher than the highest December close subsequent to the December low. The Dow posted its December peak on the last trading day of the year at 1004.65 and then spent the first three days of January moving downward before a recovery set in in early-Thursday trading. Thus, to date, at least, the year-end rally has not been extended into 1977, something that has invariably eventuated ever since the Dow-Jones Industrial Average has been computed. We find ourselves unable to become unduly worried about this behavior. Certainly, on a short-term basis, the market, at the end of December, was in an extreme-overbought condition, and at any stage of the game profit-taking was to be expected. We still feel, as we said in our year-end forecast of two weeks ago, that the market strength will extend itself at least into the early part of the new year. As we suggested in that same letter, it is whether the market will have the ability to extend that strength into the latter part of 1977 that constitutes the major question mark facing investors at this time. One possible clue as to 'Whether the market possessed the vitality to extend the advance which began in December, 1974 would be a broadening of leadership, and such a broadening of leadership has, in past bull markets, often been characterized by strength, in the late stages, on the part of secondary, more speculative issues. Throughout the most dynamic part of the upswing to date, leadership has been provided by the basic-industry, cyclical issues, which had, by the early 1970's, become undervalued in relation to the rest of the market and which were to -enjoy dramatic profit'improvement-a-s-the1-9-74- recovery-got underwaYT'Thus-,-the Dow ,which-con tained a great many such issues, outperformed the market in the early stages. As compared to the broader S & P 500, for example, the Dow, three days after it made its low in December, 1974, was selling for 8.8 times the S & P. By the fall of 1975, a few months after the market had peaked for that year, the Dow had moved ahead to 9.78 times the S & P 500. Thus, action during this period was largely concentrated in the sort of issue contained in the Dow. The Dow's best level in relation to the S & P in 1976 was scored on March 9 when it sold for 9.88 times the 500, a figure not too different from the fall-1975 relative high and the peak level to date. Ever since the first quarter of 1976, the Dow has been declining relative to the S & P and in early December sold at only 9.25 times that average. Thus, through the first three quarters of 1975, leadership was focused on the Dow. For the last quarter of 1975 and first quarter of 1976, the Dow and S & P performed equally well, and, since the first quarter of 1976, the broader S & P has been outperforming the Dow, thus suggesting some broadening of leadership. That leadership is broadening still further is suggested by the action of our Cumulative Index relative to the S & P 500. At that index's best relative level in 1976, it sold for 6.23 times the S & P index. Throughout the rest of the year it declined moderately on a relative basiS, but the past three weeks have seen renewed strength, and it is now at 6.31 times the S & P, its best relative level since the bull market began. Since this index includes all stocks listed on the New York Stock Exchange, the weight accorded secondary issues is proportionately greater, thus suggesting that these issues may have begun to show above-average market action. A final fact which may be worthy of note is the fact that, of all indicators, the Amer- ican Stock'EXChangeValuatlon-liidex moved, as of just yesterdayc- as a-matter-of fact, to its nesr— level relative to the S & P 500 since the bull market began. Both the Amex index and the Cumulative Index moved to decisive new highs early this week while the S & P was able only to equal its previous high and the Dow remained well below it. While all this may be but a straw in the wind, it is also possible that it constitutes the first phase of renewed interest in secondary issues. Such renewed interest could go a long way toward prolonging the bull market. Dow-Jones Indus'trials (1200 p.m.) S & P Composite (1200 p.m.) Cumulative Index (1/6/77) AWT/jb 979.64 104.82 664.06 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No statement or expreSSion of opinion Or any other matler herem contolned is, or IS 10 be deemed 10 be, directly or mdnec1ly, on offer Of the sohcltatlon of on oHer to buy or sell ony ecurlty referred to or mentioned The motler IS presented merely for Ihe convef'lence of the subscriber While we believe Ihe sources of our mformo- lion to b!! fellabl!!, we In no way r!!pres!!nl or guarantee the accuracy thereof nor of the statements mude herem Any action to be token by Ihe subscriber should be hosed on hiS own IOv!!sllgatlon and Informallon Janney Montgomery Seott, Inc. as a corporation, and Its officers or employees, may now have, or may laler toke, pOSitions or Irades In respect to any securities mentioned m thiS or any future Issue, and such position may be different from any views now or hereatrer exp'essed m thiS or any other usue Janney Montgom!!ry Scott, Inc, which IS registered with the SEC oS on mvestment adVisor, may give adVice to Its investment adVISOry and athel customers independently of any Ualemems mode In IhlS Of In any other Issue Further information on any secuflty mentioned herein IS available on request

TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON NEW JERSEY 08S40 DIVISION OF MEMBER New VORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGe – january 14, 1977 The past two weeks of stock market action can be. characterized by two adjectives, surprising ,.,;..andconfusing .. –…. -v-.w— L..,– — – -T-'-''''''''' The element of surprise stems from the known reliabllity of the year-end rally as a seasonal pattern. It stems, also, from the relatively short memory of most investors, whose most vivid memories are of most recent stock market history, I.e., 1976 and 1975. In both years, it will be recalled, the market took off like a skyrocket at some point in December and continued upward into january and February after which it spent most of the latter part of the year dOing absolutely nothing whatsoever. Clearly, the formula for success in those two years was to be long stocks as the year began, for it was in the first quarter that the bulk of upside action was concentrated. Apparently in expectation of the same sort of thing, investors spent the entire month of December, 1976, bidding up stock prices. Thus, the surprise when the market immediately turned down as the new year began. The confuSing aspect of the market arises from the fact that the major averages, as we tried to suggest last week, are, at the moment, giving a highly distorted picture of what is really going on in the marketplace. The Dow, which moved to a closing low of 968.25 on Wednesday before rallying sharply in Thursday's trading, was on a closing basis, then 36 pOints below its December 31 high. Yet, whlle all this was going on, no fewer than 461, or more than one of every five issues listed on the New York Stock Exchange, managed to post new 1976-77 highs in the week ended january 7th. On january 12th, the day the Dow achieved its low, 44 issues were, nonetheless, able to post new one-year peaks. Almost uniformly, all major indices of market breadth and vitality continue to show positive action. In market environment such,as this one, those who love to create reasons for stock market behavior have a field day. Since it was agreed almost universally by the experts that the market was supposed to go up in the first two weeks of january, there must, so the reasoning apparently goes, be underlying factors which were not taken into account to explain why the market moved in the opposite direction. thus, two ';;-idely-cIted reasons'Ior the'market's-ffio,hng-,ioi;t last week were'i)ai'fse' in-tne wl'lol-eSaIe–'-h-.,,-, price index and 2) disappOinting earnings on the part of one of the Dow components, International Paper. As usual, we remain unimpressed by reasons of this nature. It is only necessary to look at the record to see that we have had plenty of good markets in the past in the face of rises in wholesale prices and, whlle disappointing earnings may well account for International Paper's moving down, we fall to see why this should apply to the general market, especially since, by and large, fourth quarter projections remain reasonably good. The accession of a new President, especially one such as Mr. Carter whose intentions remain somewhat enigmatic, provides a fertlle environment for the professional creators of reasons. It can be sagaciously explained, a) that the market went up because Mr. Carter's economic programs were going to stimulate the economy or, b) that it went down because the very same programs were inflationary, depending, of course, on which direction the market takes. We have no doubt that the spring of 1977 will constitute a period in which each and every move on the part of the new Administration is seized upon as a reason why the stock market is doing whatever it is, at the moment, doing. As technicians, we continue to prefer to ignore the so-called reasons for market action and allow the market to tell its own story. It is, to date, at least, despite a still rather mlld downswing in the popular averages, indicating robust good health. Quite obviously, the weakness of the first two weeks of 1977 could be the start of some sort of market deterioration. There is, however, absolutely no indication at this point that such is the case, Meanwhlle, as far as downside targets are concerned, most logical objectives center around the 960-950 area in terms of the Dow. This area was touched on an intraday basis on Wednesday,but we would not be surprised by asl1ght fuftherpenetration. Thts area'colncldes-with'fairly-strong support from'the – I October-November base. Of course, since a decline bottoming out in the 960-950 area would appear the most plausible action, there is always the possibility that the market will again do something surprising, something in the vein of the false downside breakout of last September or the non-existent january rally of the past two weeks, Such a surprise could easlly take the form of a downswing which, temporarlly at least, moved lower than expected. Absent more convincing evidence of market deterioration than has yet been seen, however, we would counsel against being panicked by such an eventuallty. Dow-jones Industrials (1200 p.m.) S & P CompOSite (1200 p.m.) Cumulative Index (1/13/77) AWT/jb 972.07 103.89 662.95 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No ltotement or expreSSion of OPiniOn or any other mOiler herein contained IS, or IS to be deemed 10 be, directly or indirectly, an offer or the solicltallon of an offer to buy or sell any eunly referr 10 or mentioned The motter IS presented merely for Ihe conVef'lenCE of the subSCriber While we believe the sources of our Information to be reliable, we In no way represent or guorontee the accuracy Ihereof nor of the statements mude herein 1ny action to be toen by the subSCrIber should be based on hiS own Investigation and Information Jonney Montgomery Scol1, Inc, OS a corporation, and Its offlcer& or employees, may now hove, or ma\, later toke, P011tlons or trades 111 re1pect to any seCurities mentioned 111 thiS or any future ,ssue, and such pOSitIOn may be different from any views now or hereafter e)rpressed 111 thiS or any other Issue Janney Montgomery Scott, Inc, whICh IS registered With the SEC as on Investment adVisor, may give adVice to Its ,vestment adVisory o'ld other cusomers IIldependently of any statements mode, thiS or 111 any other Issue Further Informallon on any security mentioned herein IS available on request

, TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW VORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE Tanuary 21, 1977 We cited in last week's letter the fact that the Wall Street Tournai chose to ascribe one -particularly bad'stock-market 'day 'a 'forfnight ago tothe-reporting'oflower'earningsby one-of,the Dow'com- ponents. On Wednesday, the Tournai's lead article was entitled Bottom Line Blues, and It named a host of companies whose fourtlHjuarter earnings were likely to be disappointing, raising, in the process, the question of what effect the disclosure of these earnings might have on the stock market. We have always had the greatest respect for the Tournai's financial reportage, but we must confess to some degree of skep- ticism as to the effect of quarter-to-quarter earnings changes as far as the stock market as a whole is concerned. Although we personally belong to that small minority of analysts whose professional special- ty is the analysis of price action, we have never felt that the huge resources devoted by the financial community to fundamental analysis were less than worthwhile. Indeed, we have always subscribed to the belief that stock prices, over the long run, are a product of a stream of future earnings and dividends. There is, however, another factor that goes into the determination of prices. That is investor confidence, which, in one sense, can be expressed by the amount the market is willing to pay at a given time for a given dollar of earnings. We think it can be documented that this latter is the more important variable in determining stock price changes over the short-to-medium term. We have buttressed this thesis by a recent study. If earnings and stock prices both change in the same direction over a given time period and the earnings change is equal to or greater than the price change, then It can be said that all of the price change can be ascribed to the change in earnings. If both price and earnings change in the same direction but the price change IS less, then only a portion of the price change can be ascribed to earnings change,and the rest must be ascribed to a change in price/ earnings ratio. If earnings and prices move in oppOSite directions, then, obvIOusly, the entire change is ,due–to acha nge-ininvestor confidence. ,Our studyexamwedthe, quaderto-,quartero priG.echange9.nthe, , ' Dow starting in 1930 and compared it with the quarter-to-quarter earnings change. In 84 of 184 quarters, changes in the P/E ratio explained 100 of the change in stock prices during the quarter. In only 47 quar- ters were earnings changes able to account for the entire price change during the quarter. On average, changes in the P/E ratio accounted for 62.7 of all quarter-to-quarter price change while earnings changes accounted for only 37.2 of quarter-to-quarter price change. The results holo good even when longer pe- riods are examined. In 22 of the past 46 years, all of the change in prices on the year has been explained by a change in multiples. As we all recall, this was especially true in the last three years, when, in 1973 and 1974, the market declined sharply in the face of rising earnings, after which It rose in 1975 in the face of sharply lower earnings. Changes In the P/E ratio have accounteo for 62.4 of the annual varia- bility of the Dow and changes in earnings only 37.6. Another way of determining the relative impact of earnings changes and P/E ratio changes on the Dow is to undertake the following exercise. Envision two hypothetical analysts whose task is to fore- cast price change over a given time period.. Suppose that,in the beginning of each period,one analyst has exact foreknowledge of what earnings are going to be for the period. However, he has no means of ascrib- ing a proper P/E to these earnings so is forced to use the P/E ratio for the prior perio,d. Let us, by contrast, take another analyst who presumes absolutely no foreknowledge of earning-sbut who somehow is able accurately to forecast the P/E ratio which will exist at the end of a given period. For his earnings estimate, he simply uses the latest twelve months earnings — in other words, assumes no earnings change whatsoever. We compared the results of the two above approaches on a quarter-to-quarter basis starting in 1930. The analyst who wasable to forecast the,P/E ratio at the end of agiven quart,er,and used I'.e, –earigs ending- at thebeginningof that quarter hadan'av'eragefo-;'cast error of 5. 62' By'contrast, 'the -, hypothetical analyst who was able to predict earnings with 100 accuracy but who applied the previous quarter's P/E ratio thereto had a forecast error of 8.15. On an annual basis, foreknowledge of the P/E ratio for the next year coupled with no foreknowledge of earnings produced an annual forecast error of 19.5. The forecast error for the oppOSite case was just under 24. All this only reinforces a point we have made for some time — that Investor confidence is a crucial ingredient in determining the intermediate-term course of stock prices. We suspect the present market has reached a point in the cycle where such will be particularly the case. We hope to have the opportunity to discuss this In future issues of this letter. Dow-Tones IndustrIals (1200 p. m.) 957.70 S & P Composite (1200 p.m.) 102.81 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL Cumulative Index (1/20/77) 665.05 AWT/jb No statement or expreSSion of opinion or any other moiler herein contolned IS, or IS to be deemed to be, directly or Indirectly, an offer or the soliCltotlon of on offer 10 buy or sell any seC\Jrlty reFerred to or menTioned The matter IS presented merely for the conver'!ence of the subscriber While we believe the sources of our IMforma tlon to be reliable, we In no way represent or guoronteB the accuracy thereof nor of the statements mude herem Any oellOn to be toen by the subSCriber should be bosed on h'5 own ,nvest.gat,on and Information Janney Montgomery Scott, Inc, os a corporation, ond Its officers or employees, may now have, or may later toe, POSitiOnS or trades In respect to ony securities mentioned In thiS or any future Issue, cnd such POSition mav be different from any views now or hereafter expressed rn thiS or any other Issue Janney Montgomery cott, Inc, which IS registered With the SEC as on Investment adVisor, moy give adVice to Its Investment adVisory and othe. customers Independently of any statements mode In Ihl5 or In any other Issue Further information on a'ly security mentioned herein IS ovallable on request

TABELL'S MARKET LETTER 909 STATE ROAD, PRtNCE1'ON. NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE January 28, 1977 – , .-We attempted in this space last w.eek to advancethe.thesis.that changesin.itlvestorcon- -. fidence, symbolized by the price the market would pay for a dolla r of earning power, tended to exert a more powerful effect on the short-to-intermediate term course of stock prices than did changes in that earning power. We concluded by VOicing the suspicion that the market had entered a phase where this would be particularly the case, Certainly it has been the case over the past year. Earnings on the Dow-Jones Industrial Average hit their recession low of 75.47 in the year ended September 30, 1975, when they com- pleted an almost-25 drop from a peak of almost 100 a year earlier. Since that time, earnings re- covery has progressed nicely. The Dow earned 95.81 for the year ended September 30, 1976, and, although the recent economic slowdown may dampen December somewhat, a recovery to above the 100 level should take place shortlY,and, indeed, according to many analysts, an earnings level of 110-120 for the index is possible at some point in 1977-78. Yet in the face of all this, as we all know, the Dow has done absolutely nothing, standing today at just about the same level it stood in February, 1976, despite the fact that earnings at that time were still mired at recession levels. The entire 1976 market, therefore, can be viewed as a period in which the market evinced increasing skepticism regarding 1976-recovery earnings, being willing to pay, as the year wore on, less and less for those earnings as the earnings improved. If one charts the price/earnings ratio for the current bull market rather than the price itself, one finds that the high was attained back last February when, with the Dow at a high of 994.57, investors were willing to capitalize 75.66 of then- tra!ling-12-month earnings at 13.1 times. Ever since that time, the price/earnings ratio has been declining, and, assuming some modest earnings improvement)n thejourth…9uarter,.tr'liling earrj!I9e.. – are no;'; bi;;gvalued at a;0-;;d9—5timesat cue;;t pices .- –.- — . – – – — . – . — — There are a number of things that can be said about this phenomenon. Fust of all, it cannot be reiterated too strongly that the figure is abysmally low on an absolute historical basis. Indeed, the price/earnings ratio low for every major bear market since 1937 has been around or, in most cases well above, the current figure with the two single exceptions of 1949, when at its low, the Dow stood at 6,8 earnings and the recent bear market low, when in December, 1974, it stood at an incredible 5.8 times trailing 12-month earnings. We suspect that both these occurrences constituted water- shed lows which are unlikely soon to be repeated. What, however, are we to make of the fact that the price/earnings ratio has been tailing off now for almost a year. If we look at the experience of the 1930' s through the 1950's, it is a somewhat less-than-encouraging sign. During this period, peaks in the pie tended to be more or less coincident with market peaks. Since the 1950's, however, a new tendency seems to have emerged. In 1966, for example, the pie ratio peaked some 13 months before the Dow itself. Prior to the 1968-70 decline it peaked with a lead time of 15 months, and, in the most recent bear market, the pie ratio topped out in April, 1971, a full 21 months before the ultimate market peak m January of 1973. It is interesting to note that, in all these cases, earnings continued to rise well after the peak in multiples had been achieved. We, thus, had, in each instance, a phenomenon similar to the present one, a case where the market was placing increasingly lower multiples on improving earmngs. Another interesting factor is the extent to which multiples have traditionally declined during past bear markets. The 1966 bear market saw the Dow multipleco..n!!actrom 19.5 to 13, a 33. de- – cline— The 1968 corr-eCtioniilvolV-ed a decline-froin-I77-tiestolr.7'iimes, a drop of; -roughly;-the same magnitude. Percentage drops of even less magnitude were characteristic of the 1950's. Only the 1973-74 bear market witnessed a decline of appreciably greater size,with the pie declining 66. The interesting thing is that, at the moment, the pie ratio has already declined by some 27 from its high of a year ago. Since earnings are likely to improve in 1977, it could continue this slide without any appreciable effect on stock prices. If an investor conridence recovery then sets in, the upside effect on prices could well be quite exciting. Dow-Jones Industrials (1200 p.m.) S & P Compo (1200 p.m.) Cumulative Index (1/27/77) AWT/Jb 957.78 101.79 664.69 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No statement or expreulon of opinion or any other matler herein conlalned IS, or IS to be deemed to be, dorectly or indirectly, an offer or the 50llCilOlion of an offer 10 buy or sell onr. security referred to or mentioned The matter IS presented merely for the canvellence of the subscriber While we belieVe the sources of our informaTion to be rei lab e, we In no way represent or guarantee the accuracy thereof nor af the statements mude herein Any adlon to be taken by Ihe subSCriber should be based on hiS own InvestigatIOn and Informallon Janney Montgomery Scott, Inc, oS a corpora lion, and lIS officers Of employee, may now have, or may later toke, positions or trades In respect to any seCUrities mentIOned In thiS or any future Issue, and such POSition may be different from any views now or hereafter e)fpressed In thiS or any other Issue Janney Montgomery Scott, Inc, which IS registered With the SEC as on Investment adVisor, may give adVice 10 115 If\vestment adVisory and C1thel customers Independently of any statements mode In thiS or In any other Issue Further infOrmatIOn on any seaJflty mentIOned hcraln IS available on requaSI

TABELL-S MARKET LETTER 909 STATE ROAD. PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGe February 4, 1977 The stock market definitely exhibited deteriorating action last week although that deterioration Is difficult to describe. Basically, It consisted of a continuing decline In the Dow-Jones Industrials . coupled with some mlnor.weaknessln.the broad.gene.raLrn,,-rkeLwhicJ1J1q.,,!.ntl.Li!et.,gR,t ast., .- . essentially been moving ahead In the face of a declining Dow. There Is, at the moment, no slnglelndi' cator which adequately describes the recent action of the stock market. It Is perhaps, therefore, worth while to take a look at some of the Individual components. As an Introduction to this exerCise, It Is useful to conSider various reference points. Most major market Indicators made a noticeable high sometime during last summer. In the case of the Dow- Jones Industrials, S & P 500 and the New York Stock Exchange CompOSite, that high was In September. In the case of the DOW-Jones Transportation average, the American Stock FJchange Index and our Cumula- tive Index, It was In July. Most Indicators also show a noticeable low occurring sometime during the fall, In November In the case of some Indicators, October In the case of others. All, moreover, rallied from that low up to the end of the year. Likewise, most, but not all, have formed distributional patterns since the end of the year. It Is the Interrelationship of all these various reference pOints that determines the configuration of each Individual Index's pattern and helps determine the likelihood of whether recent action constitutes major distribution or only a pause on the way to higher levels. With this In mind, let us review the major Indices. Dow-Jones Industrials .(949) This Is one of the weaker patterns. The September high barely ex- ceeded previous peaks and lasted only a few days. The November low, In tum, fairly decisively violated all previous lows so that, on the face of It, the pattern looks suspiciously toppy. We chose to disregard this action at the time since almost no other average, as of November, had a similar pattern. The rally at the end of the year failed to make new highs, and a fairly substantial distributional top was then formed. However, most downside objectives of that distribution are now being reached, and there Is minor support at present levels . . -S-&-P.50.0..(W2) .As .was.not.the case wlth;lhe.Dow.,the.Septemb.erpeak w.asa.,declslve-.ney.r hlgh.. Also In contrast to the Dow, the decline In November did not carry to a new low. The January peak .- equaled, but did not exceed, the previous high, and subsequent distribution has been minor. A decisive break below the 99 level would be required to call the pattern Into question. Dow-Jones Trans portatlon .(227) Here the co nfiguratlon Is entirely different. The July pea k continued an established uptrend,and,at the low In October, preceding by a month the low In the Industrials, down- side objectives had been reached. The rally In December car-led to a decisive new high, and the subse- quent distribution suggests a downside target of no worse than 220. Dow-Jones Utilitles.(109) Stili another cnflguratlon. No notable Interruption of the uptrend took place last summer and fall, and the Index spent the month of January achieving new peaks while the other Indices were declining. Absolute ly no new short-term distribution currently exists. The problem for this Index will be massive overhead supply which exists just above current levels, supply which dates back to the 1971-72 period. New York Stock Exchange Composite. (55) The pattern here roughly parallels the S & P 500, not surprising due to their similar construction. A downside breakout to 52 would be disturbing In the case of this Index. American Stock Exchange Index. (113) For the past two months, this has clearly been the best per- former among the Widely-followed Indicators. After a July high and an October-November double bottom, the index spurted ahead In December to well above Its July peak. Like the Utilities, It continued to rise In January, reaching a new high just a few days ago. Cumulative Index. (662) This Index, our own construction measuring the action of all NYSE-listed stocks, shows a pattern very slm!!ar to that of the Amex Index although with somewhat less volat!!lty. The December rally carried to decisive new high territory and contlnued,albeltat a-relatively tepid pace, on Into January. No distribution has yet been formed. On a long-term baSiS, this Index has an unre- servedly bullish configuration. Ab!!lty to move above the 630 level constituted a major breakout from what appears to be a three-year base formation and suggests notably higher levels. Just how to view this configuration In the light of the action of the other Indices Is the major question at the moment. If all of the above suggests that the picture Is somewhat jumbled, we cannot help It. Unfor- tunately, such Is precisely the case. It Is certainly Impossible to say, In the light of some of the action noted above, that recent market action has been all we would like It to be. However, the picture Is also totally uncharacteristic of the sort of major deterioration which one would expect If an Imoortant top were being formed. Dow-Jones Industrials (1200 p.m.) S & P Composite iI200 p.m.) 950.63 102.14 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL Cumulative Index (2/3/77) 661.62 AWT/jb . 1 No statement or expreSSion of Opinion or any other matter herein contained 15, or IS to be deemed 10 be, directly or IndIrectly, on offer or the SOllCIlolion of on offer to buy or sell any security referred 10 or menhoned The moller IS presenled merely for the conver-Ience of the ubscr,ber While Ne believe the sources of our mformolion to be rellOble, we m no way repreent or guarantee the accuracy thereoF nor of the sotements mude herem Any octlon to be token by the subSCriber should be bosed on hiS own mvestlgatlOn and Information Janney Montgomery Scott, Inc. as a corporation, and Its officers or employees moy now have, or may later to\-e, poshlon! or Irades In respect to any seCUrities mentioned In thiS or any future Issue, and such posdlon may be different from any views now or hereafter c)lpressed In 11-11 or any other IHue Janney Montgomery Scali, Inc, which IS reglsle'ed With Ihe SEC as on Investment adVisor, may give adVice to Its Investment adVISOry and othel customers mdependently of any satemenls mode m thiS or In any oher Issue Further Information on any seClJrlty mentioned herein IS available on request

TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER AMERtCAN STOCK eXCHANGE February 11, 1977 THE VESTAL VIRGINS REVISITED .. – …. rq..,… Orthe FinI.Qne-Decision – – – …. -;— —– -.-'.- -…. .- –. -…. Over thirty years of publication, this letter, we will be the first to admit, has issued its share of iC comments and forecasts that were less than helpful to its readers. We were lucky enough, however, some four years ago, to take rather violent exception with the then-fashionable one-decision school of invest- ment management — the theory which held that above-average investment results could be achieved simply by buying and holding that minority of issues with unbroken growth records, regardless of the price being paid. The collapse of the growth favorites in 1973-74 is now history and the painful experience of watch- ing these issues becoming the downside leaders of that bear market is now undeniably etched in the minds of investors. That bear market, however, came to an end over two years ago, and the bull market of 1974- 197 has ensued. It is, perhaps, time for another look at the record. To this end, we have constructed an index based on equal investment made at the 1973 high in thirteen growth favorites. () (To eliminate bias, we used a list that was actually chosen in mid-1973). Using the 1973 high for each issue as a base equaling 100, the index declined at the low of 1974 to 34.72, a drop of over 65. This compares to a 45 drop in the Dow-Jones Industrials and a 48 drop in the S & P 500. The initial bounce-back was fairly sharp, and the index doubled in early 1975, recovering to 72.98, although this performance was not a great deal better than either that of the Dew or the S & P. Since the recovery high, however, whlle the general market has been holding reasonably steady, most of the stocks in the Index have been selling off rather sharply from their recovery peaks. The Index now stands at approximately 48.34 indicating that almost two-thirds of the advance since the 1974 lows has now been given up. The Dow at this moment stands 10 below Its all-time high and some 64 above Its 1974 nadir. Comparable figures show the S & Pare 15 down from Its peak and 62 up from Its low. The growth stocks Index, by contrast, Is still more than 50 below Its all-time high and now up less than 40 from Its bottom. ,. Nor is anjfsJgl)–Q.Lrlief,i)LsIg/lt. Jj1eJellivestrengthof the gr9j11Tj!jY9rttes haJee,,-almot — uniformly subpar In recent months, and many of them have recently broken ouron tiie downside -of fairly – — substantial distributional top formations. Indeed, two of the thirteen stocks In our list are now below their 1974 lows, and a number of others are close. The dogged proponent of the one-decision theory, assuming one still exists, has not only been decimated in the late bear market, he has missed the entire subsequent bull market as well. How long can this all go on Unfortunately, excesses in one direction tend to correct themselves via excesses in the opposite direction. That growth stocks were ridiculously overvalued In 1973 Is now obvious. As the one-decision theory ultimately begins to writhe In its final deaththroes, they may become equally undervalued. At Its 1973 high, our growth stock Index sold at an astronomical 53.4 times trailing l2-months earnings — 3.4 times the multiple which then existed on the Dow and 2.85 times the multiple on the S & P. At the tall end of the 1973-74 bear market, this disparity had narrowed, but only partially. The growth stock multiple of 15.5 times earnings at that low was 2.65 times the Dow and 2.2 times the S & P. Two years later, growth stocks earnings have continued to Improve. (Indeed, every one of the thirteen issues will show earnings In 1976 well above 1972-74 levels). However, the multiple Is only 16.3 times, 1.7 times the Dow and 1.6 times the S & P 500. In our original 1973 critique of growth stock Investment, we said, It should be made clear that what is being said here Implies no criticism whatever of the fundamental merits of recognized growth Issues, suggests that they should not sell at some premium over other Issues or affirms that they cannot under any circumstances be attractive purchase candidates. The question, at the moment, Is whether that premium Is yet suffiCiently eroded. Technical work at the moment would suggest that such Is not the case, Were,however, the growth index to come close to its 1974 low (and remember somelssuesarRal- – …… 1 ready there) and general stock market levels to remain unchanged, the growth stock premium over the rest of the market would have about disappeared. This would be a state of affairs comparably ludicrous to the fifty-plus times earnings of four years ago. The point at which the last growth stock advocates gave up the ghost would coincide with the point at which the Issues finally became again attractive for purchase. The 13 stocks are – Eastman Kodak Polaroid Corp Avon Products Burroughs Corp IBM Int!. Flavor & Frag Proctor & Gamble Sea rs Roebuck Coca Cola Disney Prod Dow-Jones Industrials (1200 p.m.) S & P Composite (1200 p.m.) Johnson & Johnson McDonalds Corp 931. 52 100.64 Xerox ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL Cumulative Index (2/10/77) 659.55 AWT/lb No statement or expression of opinion or ony other matter herein contaIned '5, or 15 to be deemed to be, directly or mdH('ctly, an offer or the soliCitation of on offer to bvy or sell any security referred to or mentioned The motler IS presented merely for the converlenc! of the subSCriber While we believe the sources of our Information to be reliable, we In no way represent or guarantee the accuracy thereof nor of the statements mude herein Any action to be token by the subscnber should be bol!d on hl5 own InvestIgation ond Informolron Janney Montgomery Scoll, Inc, as 0 corporotoon, ond It5 off,,.ers or employees, may now hove, or may laler loke, poSitIons or trodes In respect to any seCUrities mentioned In thiS or ony future Issue, ond such position may be dlffere'lt from any views now Or hereafter expressed In '''115 or ony other Issue Janney Montgomery Scott, Inc, which IS registered With the SEC as on Investment adVisor, may give adVice to Its Investment odvlry and other CUtomer Independently of any statements mode In thiS or In any other Issue. further Informahan on ony secvllty mentioned herein '5 oValloble on request

—————————————- —————- TABELL'S MARKET LETTER 909 STATE ROAD. PRINCETON. NEW JERSEY 081540 DIVISION OF MEMBER NEW YOPIK STOCK eXCHANOE. INC. MEMBER AMERICAN STOCK EXCHANQE February 18, 1977 The stock market is about to enjoy an anniversary of sorts,although little note thereof has been taken in the financial press. It is just about a year since February 24, 1976, on which day our daily-bre-adth index' reached th-ehlgh which climaxed-the't';io-month surge'thatushe'red in that-year, -a' , high which was not to be exceeded unt1l1ast December. On the same day the Dow-Jones Industrial Average, for the first time In the current bull market, touched 1000 on an intraday basis. Since that time, as we are all aware, the popular averages have essentially moved sideways. Harry Truman made a good deal of political capital out of what he called a do-nothing Congress. We are shortly about to celebrate the first birthday of the do-nothing stock market. When one looks beyond the averages, however, the stock market story of the past year is a bit more interesting. We maintain a year's worth of price history for a representative list of 282 Issues, including the 30 Dow components and the largest components of the S & P 500. An analysis of the performance of these issues between February 18, 1976, just a year ago today, and February 9, 1977, produces some interesting observations. Overall, the performance of the list is about what one would expect. For the period in question, the S & P 500 is just about unchanged and the Dow is down some 4.6. The average per- formance for the group as a whole is a 2.75 loss, and the median issue on the list shows a 3 loss. 150 of the 282 stocks outperformed the Dow and 124 bettered the performance of the S & P. The follow- ing table lists the 10 top performers on the list. 2-9-77 2-18-76 Gain Santa Fe International 49 3/4 25 1/2 95.10 Mesa Petroleum 36 3/4 23 3/8 57.22 Boeing Occidental Petroleum – – .- – Teledyne – —- – – -.—…— 40 1/4 24 3/8 60- 26 1/4 16 1/4 39 3i4 53.33 51.54 50.94- Ex-Cell-O 25 3/4 17 5/8 46.10 Atlantic Richfield 56 5/8 40 7/8 38.53 Great Western Financial 22 1/4 16 1/8 37.98 Standard Oil California 41 1/4 30 1/8 36.93 St. Louis-San Francisco RaHway 44 1/2 32 3/4 35.88 The above issues constitute a fair microcosm of the better-performing issues as a whole. As can be seen, five are energy-related companies, and there is one aerospace company, one interest- sensitive issue and one railroad. When we look at the top fifty performing issues on the year, we find that these groups, plus public utilities, account for better than half the list. The fifty top performers include 19 energy-related companies, 4 companies that can be categorized as interest-sensitive, 4 utilities and 3 rails. These fifty Issues had a median gain of 26.65 and the lowest gain among the fifty was 17. When one moves dow'! to the bottom fifty issues in the list, some consistency also be- comes apparent. The performance of these issues ranges from a 20 loss to a 62 loss, and the me- dian decline was 25. Liberally sprinkled throughout this category are the blllon dollar growth issues which we discussed last week. Twenty of the fifty worst performing issues can be classified as be- longing to this category. Also fairly well represented among the poorer performers are the basic- industry stocks which had been the leaders of the bull market up until early last year. Seven of the fifty worst performers fallinto this group. It should be remembered, however, th!'Uhe doymswi'!g in these issues constitutes a correction after a sharp advance, while in the case of the growth stocks it was a continuing decline. Finally, it is interesting to compare the stocks with the list of the favorite fifty stocks of investment companies compiled by Vickers Associates. Six of these were among the top 50 per- formers including three among the top ten. However, ten of the worst fifty performing issues were al- so In the Vickers list. If nothing else, our analysis suggests that the stock market over the past year has been one of infinite variety and not just a casual sideways drift. The wide gulf between the performance of the various issues underscores, we think, the continuing importance of stock selection. Dow-Jones Industrials (1200 p.m.) 939.08 ANTHONYW. TABELL S & P Composite (1200 p.m.) 100.42 DELAFIELD, HARVEY, TABELL Cumulative Index (2/17/77) 658.09 AWT/jb No statement 01 expreSSion of opinion or ony other mOler herem contolned IS, or is 10 be deemed 10 be, directly or 'I'\dlrectly, on offer or the oll(llollon of on offer 10 buy or sell ony security referred 10 or menl10ned The molter IS presented merely for Ihe convellenaJ of the sub5trlber. While we beheve Ihe 50Uroo of our Informa lion to be reliable, we 10 no way represent or guo'onlee the accuracy thereof nor of the statements mude herein Any action to be token by the ubscflber should be bosed on hiS own Invetlgotlon and Informotlon Jonney Montgomery Scoll, Inc, as a corporation, and Its officers or employees, may now hoye, or may later toke, positions or trades In respect to any seCUrities mentloned In thiS or any future Issue, and such poslhon may be different from any views now or hereafter expressed In th or any oiher Issue Janney Montgomery Scott, Inc, which IS regiSTered With the SEC as an Investment adVisor, may give adVice to lIs Investment adYlsory and other customers mdependently of any statements mode m thiS or In any other Issue Furlher information on any seC1.lfIty mentioned herem IS available on request

r—————————————————————————————————- TABELL'S MARKET LETTER 909 STATE ROAD. PRINCETON. NEW JERSEY 08540 DIVI910N OF MEMBER NEW YORK STOCK eXCHANGE, INC MEMBER AMERICAN STOCK eXCHANGe February 25, 1977 Random thoughts in a desultory market. Ofdihv'I's Stock Purcha–seOffer-'The anfiotincem-ent'bytheccountry's -largest (in total'mar- ket value) corporation that It plans to offer to buy 4 million shares of Its own stock came as a sur- prise to the financial community and, thus, produced copious copy In the financial press. If one can get over being awed by the sheer magnitude of the numbers (1.12 blll1on), the decision, on the face of It, appears to be an eminently rational one. IBM's balance sh eet currently shows cash and marketable securities In excess of 6 billion, and In recent years, the company's cash flow has been running well ahead of capital expenditure needs. There are actually few alternatives open to It. An attempt to purchase another company would probably Incur the wrath of the Justice De- partment, despite the fact that, for the 1.12 bllllon Involved, IBM could have purchased anyone of 399 of the 500 companies In the S & P 500. A dividend Increase had already taken place, and, It Is Interesting to note, the company's payout ratio, based on tralling 12 months earnings, Is up to 63. This Is rather at variance with the classic growth-company concept of a low payout ratio necessitated by heavy demand for expansion capital. Thus, the purchase offer appears to be a logical one. The high payout ratio and the historically high current yield for the stock raise Interesting questions of valuation. Quite obviously, at a 3.6 current return, the stock Is unattractive on an income basis vis-a-vis fixed-Income securities. But we are dealing here with a stream of In- come which presumably will continue to grow. The task of valuing such a growing Income stream Is a fascinating problem to tax the most sophisticated of IBM's own computers. On Natural Gas — We must confess our complete fallure to understand why anybody should – b-e in the least surprlse'd by-the-naturalg–asshOrtageOfieleamslnEconorniC1n tfiatwh-en-flfe –' ….,.. price of a commodity Is artificially held below what the market would normally command, shortages result. Yet, Incredibly, there are stlll those who do not see that the overriding reason for the shortage Is Inept regulation and whose solution thereto involves more regulation. What disturbs us about the whole thing Is the effect on the quality of life. In our own office, the thermostat, In compliance with State regulations, Is set at 65 0 In a word, we are cold. True, the discomfort Is not serious, and we will undoubtedly survive. However, multiplying our own discomfort by that of tens of mllllons of others results In a discomfort quotient that is fairly staggering. America has characteristically prided herself on an economic system able to provide the elementary necessities of life In abundance. The sad thing Is that that system apparently Is no longer able to do so. On Polar Bears — Discussion of the gas shortage reminds us of the fact that It has, In- deed, been a cold winter. Argus Research has dubbed those analysts who are now predicting dire consequences for the economy based on that cold as polar bears. Along with Argus, we find ourselves unimpressed by their argument. Increased energy expenditures Simply Involve a transfer of purchasing power. Under these conditions, some companies wlll do well, others less well. The stock market has been apparently reflecting this fact for over a year, if one looks at the per- formance of most energy-related stocks. The winter cold may, indeed, produce Its share of dis- comfort, rut the effect on the economy as a whole, we think, is likely to prove to be negl1gible. On Timing — We have commented in the past that the recent infatuation of many money managers with market.tIming as a royal road to riches was likely to prove ill-found,ed even though we, ourselves, as technicians, -obviously spend a greatdeaI'of effort in just that area. On look- Ing back, it appears that the bull market which began in 1974 has provided just the sort of environ- ment to make attempts at market timing difficult. The bulk of the rise came In two short bursts, one, In 1975, six months long, the other, in 1976, barely two months In duration. The rest of the time was spent in relatively flat trading ranges for the averages during which there was ample opportunity to pick above-average performing stocks. It is a typical quality of the stock market that,at a time when interest in timing is at Its greatest, an environment is forthcoming when stock selection rather than timing, turns out to be the major Ingredient of investment' success. Dow-Jones Industrials (1200 p.m.) 929.85 ANTHONYW. TABELL S & P Composite (1200 p.m.) 99.30 DELAFIELD, HARVEY, TABELL Cumulative Index (2/23/77) 654.21 AWT/Jb No slolemenl or eprcss!on of OplTlIOn or any other moiler herem ton/olned IS, or IS 10 be deemed to be dHectly or indirectly, on offer or Ihe sollcltollon of on offer to buy or sell any security referred to or mentioned The moiler I presented merely for the converlenCG of the subSCriber While oNe believe the sources of our Informa' tlon to be reliable, we In no way represent or guarantee the accuracy thereof nor of the statements mude herem Any action 10 be taken by the subSCriber should be based on hiS own Investlgallon ond Information Janney Montgomery 5alt, Inc, as a corporation, and Its officers or employees, may now have, or may later take, POSi!IOns or trades in respect 10 any securities mentioned In thiS or any future Issue, and such position may be different from any views now or hereafter expessed In thll or ony ather Issue Janney Montgomery Scott, Inc. which IS registered With the SEC as an mvestmenl adVisor, may give adVice to lIs Investment odvlsory and othel customers .ndependently of any statements mode In thIS or In any other Issue. Further mformO'lOn on any security mentioned herem IS ovorloble on request

TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETOH. NEW JERSEY 08540 DIVISION or MEMBER NEW YORK STOel( EXCHANGE, INC MEMBER AMERICAN STOCK eXCHANoe But thought's a weapon stronger; March 4, 1977 We' W a i.- l t l – win a – I1–t our tle l-'0– obnag-tetlr-e-s. by T its aid;- – – – – 'T- .,.. The Good Coming, Charles Mackay This letter has often sermonized in the past on the virtues of Charles Mackay's book, Extraor- dinary Popular Delusions and the Madness of Crowds. We have even gone so far as to say that anyone not familiar with the history entailed therein ran serious risk of finding himself Ill-equipped to deal with the stock market. Mackay's book Is probably the best extant history for the lay reader of such bizarre events as the SOlth Sea Bubble, and the Holland Tulip Bulb Mania, along with a chapter, which makes Interesting reading in the light of today's fashions, on the Influence of politics and religion on the hair and beard. A fact that may not be widely known, even among those familiar with the book, is that Mackay, a Scotsman who lived from 1814 to 1889, earned his primary reputation as a poet, and the quote above Is taken from one of his poetiC efforts. The quotation Is, we think, as applicable to the current stock market as his book is to markets In general. There has been a distinct change which has taken place in the past three or four weeks In the character of the stock market. It Is certainly one deserving of notice and the application of Mackay's stronger weapon, 1. e., thought. Thought and analysis will, we think, help us a great deal In formulat- ing a forecast as to the future course of stock prices. However, before suggesting any drastic change In investment policy, we prefer, with Mackay, to wait a little longer. The change which has affected the market in recent weeks can be summarized very simply; It has turned weaker. This may not be totally apparent to those who have watched the Dow-Jones Industrial Aver- age rebound twice with moderate vigor from around the 930 level. What is taking place, however, Is exact- ly the reverse of what this letter consistently pointed out was happening in December and January, when a lackluster performance by the-Dow was-masklng-a- m-arker1liat WaSilfl-lfclualitY/acUng verywe11. 'in-the .- past few weeks, exactly the reverse has been the case. The DOW-Jones Industrials have been the strongest component of the market, a fact which can be documented by the following table. DJII DJ Trans. DJ Utll. S&P 500 Mld-february Low 926.03 2/11 221.14 2/14 104.84 2/15 99.51 2/14 Late February Low 926.20 2/25 Amex Index 219.91 2/28 Cum.Index 104.23 2/28 Bdth.Index 98.82 2/25 Mld-february Low 111.79 2/14 653.11 2/14 832.99 2/11 Late February Low 110.20 2/28 641.41 2/28 830.49 2/25 As we are all aware, the general market ceased Its decline In mid-February and then staged a mild rally before resuming Its downtrend. Of all of the averages documented above, including our Cumula- tive Index and ,Dally Breadth Index, all went to new lows at the end of February, with the Cumulative Index, In our view the most accurate measure of the overall market, posting a new low by a substantial amount. Only the Dow was able to hold above Its mid-February low and is now, Indeed, rallying off that low. The question Is, of course, what we are to make of this phenomenon. The lows of mid-February and late February are, In all cases, close enough to each other so that,lf a rally were to continue from these levels, we would have a potential for a so-called double bottom. The upside Implications of that double-bottom base formation are not, at the moment, too terribly excltlng,and we, for one, would prefer to see backing and fllllng around current levels so that a base suggesting a meaningful advance might be formed. The likelihood of such an event Is strengthened by the fact that most of the averages have now moved above the downtrend channels projected from the year–end highs to their lows of last month. Those bullishly Inclined will cite the fact that the renewed strength in the Dow may Indicate that this segment of the market has completed Its correction and that, once the other Indicescomplete-their own correctlonary phases, the market can again get Itself Into gear on the upside. Our own Interpretation of indiVidual patterns suggests that this argument is, indeed, not without plausibility. It Is further true that none of the averages mentioned above have, at their recent bottoms, broken their November lows, lows which from a technical point of view, do, In fact, have true significance. Indeed, only the Dow and the S & P are close to their levels of last November. All of the other indices remain well above them. In short, the question of whether the November lows will be broken or whether the double-bottom thesis will prove to be valid remains unresolved. Before It can be resolved, we will, It seems to us, have to walt a little longer . Dow-Jones Industrials '1200 p. m.l S & P Compcs Ite (1200 p. m.l Cumulative Index (3/3/77) 951. 80 101.11 651. 23 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL AWT/jb No statement or expression of op'nion or any other motter herein contolned IS, or IS to be deemed to be, directly or ,ndirectly, on oHer or the soliCitation of on offer to buy or sell any security referred 10 or mentioned The motler IS presented merely for Ihe convcrlence of Ihe subscnber Wl'l!le.JIc believe the sources of our lnformolIOn to be reliable, we In no way represent or guorontee Ihe accurocy Ihereof nor of the statements mude herein Any acllon 1-0 be token by the subSCriber !inould be bosed on hiS own Investlgolton and Informotlon Janney Montgomery SCOll, Inc. as a corporation, cnd Its offlCers or employees may now hove, or may loter loke, poSitions or trodes In respect 10 any seculltres mentioned In thIS or any future Issue, and such position may be different from OilY views now or hereafter expressed In thiS or any other Issue Jonney Montgomery Scott, Inc, which 15 registered With the SEC as all Investment adVisor, may gIVe adVice to Its Investment adVisory and othel customers mdependently of ony slotements mode In Ihls or In ony other Issue further ,nformatlon on any security mentioned herein Iii availoble on request

TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DrVISION OF MEMBER NEW YORK. STOCK. eXCHANGE, INC MEMBER AMERICAN STOCK. EXCHANGE March 11, 1977 We noted in this space last week that, despite the market's having held around recent lows, no meaningful base which would suggest an lmmediate substantlal advance had yet been formed. ,,, 'Th1sWeek's-decline froifl'a Iuesaayil\tra-'daVlfiICor-91i-0-tOThu'fsdaY'-s- low of 938 prtortba-late-' — , Thursday rally could very well be the start of the sort of Sideways action that would lead to a more important base formation. One item prominently featured in this week's financial news was the sharp increase in mutual-fund net sales, whlCh reached 141 million for the month of january. This was the highest in- flow of cash into mutual funds since january, 1975 and, with that single exception, the largest net inflow since October, 1971. Actually, the increased cash inflow had been foreshadowed by a rise in sales to their highest level since 1969 in December, year-end sales flgures of 661 million being the third highest figure recorded for any month Since the data has been mamtained. This rise was offset during that month by a sharp, probably tax-mduced, one-month mcrease m redemptlOns. In january, sales were almost the equal of December, and redemptions dropped off to a more normal level. Thus, the record cash inflow. After 18 months of consecutive net redemptions, through last October, the funds had modest net sales in November and December followed by the near- record net sales figures for the first month of 1977. It is interesting to note that mutual fund managers were not mclined to react to the influx of new money. All of it went toward a buildup in cash positlOn and, indeed, some 59 million worth of stocks were sold during the month, raising cash positlOn at a percent of net assets to 6.44, the highest level m a year. It must be stressed, in looking at these flgures, that the analysls of mutual fund statistics is a tncky business and has become more so in recent years., The first th10g that must be noted is the meanmglessness of netted figures such as net sales, net redemptions or redemptions as a per- cent of sales. This has been due to a secular trend toward net redemptions which has existed through- out much of the 1970's, possibly reflecting well-advertised public disinterest 10 the stock market. The a– … -problem can be solved-by 100king-atialesanaCeaempt1onsasseparate items-atherth'an as net– – figure. The other fact to keep in mind in looking at fund statisllcs lS that we are looking at the behavior of two sets of individuals. When we look at such things as sales and redemptions, we are examining the behavior of the mutual fund mvestor. When we look at such data as changes in cash pOSItion, we are noting decisions made by the mutual fund manager. With this in mind, let us look at a few statistics — first of all, fund redemptions. The historical tendencies of th,S statistic have been that lt dries up sharply during bear markets, rebounds a bit after bottoms and then begins a new sharp rise as a bull market gets underway, reflecting, no doubt, investors' tendency to sell as they get even. Generally, the level of redemptions levels off fairly close, but in advance of, the end of a bull market. The last redemption peak was 10 early 1976, and was nearly equalled last December. Since a leveling off-tendency has been apparent for about a year, data on redemptlOns would tend to suggest cautlOn at the moment. When one looks at sales, however, a different story presents itself. Historically, sales tend to dry up along with redemptlOns during bear markets. After rebounding a bit, they generally do little durmg the early stage of upswings and, generally, commence a sharp increase around the middle of a bull-market cycle. Thus, the rise 10 sales to almost all-time peaks m the past two months must be considered an encouraging factor and would, lf it were to continue, suggest a healthy market. Finally, an analysis of the amount of their portfolio that mutual fund managers have chosen to retain in cash leads uS to some interesting conclusions. Cash position generally tends to reach a peak near major market lows, to decrease sharply as bull markets get underway and, finally, to remain flat for a period of time, increasmg again as bear markets begin. Thus, cash positlOn reached anBlltime hlgh of-13. 5 a month before the bottom-m1974'a-rfd decnn'ed toa-low 01 54-3 last- September– – , October. Last week's rise to a new high was only modest, and this actlOn during 1976 could be attributed to a slmple flattening of the cash posltion curve. Such a flattening has generally persisted in the past for as much as two or three years pnor to bull market peaks, agam suggest10g longer life for the current upsw lng. The most bulhsh configurahon of mutual fund data in coming months would consist of a contlnuing rise in sales accompanied by a like rise, at a somewhat slower rate, 1n redemptions. Thls should also, on an h1stoncal basis, be accompanied by a w1lhngness of managers to invest the cash 1nflow so that overall cash pOSition rema1ns stable. It will be 1nteresting to see If such action, in fact, takes place. Dow-jones Industrials (1200 p.m.) S & P CompOSite (1200 p.m.) Cumulatlve Index (3/10.77) AWT/Jb 948.39 100.74 618.76 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No statement or e)(preSSlon of oplrllon or any other molter herein tontalned IS, or 1 to be deemed 10 be, directly or Irldlrectly, an offer or the soliCitation of an offer to buy or sell any secuTity referred to Or mentioned The malter 1 presented merely for the canveT'lence of the subSCriber While oNe believe the sources af our Informa tlon to be reltable, we In no way represent or guarantee the accuracy thereof nor of the statements mude herein Aoy actIOn 10 be toen by the subKrlber should be based on 1115 own Investigation and information Janney Montgomery Scott, Inc, as a corporal lon, and Its officers or employees, may now have, or moy later take, POSitions or trades Irl respect to any securles mentioned In 1hls or any future Isue, and such pOSition moy be different from any views now or hereofter expressed In thIS or any other Issue Jonney Montgomery Scott, Inc, whtch IS registered With the SEC os on Investment adVisor, may give Cldvlte to Its Investment odvlsory and othel customers Independently of ony stotements made In thiS or In any other Issue Further Information on any security mentioned herein IS OVOilabie on request