Viewing Month: March 1979

Tabell’s Market Letter – March 02, 1979

Tabell’s Market Letter – March 02, 1979

Tabell's Market Letter - March 02, 1979
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I TABELL'S MARKET LETTER 909 STArE RO…. D. PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW VORK STOCK E)(CliANGE. INC MEMBER AMERICAN STOCK eXCHANGe March 2, 1979 -' After having its !E'1'in. terms or.'the -Dow), the market appeared, during mid-February, to be moving laterally in preparation for a new at- tempt on the January peaks. Instead, the past few trading days saw another, somewhat vicious, leg down, the most conspicious manifestation of the decline being a 14-point drop on Tuesday, which brought the DJIA to a closing level of 807. As has often been the case with other re- cent market moves, this one, for the time being at least, seems to have run out of steam rath- er than developing additional momentum or a sharp reversal, typical follow-up characteristics of such declines until a couple of years ago. It now becomes necessary to assess the degree to which the present downswing has altered the immediate outlook. Our own view, certainly not unfamiliar to readers of this letter, has been that the triple- bottom formation of October-December 1978 is not without a substantial degree of market signi- ficance. We find ourselves part of what is probably a minority, holding the belief that this low will be sustainable for the time being. Over the past couple of months, the market has done little decisive either to prove or disprove our assumption. Quite obviously, this week's drop, bringing the Dow to within less than 3 of its mid-November low, raises serious questions as to whether or not this low may be violated. It also raises serious questions regarding the year-end rally which, until late January ,had proceeded smoothly but which now finds itself largely retraced, or indeed eradicated, depending on which indicators one happens to be looking at. We enumerated in December some of the con- clusions drawn from a study of 81 past year-end rallies. One such conclusion was the fact that a year-end advance in excess of 10 percent, without noticeable interruption, often presaged a ,better market. This lc)w'being- 9 almost, but not quite, made it, the percentage rise from We also- 8uggesteii or5etter 'prIces into was often a bullish harbinger. March has now arrived and, without a sharp reversal over the short term, it now appears unlikely that such persistence will materialize. The question which now presents itself, it seems to us, is how broad and, thus how dam- aging, has been the decline. As we noted above, the Dow on Tuesday was less than 3 above its fourth-quarter-,197.8 ,low-.,..Mnder. ,sUjh. conditions., a fair number of the Dow s year. Such, however, was not the case. At the individual lows of the week ended Wednesday, only 6 of the 30 components had moved below their late-1978 lows, and the average individual Dow stock stood 6.7 above that low. A group of 15 basic-industry issues, used in this letter as an average in the past, were collectively 12.7 above their fourth quarter low, and only 1 of the 15 had moved to new low territory. The most surprising absence of technical damage was on the American Stock Exchange where one would expect high volatility to have caused large numbers of sharp breaks. We ex- amined the action of 15 volume leaders on the junior exchange, and they stood last week, on average, 32 above late-1978 .lows, with only 2 of the 15 having penetrated those lows. Where, then, has the market damage been done The rather clear answer is that, to date, it has centered around the classic growth stocks. We maintain our own average of 12 of these issues. Six had, as of last week, moved below their lows of 1978 by amounts ranging up to 11 and, with the single exception of IBM, up 16 from its fourth-quarter low under the impetus of a stock split, all were hovering around their prior bottom figures. By and large, market weak- ness,so far seems tOTbe confined to this segment oLthelist. ' – .-c, We are not entirely sure how this particular phenomenon should be interpreted. It appears to suggest a renewed outbreak of bearishness on the part of institutions who, by and large, are the holders of these issues. A similar lack of interest proved to be ill-advised during most of 1977-1978, when large numbers of smaller-capitalization stocks moved sharply ahead in the face of desultory performance by growth stocks. We are not at all sure that the present instance is not a short-term example of the same kind of thing. The stock market, of course, is, like any other body, subject to contagion, and it is certainly possible that a malaise developing in one important segment of the market will spread to the wider body of stocks as a whole. Based on the evidence to date, however, it has not done so. Dow-Jones Industrials (1200 p.m.) 815.49 S&P Composite (1200 p.m.) 96.96 ANTHONY W. TAB ELL DELAFIELD, HARVEY, TAB ELL Cumulative Index 815.84 AWTrak No stclement or expreUIlm of opInion or ony other motter herem contolned IS, or IS 10 be deemed 10 be, dlreclly or ind,rectly, on offer or the sohcllotlon of on offer to buy or sell any security referred to or mentioned The molter 15 presented merely for the convel'lenCE of the subSCriber While we belIeve the sOlJrces of our mformo tlon to be rellOble, we In no way represent or guarantee the accuracy thereof nor of the statements mude herein Any octlon to be token by the subscrIber should be based an hiS own mvesr,gattan and 'nformallon Janney Montgomery Searl, Inc, as a corporotron, and rlS offrcers 0' employees, may now have, or may later take, posrons or trades rn reSpect to any securItIes mentIoned m thIS or any future Issue, o'ld such posllion may be dIfferent from ony vIews now or hereafter exp'essed In thIS or any other Issue Janney Montgomery Scott, Inc, whIch IS registered WIth the SEC as on Investment adVISor, may gIVe adVICe to I/S Investment adVISOry ond other Clnlomers Independently of any statements mode III thIS or In any other ISsue Further Informo,on on any security mentioned herein IS available on request

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Tabell’s Market Letter – March 09, 1979

Tabell’s Market Letter – March 09, 1979

Tabell's Market Letter - March 09, 1979
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I 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANoe, INC MEMBER A.MERICAN STOCK EXCHANGe March 9, 1979 -,-.- – – – -r– , We' Mve'notenh- the pasrthat the 'stock market With rlOtunfamiliiircont;B.rlness -. – recently been refusing to post either decisive' new highs or decisive new lows, thus allowing those of us in the business of commenting on the market a wide degree of latitude in describing its recent action. It is interesting to note that this series of refusals to create new benchmarks is now six years old and nested five levels deep. Consider the following. 1. The Dow reached its all-time high of 1051. 70 on January 11, 1973, and, in one of the worst bear markets on record, declined to 577.60 on December 6, 1974. 2. Two years later on September 21, 1976, it had risen to 1014.79, from which level it declined to 742.12, over a period of a year,and a half, reaching its low on February 28, 1978. 3. Over the next half year it rose to 907.74 on September 11, 1978, and declined to 787.51 on December 18. 4. In the subsequent year-end rally, the index rose to 859.75 on January 26th. At that point, the rally aborted and, a month later on February 27th, it had retreated to 807.00. 5. A couple of weeks later, as of yesterday, it had moved up again to 844.85. The irony of all this is that an analyst of bearish persuasion can now point to a series of five successively lower benchmark highs and consequently postulate a six-year-old bear market. Those optimistically inclined can note the four successive higher benchmark lows and describe exactly the same six-year period as a bull market. – —-Theimpasse 'should resolve itself shortiy si;;ce thee'successive reference points are becoming ever more compressed in time. The first couple of cycles referred to above were each two years long, while the third lasted only three months, the fourth, one month, and the final one, of course, is still reaching new peaks. We suspect, however, that the ultimate resolution one way or the other, will perhaps have less significance than would at first seem 'apparent. For ourselves, we prefer to interpret the formation outlined above as symptomatic of a confusing and trendless market with broad diversity of action among individual stocks and groups rather than give it outright bullish or bearish significance.. We tried to document last week the case, that a great deal of the recent downside action, especially that centering around the swing since January, had focused on the high-capitalization growth stocks. For so long as this continues to be the case, we are inclined to feel that the market's overall vulnerability remains limited. For a group of stocks to be considered to be in serious price jeopardy, it must first of all have risen to the point where, from a technical and fundamental basis, it can be considered exploited. Senior growth issues hardly fall into this category. They were leaders 'in the 1973-1974 bear market cycle posting declines of well in excess of 50. Their subsequent recovery was modest, and, as recently as a year ago, they had retraced a good portion of that recovery, and were reasonably close to 1974-low figures, with many individual issues having moved well below those lows. Now, if weakness continues, these 1974-1978 levels may be tested for a third time. As of February 28th, a growth-stock index which we maintain had reached 36.79 versus a year-earlier low of 32.80. A,test of that earlier bottom would rhardly consitute a disaster. 'Meanwhile, asthese issues continue to trade around five-year lows, earnings, with a few exceptions, have continued to improve, and p Ie ratios, both on an absplute basis and in relation to the market, are at record low figures. This sort of thing is, in our view , hardly descriptive of a group of exploited issues. None of this suggests that short-term subpar.' action on the part of these issues will not continue. It is simply meant to point out that such stocks are hardly in a positition to exert major downside leadership. Meanwhile, as was noted last week, secondary issues which might, on an exploitation basis, be considered to be technically vulnerable, have been showing above average relative action. Dow-Jones Industrials (1200 p.m.) S & P Composite (1200 p.m.) Cumulative Index (3/9/79) AWTrak 844.59 99.\7. 721. 41 ANTHONY W. TAB ELL DELAFIELD, HARVEY, TABELL No statement or expreSSion of opinion or any other motter herein contolned IS pI 1510 be deemed to be, directly or 'nd,rectly, cn offer or the 501lCIlotion of on offer 10 buy or sell cnr. security referred 10 or mentioned The motter 15 presented merely for Ihe convellenCe of the subscriber While -Ne believe the sources of our Informo- lion to be reI lob e, Wf! m no way represent or guarantee the accuracy thereof nor of the statements mudf! herein Any CIchon to be token by the subSCriber should be bClsed on hiS Clwn Investigation Clnd InlormClllon JClnney Montgomery Scott, Inc, CIS a corporation, and lis offICers or employees, mClY now have, or may loter talee, positions or trades In respect to any seCUrities mentioned In Ihls or any future Issue, and such position may be different from any views now or hereafter expressed m th or any other issue Janney Montgomery 50011, Inc, which IS registered With SEC as on adVisor, may give adVICe to lIs Investment adVISOry and olhel customers mdependently of any stalements mode m this or m any other/Issue Furtlier InformClllon on any secuoty mentioned herem IS oVClllable on request

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Tabell’s Market Letter – March 16, 1979

Tabell’s Market Letter – March 16, 1979

Tabell's Market Letter - March 16, 1979 page 1
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0..- – .-0-.- .– .. . — – . – – – TABELL'S MARKET LETTER H , I , – – – – .I .Yt/t1C1tey, !YaM 909 STATE ROAD, PRINCETON, NEW JERSEY 08!540 DIVISION OF ,)''71 uit,n'fomcy YcdI fnc. MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK eXCHANGe – March 16, 1979 ..,.,.- – '— ,-the Dow' the broad 800-850 trading area moving laterally in preparation for what appears to be an attempt to penetrate the hi gh of 859.75 made on January 26. Recent ma rket weakness corrected the Dow Jones Industrial Averages to 807.00 on February 27 andthe last few weeks has been spent recouping this loss. As has been pointed out recently in this letter. the most serious technical weakness seemed to be centered around the senior growth stock area. A posting of 860 on the DJIA would clearly signal an upside breakout of this trading area on our point and figure charts indicating a potential move to new highs. ;-;; Within this framework of the Dow Jones Industrial Average, the American Stock Exchange Average continues to perform extraordinarily well completely ignoring the 26.61 correction experienced in the DJIA from the July, 1976, high to the February, 1978, low as shown in the table below. DJIA Percentage ASE Change Percentage Change Dec. , 1974 Low July, 1976 High Feb., 1978 Low March, 1979 577 .60 1011. 21 742.12 847.02 -075.07 -26.61 14.14 58.26 107.05 122.48 171. 62 -083.75 14.41 40.12 To help clarify this remarkable performance, the chart on the lower half of the reverse \—–1' dramatically outperformed the DJIA since the 1974 low. However, these figures need to be examined more closely and are not intended to infer or represent to the reader that that average issue on the American Stock Exchange has in fact outperformed the average issue on the NYSE by the percentages outlined in the above table. To better understand, it is interesting to observe the breadth behavior of the ASE and NYSE over the same period. Starting with a base of 30,000 on January 1, 1974, daily net changes (advaDces-declines) were cumulated on the ASE and NYSE. The results are shown on the upper half of the chart on the opposite page. These results seem to be in direct conflict with the averages charted below — but they are not. The apparent secular downtrend and behavior of breadth on the ASE can be explained by examining the characteristics and noting the differences of the issues which trade on the ASE from thosE!' on the NYSE. Obvious di fferences whi ch come to mind woul d incl ude fewer issues listed and traded; average price of ASE issues is smaller; listing requirements such as capitalization less stringent. Other effects on ASE breadth would include takeover by larger NYSE companies or the transfer of listings to the NYSE from ASE. What this means, then, is we are comparing two sets of statistics with different characteristics and the difference should be clearly understood when examining the breadth data. Of course, one explanation for the spectacular rise in the ASE average and the corresponding decline of the ASE breadth over the last five years can be explained by examining one group — Canadian Oils. The auction market has for years been able toC-identifY.pockets .of inefficiency.in the marketplace but in the case of the Canadian Oils, a pocket of efficiency seems to have been d,scovered. Technically, the performance of these stocks over recent years as reflected on the most active and hew high lists cannot be dismissed. We are, of course, aware of the outstanding performance of stocks like Canadian Superior Oil and Dome Petroleum. However, the concentration of this group can be extended to other technically attractive stocks such as Ashland Oil, Asamera Oil, Aquitaine of Canada Ltd., Canadian Homestead Oils, Gulf Canada Ltd., and Husky Oil Ltd. to name a few. Until the technical strength of this group is arrested it can be said — as the Canadian O,ls go so goes the American Stock Exchange Index. Dow-Jones Industrials (1200 p.m.) 846.85 ROBERT J. SIMPKINS, JR. S &P Composite (1200 p.m.) 100.08 DELAFIELD, HARVEY, TAB ELL Cumulative Index (3/15/79) 726.98 RJS rak No statement or expreSSion of opinion or (Iny other maNer herein contolned IS, or IS to be deemed to be, directly or indirectly, on offer or the soliCitation of an offer to buy or sell ony SeCUriTy referred to or The matter IS presented merely for the converlenCI; of the subscriber While oNe believe the sources of 01,1( informa- tion to be reliable, we In no way represent or the accuracy thereof nor of the statements mude herein Any action to be takcn by the subsc(lber should be based on hu own Invesllgotlon and Information Janney Montgomery Scott, Inc, 0 a corporatIon, and officers or employees, may now have, or m(ly later toke, or trodes In respect to any securities mentioned In thiS or any future luue, and such position may be different from (Iny views now or hereafter expressed In thiS or ony other Issue. Janney Montgomery Scott, tnc , which IS registered With the SEC as on Investment adVisor, may give adVice to ItS adVISory and othel customers Independently of any statements mode In thiS or In any other Issue Further InfOrmohon on ony securIty mentioned herein 1 ovoiloble on request 'aaa r aa ill aaaa. aa aa Rl ill aaro Q a,a…, ……. aa D C1 ' ao ' rnD Cl gat 93 8' …. at JJQ at foot at -1,)0 Qt .139 — . Ilr 'NiT at ..tfW aL (idtl 8t. Qj'/ 8t t.tlf' I,L tt-l.JO 'em Ll. 'JfltI u.-W H MY' UJ (.L u. Me u 9L 'J30 9L .9l.-t'l! .os 9L llf1lI 9f(' 9110' Sf ,LtIl 9L-(ltfI./ 9/ 93,1 91'. ''t/f'' Sl. lJO Sf !at.! 51L LJa 91 .os Sl. 9fl\f Sl.- 'll' 9LtT' SL 9L-fl'lJ – – – F– Ill.-'JO t)J .J3S 'ttL- 'lY' tT' , a ' a 00

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Tabell’s Market Letter – March 23, 1979

Tabell’s Market Letter – March 23, 1979

Tabell's Market Letter - March 23, 1979 page 1
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TABELL'S MARKET LETTER 1 J 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCI( eXCHANGE. INC MEMBER AMERICAN STOCK eXCHANGE March 23, 1979 .The m,rket newclpsing high for the ,year oJ861.31 On, the Dow-Jones Industrial -Avefage. proper-perspective'by reviewing past major (20), intermediate (10), and minor (5) market swings on the Dow-Jones Industrial Averages in the chart below. COMPDTED – DJl8 SEI sza eel 19ZB 19l1! inft 1978 1.RoI 19/9 t o e.l9Z9 lw The advance of the DJIA from 742.12 on February 28th, 1978, to 907.74 on September 8, 1978, qualifies as a major uptrend, an increase of 22.32. From this high an intermediate term correction of 13.49 carried the DJIA to a low of 785.26 on November 14, 1978. From the November, 1978, low through yesterday'S close the DJIA has re-established the uptrend which was briefly interrupted by the minor decline between January 26 and February 27 of this year when the Dow-Jones Industrial Average declined 6.14 from 859.75 to 807.00. As was mentioned in last week's market letter, a posting of 860 on the DJIA would clearly signal an upside breakout on our pOint and flgure charts. Let us examlne the objectives indicated more closely. Our five-point unit and ten-point unit charts of the DJIA are shown on the reverse page. Two sets of upslde objectives appear logical and can be instructive. The first set of objectives indlcates 880-885 on the ten-pOint unit and five-point unit charts respectlvely. These objectives were determined prior to the January 26-February 27 decline earlier this year. Slnce then, the short-term decline has broadened the potential base increasing the upside objectives to 930-940. It is interesting to note the first set of objectives 109ically counts into overhead supply in the 870-910 area whlle the latter set of objectives counts into new high territory. As stated earlier, the upside breakout of 860 has occurred. Utilizing point and figure analysis, two possible senarios have been developed to measure the extent of the potential upside move. Either set of objectives seems plausible. However, time will be needed to determine which one will be operative. Dow-Jones Industrials (1000 a.m.) S &P Composite (1000 a.m.) Cumulative Index 3/22/79) RJS rak 31 101.67 738.44 ROBERT J. SIMPKINS, JR. DELAFIELD, HARVEY, TABELL No statement or expression of opinion or any other mailer herem contolned U, or IS to be deemed 10 be, directly or indirectly, on offer or the soliCitatIOn of on offer to buy Of sell any lecunty referred to or mentioned The mOiler IS presented merely for the conver'lenCE; 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 he'em Any action to be taken by the subSCriber should be based on hiS own investigation and Information Janney Montgomery Scott, tnc. as a corporatIon, and ItS officers or employees, moy now have, or may aler lake, positions or trades m respect to any securities menlloned m thiS or any future Issue, ond such POSItion moy be different from ony vIews now or hereofter expressed In thiS or any other Issue Janney Montgomery Scot!, tnc, whICh IS registered wllh the SEC as an Investment adVisor, may give adVICe to Its Investment adVISOry and other CVstomers Independently of any statements mode m ,I'lIS or m any other Issue Further Infarmatlon on any security mentioned hercm IS ovollable on request Ico .00 … ——- POINT DJII 700 DOW JONES INDUSTRIAL INDEX 1977 5 POINT DJII

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Tabell’s Market Letter – March 30, 1979

Tabell’s Market Letter – March 30, 1979

Tabell's Market Letter - March 30, 1979
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r r TABELL'S MARKET LETTER L-. 909 STATE ROAD. PRINCETON. NEW JERSEY 08!540 DIYIBION OF MEMBER New YORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE March 30, 1979 . The . below h!ll'!. py,,!s.i.n. Rast as an f–the kmd of thought process that–ought' t6– go- into-investing;- It can, -actually, be gener-al- lzed to a great many situations beyond the stock market since it is designed to illustrate the problems involved in any situation where one is forced, as is the case in the investment pro- cess, to make decisions in the face of uncertsinty. As the vertical columns of the table illustrate, there are two possible states of the stock- market world, i. e., the true direction of the market at a given time may be either up or down. While one may have an opinion, founded or unfounded, about this direction, that opinion none- theless will fall short of absolute certainty. Likewise, in this admittedly over-simplified case, there are two possible postures as regards equities — one may be either long or not long. The four possible combinations of world-states and decisions result in two ways to be right and two ways to be wrong. The two wrong boxes are analagous to two sorts of investment risk. It is always possible, in the simplified environment illustrated, to shield oneself entirely from one of the two MARKET DIRECTION risks. For example, it is possible to protect oneself com- UP DOWN pletely agsinst the possibility of stocks going down simp- ly by not owning them. By definition, however, such procedure necessitates full exposure to the opposite risk — that of missed opportunity in a stock market that rises. rig h t wrong In the real world, of course, it is possible to trade off one risk agsinst the other in an almost-infinite series of III gradations — but always with the proviso that it is never without – total' other. We raise this issue once more at this time because we detect, we think, today, what amounts almost to an ob- session with one of the two risk areas, the risk that the stock market may decline, indeed, decline substantially. For the past year, works of both fiction and nonfiction dealing with impending economic disaster have been featured on the standard best- seller lists. The latest mini-growth industry appears to be so-called gloom-and-doom-seminars, sessions at which presumably rational investors pay substantial sums of money to hear an intermidable series of speakers assure them that the world is coming to an end. Out in the fever-swamps, fort- resses are being constructed for protection against the depredations of a crazed and starving populace. Even in the relatively staid world of institutional investing, record levels of cash abound. What may be called disaster-chic seems to have become the order of the day. What the table suggests, of course, is that there is another sort of stock market risk, the risk of not taking advantage of a stock market which advances substantially. There is a popular aphorism reminding us that we only go around once, and there are, in each investor's lifetime, a limited number of bull markets. Fsilure to take advantage of these limited opportunities is, in the long run, as detremental to successful investment as failure to recognize the risk of loss. It is this recognition that we see being regularly ignored at present. We will enter at this point the necessary disclaimer that none of the above is to be taken to forecast the imminence of a major bull market — or at least the immediate imminence of one. We are, we hope, just as aware of the problems, technical and .rl,lndamental, confronting both the economy and the stock market as are the few thousand or so pundits who enumerate them regularly in reams of print. We do not in view of these factors, we confess, see the likeli- hood of the stock market's moving immediately to substantially higher levels. Nonetheless, the technical situation, as we see it, is not one subject to massive- deterioration and, indeed, over time, seems susceptible to improvement, perhaps, indeed, to dramatic improvement. It is perhaps just the sort of market one would expect in an era where disaster-chic has become fashionable. Dow-Jones Industrials (12;00 p.m.) S & P Composite (12 00 p. m. ) Cumulative Index (3/29/79) 863.91 191. 75 745.30 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL AWT;rak ,- No stglemenl or expn!Ulon of opmion or Qny other matter herein contmned IS, or 1 10 be deemed to be, directly or Indirectly. an offer or the soliCitation of on offer to buy or sell ony secunly referred 10 or mentioned The moiler 1 presented merely for the converllena. of the subscrtber Wh,le we believe the sources of our mformo t,on to be reliable, we ,n no way represent or guarontee the occuracy thereof nor of the statements mude herem Any octlon to be token by the subscriber should be bosed on hiS own Investigation ond mforma1ron. Janney Montgomery Scott, Inc, as a corporation, and Its olf,cers or employees, moy now have, or may loter take, pOSitions or trades In respect to any seCUrities menltoned In thiS or any future Issue, and such pOSition may be dilferent from any views now or hereafter expressed In Ih,s or any other Issue Janney Montgomery Scott, tnc , which IS registered With Ihe SEC as on Invulment adVisor, may give adVice to lis Investment adVisory and othel customers Independently of ony statements mode In thiS or In any olher Issue Funher information on any secunty mentioned herem IS avolloble on request

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