—————————————————- TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE. INC MEMBER AMERICAN STOCK EXCHANGE As we stated last week and have repeated in previous stUdies of the Dow-Jones Industrial Average. an identifiable year-end rally has taken place every year since 1897. Stated in more precise terms. this means that there has never been a time when there has not been a January close higher than the highest December close subsequent to the December low. For 79 years through 1975. this has been ture. However. in 1976-77 and 1977-78. this failed to happen. With yesterday's close of 820.31. the Dow-Jones Industrial Average is flirting with the December 3 close of 819.62. Clearly in terms of historical perspective. this potential violation of the December low may no longer be considered an exception to the normal behavior of the year-end rally. The short-term. oversold condition of the general market may still prevent the Dow from closing below its December low. 12/29/78 12/31/79 Change DJIA S&P 500 NYSE Index ASE 805.01 96.11 53.62 150.56 838.74 107.94 61. 95 247.07 4.19 12.31 15.54 64.10 The above table shows the performance for 1979 of a rtumber of these market indices. The disparity in these performance figures can be better understood by first briefly reviewing the construction of these indices. and second. identifying the component parts of the indices. The D9w-Jones.lndustril1J Average. which rellresents over one-fourth of the total -of all listed NYSE stocks. is a price-weighted inaex. and has. over the years. become nominated by a handful of stocks. The recent replacements last year of IBM and Merck for Chrysler and Esmark in the Dow appear to be more representative of this industrial index. Stock splits in the DJIA are treated by changing the divisor by an amount needed to equal the value of the average before the split. Assuming stocks that rise in price are eventually candidates for stock splits. their importance is reduced by a lower weighting in the average. The Standard & Poors 500. NYSE Composite Index. and the American Stock Exchange Market Valuation Index are all weighted according to the aggregate market value. reflecting total value of common stock capitalization. In the case of the NYSE Index and ASE Index. this would include the market price times the number of shares outstanding representing all issues traded on their respective exchanges. The components of the S &p 500 are made up of 500 larger capitalized stocks. regardless of where the stocks are traded. The second reason for the difference in magnitude of the various indices can be traced to the components of the various indices. The Dow-Jones Industrial Average.containing basic-industry cyclical issues. has been under performing the broader S&P 500. reflecting poor relative strength in this concentrated area. The New York Stock Exchange Composite includes all stocks listed on the New York Stock Exchange and reflects better performance relative to the Dow because of weight accorded secondary issues. The extreme extension of this performance is reflected on the American Stock Exchange Valuation Index where secondary issues represented by the Canadian oil and gas sector have been the only game in town. It is not difficult to identify the positive performance last year of individual stocks within these averages such as those associated with the computer. energy. metals. and machine tool groups. to name a few. We must, therefore. continue to examine the 'performaD.ce of these indices. understanding their limitations in order to monitor and indentify potential changes in leadership for the coming year. Dow-Jones Industrials (11 00 AM) S&p CompOsite (1100 AM) Cumulative Index (1/3/80) 825.51 105.98 767.85 ROBERT J. SIMPKINS. JR. DELAFIELD. HARVEY. TABELL RJSsla No stotement or (!)(press!on of Op'flton or any other maHer here'n contained IS, or 1 0 be deemed to be, dIrectly or ,ndirectly, en offer or the soliCitation of on offer to buy or sell ony secunty referred 10 or mentioned 1he moiler IS presented merely for the converlenc 01 the subscnber While Ne beheve Ihe sOlsrces of our ,nforma t,on to be reliable, we In no way represent or guarantee the accuracy thereof nor of the statements mude hNeln Any action to be by the subscr.ber should be bosed on hl5 own Inve5tlgolmn and Information Janney Montgomery Scali, Inc, as a corporation, ond ,IS officers or employees, may now have, or may 10ler lake. pos,IJons or ,rades In respet' to any secufJlles mentioned In thJS or any future and SLlth position may be different frorn ony views now or hereafter In thiS or ony other lSue Janney Montgomery Scoll. Inc, wh,ch IS registered With Ihe SEC as on InvesllT1ent odvlsor. may gIve adVICe 10 Its Investment adVisory and other customers Independently of any slCllemenls made (n thiS or In any other Issue Furlher information on ony secunty mentIOned herein IS available on request

— …—– TABELLS MARKET LETTER 909 ST…..TE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF' MEMBER NEW YORK STOCI( EXCHANGE, INC MEM9EA AMERICAN STOCK EXCHANGE January 11, 1980 – …- '\ .;;… . – , For 79 years through 1975, the year-end rally had invariably contmued for at least a day or so on into the new year. In 1976-77 and this failed to happen', with the Dow moving im- mediately down from its December 31 high. This year, the Dow has returned to the long-term pattern of establishing a year-end rally. In the process, the December closing low of 819.62 on the Dow, which we discussed last week, was closely tested. This year-end rally pattern, as our readers are aware, is an indicator to which we have been drawing attention for a number of years. It has, of late, begun to attract fairly widespread notice, especially since last year's January ,action again proved an accurate harbinger of the year's trend. Many writers have suggested that the first five or the first ten days of January, or the month itself, tended to forecast the year's action. There might be some truth in this, but a look at the record shows that it is not all that simple. On the opposite page is shown the yearly performance of the Dow-Jones Industrial Average for various periods during January, together with the subsequent performance till the end of the year. An asterisk denotes when the direction for the January period under study is the same as the subsequent period to year end. The following table summarizes this January action for the past 54 years as related to the 5-, 10-,and 15-day trading periods, plus the month of January as a whole, followed by the subsequent year's trend in each instance. For example, the first line shows that the market was up 35 times and down 19 times for the first 5 days of January. In the 35 years of a 5-day uptrend, the fullyear trend was up 26 times and down 9 times. The 19 five-day downtrends produced 8 up markets and 11 ; s1l.9J.Vn …….,.,,.'.C..''-''-….. January Period 1st 5 Days 1st 10 Days 1st 15 Days Entire Month Market UE 35 33 29 35 QE. 26 22 23 24 Years Trend Down (74) (67) (79) (69) 9 11 6 11 (26) (33) (21) (31) Market Down 19 21 25 19 !!E. 8 12 14 10 Years Trend Down ( 42) (57) (56) (53) 11 9 11 9 (58) (43) ( 44) ( 47) An initial glance at the table would suggest that January, indeed, does have some forecasting properties. However, more rigorous examination will suggest reservations. It is necessary to recall, for example, that, in the 54 years in question, the market was up 34 times or 63 of the total. Thus, a naive procedure of forecasting, on the first of the year. that the market was going to be up would have been right almost two-thirds of the time. To qualify as an oracle, January must better this record. If it does do so, it is done unconvincingly. Indeed, the record for all four January periods in forecasting up markets fails most standard tests of statistical significance. These standard statistical tests will be reviewed in more detail next week. Downward trends in January have a better record. While the forecasting records of 10- and 15- day periods are little better than could have been produced at random, downward trends over the first 5 days, and the entire month of January do appear to be related to the year's trend as a whole. Having documented the historical performance of the January period and accepting the valid- ity of the findings, what statistical inference for 1980 is fact.;that.the,first.five trading days of this year have seen the market up, coupled with a successful test of the Decem- ber low, and a recent upside breakout of the five-point unit chart indicating an objective of 920, reinforces a positive outlook for the Dow-Jones Industrial Average for the coming year. — Dow-Jones Industrials (12 00 PM) S &p Composite 02 00 PM) Cumulative Index 0/10179) 862.20 110.32 811.72 ROBERT J. SIMPKINS, JR. DELAFIELD, HARVEY, TABELL RJSsla No stotement or expression of opinion or ony other molter herem conlalned 15, or IS 10 be deemed to be, directly or indirectly, on offer or the sohc.tatlon of on offer to b\JY or sell any !eamly referred to or mentioned The matter IS presented merely for the convellence of the subscnber While we believe the sources of our Informalion to be rehoble we In no woy leprHent or 91..alontel; Ihe mcurocy Ihert)! n)f )f Ihe Moleme1'\lS. mude herein Any action to be takc!'l by the subscnber should be bascd on hiS own'lnvestlgatlon and Informahon Janney Montgomery ScolI, Inc, os 0 corporation, ol'\d Its officers or employees, may now hove, or moy later lake, POSITiOnS or trades In respect to any securitieS mentioned In thiS or ony future Inue, and 5uch pOSition may be different from any views now or hereafter expressed In th or any other luue Janney Mon'gamery Scott, Inc wh,ch IS registered With the SEC or. an IIvtstment adVisor, moy g,ve adVice to Its Investment odvlsory and other customers Independently of any statements mode In thiS or In any olher Issue Further Information on any secuny mentioned herein IS aVailable en requt! lUI .. ……. ……………1'121 1'128 I t'l30 1931 1'I3Z , , I It 3 1'1111 1'135 t936 ', 1'137 I'! V! Y!AR DAYS END .,.'!!!., ……… ' 1,45 -I,I!!'I -1,011 30,U -Qt,!!1 48,54 -0, 53 I!I,80 -33,23 4,42 54,117 !!l,17 23,20 3,lt7 &0,33 -2,ltll T,3e 1,17 !f,13 1!I,55 211,14 1,04 -33,51 TEN DAYS ., 1 05 -r,lt -1,43 iii iii, II.. 8,2'1 5' i!7 -1,17 -I I,ll I',H YEAR END -.J5i4T0 ff, l'r 52 01 -53,0/0 5 3!! 5.38 Un.H8 .Hn FT!N . DAYS !ND -1,112 !.1!0 -1,011 3',14 -!,'4 52,81 1,38 ';'18,30 !!l,.,11 '';'33,33 -I, Itll ;'51, n 11,11 ';'U,10 ' !!,84 U,!il 5 ,110 ',12 -I,/tl 4!!l,U 24,13 2,!!9 34,!3 !!ND YEAR JANUARV 0.50 , END – 0 ,15 0,51!! -1 .. 88 111,01 , 84 -21, 14 1,51 .38,3'1 ' ' 1,.U S,U 1,33 2.,2IJ , T!! -'5!,51 -U t J4 Z,q, Gl r ! ' 19S8 1'1'1 1'140 1'1111 1911Z 1'14 1'11111 '.19115 1'1411 ,I'lliT 1'148 !94C1 1'150 -.951 9S2 1'153 1'154 1'155 ICiSII 'r1'151 1958 1'15'1 \9110 f 1'1111 1'1112 I4IU I 41 lie I 'IllS 16 \9117 I'lliII 1'1&9 1'110 ' 12,' 1\ '112\ .0-1'17'5 6 ,I!!II 2,1Il8 IIl,U 1,44 I, III -111,1113 1,111 I!!,U 111,541 IIl,U .1II,!1 l!, !Eo 1Il.'1B I!, !i! 0,111 0,53 !!I,U -!, 11 -I,n -I,1i! 2,!!1 1,88 !!l,53 1, n 3,1Il 2,13 1,51 III ,CIT I ,1/1 5,54 0,112 .!!,!8 1Il,!1 .0,2! 2,27 – 2,13 f;28 20,11 .0,811 &,'10 .S,l! I3,Z7 -2,85 -111,58 5,57 I,l! U,III 0',11 1111,31 1',08 25,111 .,,/tll ' 2,04 3,1'1 2, C!l7 1,83 -2.1111 -2,0'1 U,38 1,112 111,51 -1.1111 .11, U 1,9S 5,211 0,511 -I,a1 115 ,115 2,0' 2!1,411 11,11 1.94 eZ,4'1 -11,'8 -i!,115 1I0,i!8 15,51 2,111 .8,811 -2,90 I ,e9 8,02 U,89 12,81 -2,9' 1,54 '1./li! -20,53 1,'15 \,efl II ,27 11,05 !, !13 -13,12 4,541 ,35 12,1!4 -28 ;-441- -I,l' -1,2' -1,'11 III ,at I,n B,55 e',!!I' 2.54 -III,T! I CI to,8It Ull!! -II!! !J' e3 e0,04 11;'08 t'I,1I! 10,8! 7.B2 a',55 III 04 4,88 -10.U !0,1I1I .lI 114 15,111 1283 11 8'1I! e154t'.7U\ 5'Ui!fI -11,04 -!r,l'- ' ',il5 .!,4Z -3,l'l8 -1,05 -0,14 I!J,U 1',43 1,50 4,81 .0,12 -3,25 l!, 15 .fI,11I !I ,111'1 1,' -1,541 ! oil 2,le -5,3!1 .4,40 !!,!0 2,38 -4,' !,1!9 -!I,lt41 lI,!!9 2,41 2,23 \.n ',841 .3,6'1 -I,fli! -\,'8 l! ,67 1, 1t4 'I!!,12 1,48 III, II,!!Z .It,ltll 14,48 ','5 12,19 II'! , !U 24,fT ;'U,!II ' l!,U 1,111 lI!I , !! 0 l' ,82 e,U ',28 2,41 J9,&1 2!,3 8,n II, ',5 JIll ,55 14,!!l5 .4,/t1l 111,2'1' .', t1 !l,U 11,/18 8,4T .,,17 I!, !6 ;'\4,32 lI,n 3,55 U,41 ;.U,..,- 0,84 .T,lt '4,Sl 3,2' .5,14 9, .10, .. 1 ' -I,'U 5 .. 11 I oil 1I,8C1 lit 'I! ,8,Z! II1J r All !!S,S4 II,U el3t42 l,U e,1I1!! .1,J Itl'! 1',0! 0,8! Till 0,n ,'5 t6, .73t,08l.l. !II,I 1'1,4 J,U 2,08 e,J5 11'1 ;41,0' '4I,1!It 14,!!! -l,QlII !i!,U .4,26 e.,14 4,12 i,n J,'U 1,111 II,n 11, ',lI!! .U,1t ' 8,11 fI,S0 .S,III! UtI! ,-UtU .T,U i!!lCIJ 1,11 – ., 4 Ill . – UI!1'1'5 197!1 141 1978 14119 !,11 !II,t5 ',52 – 10,115 e2,1/1 -15,411 5,/t1 2,U !!,81 1,28 t', ',n 8,1I/t -',2l1 -, IS 5,111 II,JI I. !I,It lI!l,6S .4,2111 -',28 /I, III JIIl,U ,48 .. 1!,/t4 4,45 111,03 ' IlI,tIt 14,01 '!1110 4,iI! J,U e12,91 .1I,5f1 -0,010 , OIR!eTtoN 0' JANUARY TRADING P!RtOD SAME AS SUBS!QUENT OIRECTION 01' MARKU TO !AR

— TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY DIVISION OF MEMBER NEW VORK STOCK EXCHANOE, tNC MEM8ER AMERICAN STOCK EXCHANGE January 18, 1980 It is almost unreasonable carping to voice any criticism of the way the stock market has acted so -,- — September-October weakness, and contiriuation'of the -year-end-rally1iito January iooK –, place almost precisely on schedule, preceded on the first couple of trading days of the year by a test of that base prior to the breakout. The clear-cut move above the 850 level which took place this week I completes the base pattern, confirming the end of the short -term decline from last fall, and suggesting that the market has now moved into a new intermediate uptrend phase. The implications of the head and shoulders base formation between 800 and 850 on the Dow are, if followed through to their logical conclusion, optimistic indeed. It is now at least plausible, consider- ing the extent of this base, to read upside targets above the 900 level, thus suggesting that the Dow may finally achieve new high ground above its previous peaks in September, 1978 and September, 1979. All this would then make it at least arguable,that the entire 1977-79 period, which the Dow spent almost exclusively in the 800-900 area, constitutes a base formation. This base, in turn, is wide enough to suggest the penetration of what now becomes relatively minor overhead supply between 900 and 1000, and in turn, raises the possibility of a denouement to the relatively flat trading range which has con- tained the DJIA since the middle 1960's. We have been mentioning that trading range in this space for almost a decade now, and have suggested that its eventual resolution would be on the upside, although we had no idea when such a resolution might take paIce. Such an upside resolution now appears more plausible than has been true for quite some time. The formation of this pattern, moreover, has taken place'accompanied by highly favorable volume characteristics. Trading bettered 50 million shares on six of the first ten days of the new year, and this activity was accompanied by an almost 50-point rise in the Dow from a January 3 close of -820.31 to a Wednesday high of around 870. It seemed obvious to even the most jaded observer that big-money demand has entered the stock market scene to an extent almost unprecedented in recent years. Under-trie mfluenceof-fleavy ;-most-indicatorsm-market–r– momentum, even those which had turned down last fall, moved again into positive territory, suggesting the continuance of a positive major trend. It can hardly be gainsaid that 1980 seems to be off to an auspicious start, A number of questions, however, must be raised. It must be noted, for example, that the advance so far lacks the breadth one would normally associate with a move as dynamic as this one in the aver- ages. There were, it is true, two days when more than 1200 issues advanced and a couple more when advancing stocks exceeded 1000. It is not necessary to point to the action of esoteric breadth indices to suggest that such action is sub-par in light of the extent of the move in the averages. It is only necessary to recall, for comparative purposes, that when moving down last October, the market had two days where declining stocks averaged 1700 and a couple of more where they exceeded 1500, Any- thing remotely comparable on the upside has yet to manifest itself. The advances' lack of breadth is, we think, manifested in individual stock patterns. A fairly large number of individual issues, rather than moving ahead to new highs, have been moving laterally below highs made last summer and fall. Potentially, at least, it must, therefore, be noted that a fair number of individual top formations exist. The market, in many ways, seems to have come full circle from its behavior of a couple of years ago. At that time, the averages and, by extension, the leading issues contained in those averages, suffered from an obvious- lack of the institutional buying pressures needed to move large capitalization stocks. Where the averages were doing nothing, however, a fairly large number of secondary issues were behaving extremely well. At the moment, by contrast, institutional buying pressure, as evidenced by the last couple of weeks' volume, has obviously returned and, as might be expected, it is concentrated among first-tier issues, explaining the averages' excellent behavior, To date, however, upside action in secondary stocks, so -characteristic of recent- markets, appears lacking;- One of the oldest of Wall Street maxims concerns the inadvisability of fighting the tape, and it is certainly not our intention to do so in the present instance. There is certainly no reason .why the upside pressure, now concentrated in large-capitalization issues, cannot spread once more to the broad mass by equities, producing belated confirmation of an uptrend by breadth action which, in turn, would suggest a sustainable upswing. It is, indeed, not at all unprecedented for major bull markets to begin with a concentration in primary issues and have the action broaden to inClude secondary stocks at a later date. Such action, if it cocurs, would be bullish indeed. It must be noted, however, that it has not, as yet, taken place. ANTHONY W. TABELL Dow-Jones Industrials (1100 AM) 862.12 DELAFIELD, HARVEY, TABELL S&p Composite (1100 AM) 110.63 Cumulative Index (/17/80) 823.14 AWTsla No statement or ew;prenlon of op!l'lion or ony other moiler herein tontamed IS, or IS to be deemed to be, d!rectly or !nd,rectly, on offer or the soilcltatlon of on offer to buy or sell (my secunty referred to or mentioned The molter IS presented merely for the onverent(l of the substrlber While we belIeve the sources of our Inferma tlon to be relloble, we ,n no way represent or guorontee the accuracy thereof nor of the statements mude herein Any oellon to be by the subSCriber should be based on his own mveST!gatu;m ond mformallon Janney Montgomery col!, Inc, os a corporation, ond ,ts offlters or employees, may now have, or may loter toke, posltlon or trodes In respect to ony securities menhoned In Ihls or ony future Issue, and such posItIon may be different from ony VIews now or hereafter epressed In Ih,s or ony olher Issue Janney Montgomery Scott, Inc, which IS registered With Ihe SEC as on InvestmMt adVIsor, moy gIve adVIce to Its mvestment adVIsory ond othel customers Independently of any statements mode In It'IIS or In any other l\Sue Further mformahon on ony security mentIoned hereIn 1 avollable on request

f ! e09 STATE ROAD. PRINCETON. NEW JERSEY 08540 DIVlelON OF MEMBUI NEw '1'0 STOCIC EXCHANGE. INC. MEM8E,. AME'CAN 8TOCI( EXCHANGE January 25, 1980 The extraordinary short-term upswing which featured the first month of the decade of the 1980's continued last week with an 11-point rally to a new closing high on the Dow on Wednesday followed by further strength through mid-day Thursday. 'In an attE!I1ipt to draw attention to those aspects of the stock market which were less than immediately obvious, we used this space last week to suggest that breadth characteristics on this advance had fallen somewhat short of normal expectations. This remains the case, and it will be a factor that bears watching. We would, however, be failing our duty to our readers were we not to draw attention to the positive aspects of what appears to be going on at the moment. I As an introduction to this discussion, we are compelled, once more, to drag out, with due apolo- gies, the following quotation. – The equity market from 1942 until 1966 was buoyed by a secular uptrend advancing at the rate of about 9 a year on the Dow. True,there were bull markets and bear markets within the framework of that uptrend, but the bull markets were long and dynamic and the bear markets, although painful, short and quickly recovered. There is real evidence, at the moment however, that the secular up- trend is no longer with us. Indeed, computed from 1966, the slope.of the DJIA has been virtually zero. The most statistically accurate deSCription of the market on average for the past five years Is that it is a wide, flat trading channel. That comment appeared in this nine years and one week ago, and we have probably resur- , rected it a half-a-dozen times since. It was originally used, In January, 1971, to indicate that the then-existing technical pattern suggested a continuation of the trading range which had characterized the half-dozen previous years. That trading range, with the Dow spending most of Its time between 800 and 900 despite occasional excursions in either direction, remained In effect for the entire remain- der of the decade, an eventuality we did not necessarily foresee when we first drew attention to it. Although there have been sporadic occasions, in 1973 and 1976 on the upside and in 1974 on the down- side, when it looked as if the trading range might have been decisively penetrated, no attempt over the entire ten years just past has followed through. It is for this resson that the current rally, from a technical point of view, holds promise, for, as we noted last week, It presents at least the possibility of the end of that secular trading range and the emergence of a new seculsr uptrend, an uptrend transcending simple bull and bear markets. The significance of the January rally Is that it constitutes what could be the initial link in a yet- to-be-forged chain of evidence of stock market strength. The Dow-Jones Industrial Average, follow- ing its decline from last fall, formed a rather clear cut and impressive base formation in the area between 798 and 850. The recent breakout from that formation suggests an upside target of 920 which would move it above its best level of 1979 and its peak of 907 In September, 1978 (The pattern for the Standard II; Poors 500 and other broad indices Is roughly similar with a bit more upward bias. Last fall's high in the 500 exceeded the 1978 high by an appreclsble amount, and new peaks have already been achieved on the recent rally. The pattern, however, Is otherwise similar.). If Elne accepts the plausibility of a rally to the mld-900's, It Is then necessary to envision precisely where that would leave us. The market would then, in terms of the Dow as well as most other widely- used Indicators, have moved decisively above all the peaks that have been established since the bear market of 1976-78, The Dow has, during almost all of that period, traded within the range of 800-900 mentioned above. Ability to achieve significantly better levels would almost have to be read as a suggestion that the 2!-year trading range which began in the fall of 1977 constituted a base formation, presaging a new and important upside move. Now since that base formation occupied 2. years, its upside implications are, of necessity, impres- sive. Various upside readings are possible, but the most plauaible one on the Dow would be in the middle 1100's. Such a move would complete the third and final link. At the level suggested, the whole decade-and-a-half trading range would be decisively penetrated on the upside. That penetration would, over the long term, suggest still higher levels. In other words, a brand new stock market cycle, one whose shape is yet unclear, could be upon us. Now all of this depends not only on the completion of the chain of evidence outlined above, but on the continuation of positive technical action as the evidence continues to unfOld. In the evolution of such a long term pattern, there are always question marks, some of them, such as potential breadth weakness, which can now be foreseen, others which cannot now be forecast and which may evolve later on. The temptation to think In terms of decades is probably as overdone In the stock market at it Is elsewhere, but it seems, as the decade of the 1980's opens, a truly criticalluncture for equity prices, Is; Indeed, being approached. Dow-Jones Industrials (1200 PM) 874.32 S II; P Composite (12 00 PM) 113.16 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL Cumulative Index (1/24/80) 834.18 AW7 sla No .toternen! or elCprelilon of opinion or ony other morter herel contolned , or 1 to be deemed 10 be. directly or Indirectly, on offer or the lollcllotlon of on offer to bvy or lell any le(umy referred ta or menlloned The matter h presented merely for the converlen(e of the lub(flber While we believe the t.Ources of our Informa- tion to be 'elloble, we in no way represenl or guarontee the accuracy thereof nor of the statements mude herein Any ac-hon to be token by the svb5CTlber shovld be bosed on hi. own Investigation and Informotlon Jonney Montgomery Scali, Inc, 01 a c-orporol10n, and liS officers or f!'mpIOYf!'es, moy now have, or moy later toke, positions or trades In respect to any .KUrllies menhoned In thiS or any future sve, and .uch pos.hon may be ddferel'll from any vieW'S now or hereolter In thIS or any other IlSve Janney Montgomery Scott, Inc, wl'ch IS fl'lglSlered With the SEC 01 on Investment adVisor, may g.ve adVice to lIS Investment odvl1ory and olher custome,. Independently of cny ,tolements mode In ,I'lis or In ony olher nsue fuNher ,nformatlon on ony secullty mentIoned herem 15 available on requesl

r TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF' 'MEMBER New YORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE February I, 1980 .., —–. tCe'r,t-nhat tne' market advan7e since the lows of last year, has been a much more restricted affair than would seem to be apparent at first glance. Certainly there has been nothing to complain about in the action of major averages, such as the S & P 500 which, on Wednesday, reached a new six-year high of 115.20. That particular indicator has now moved up some 32 from its February, 1978 low, a figure comfortably within the historic frame- work of bull markets. More importantly, it has moved well above two previous benchmark highs. The first such high was posted in September, 1978 at 106.99, following which peak the index dropped to 92.49 in November, 1978 before recovering its entire loss. The fall-1978 peak was, in turn, exceeded by a modest amount on October 5 of last year when a high of 111. 27 was achieved. This was followed by a drop to 99.87 in mid-November before new peaks were attained. During the past two weeks, the 50o-stock Composite, therefore, now finds itself well over 3 above its best level of 1979. It is worth examining, therefore', whether this is a performance that has been shared by a large number of its components. The answer is that this is not necessarily the case. There are some 535 stocks that are contained in the Composite and its subindices, the extra ones being accounted for by stocks which are part of subindices not included in the 500. Of the 535 stocks, 25'9, based on weekly closing figures, have managed to post new highs above their best levels of 1979. The obvious corollary is that 276 issues, better than half the universe of leading issues under study, have failed to do so. 39 issues, as a matter of fact, managed to find themselves at recent highs down 20 or more from their best levels of 1979. Included in this group is a diverse list of well-known names including, Avon Products, Coca Cola, Eastman Kodak, First Pennsylvania, Goodyear, Minnesota Mining, Polaroid, and Zenith. The occurrence in that list of more than a few of the institutional darlings of 1972 73 is, – –pineroiouor ,vineoww, not a coincidence. The inevitable corrective p-rocess, occasioned efglif10ng years past, isstill apparently with us-. -. – , – by the excesses — of that – The relative narrowness of the advance is perhaps even more striking when one compares the action of individual stocks at successive highs in 1978, 1979, and 1980 thus far. Due to a smaller available price history, we are dealing here with 213 issues, including all of the leading S & P 500 stocks. 69 of these issues have managed to follow the lead of the S & P 500 itself posting successively higher peaks in 1978, 1979, and 1980. Interestingly, however, a somewhat larger number, 76 of the 213 issues, showed 1979 highs lower than their highs of 1978, and 1980 peaks thus far, lower than their highs of 1979. Market leaders, in other words, were iust about balanced in number by an equal- sized group of poor performers. When one examines the 69 stocks which posted successively higher peaks, the narrow scope of the advance becomes even more apparent. 15 of those 69 issues are either in the oil industry or related to it. Eight more are chemicals, six are drugs, and five are in the forest products area. Electronics, machinery, gold, and defense stocks also find themselves represented. The issues posting successively lower lows constitute a somewhat more diverse group, although they appear to have a major common denominator in that large numbers appear to be related to consumer spending. 14 issues appear to fit into the general consumer category and another dozen are in the category of foods, soft drinks, and beverages. Another half-dozen are in retailing and four more can be categorized as leisure-time issues. An additional five are in the automobile and tire category. All of these groups, of course, fall into the broad consumer goods area. A detailed study of the market action of the past two-and-a-half years, in other words, suggests quite clearly an advance that has been lead by a relatively restricted number of issues which, due to their heavy weight in the averages, have been able to pull those averages to new high territory. This strength, some of it indeed quite exceptional, has masked fairly pronounced weakness in a number of important categories. There are, we think, at least two facts to be inferred from this. The first is that despite the favorable market climate that has existed since early 1978, stock selection has been a necessary component in investment success. It has not been, to date, at least, a bull market in which all major issues participated. The second question raised is whether the internal weakness documented above is sufficient to call into question the sustainability of the advance. As we have noted in past issues of this letter, we do not think that this is now the case. Continued narrowing of the advance's scope, however, will have to become, at some point a cause for concern. NOTE Comment on individual issues are based on techniCal factors only. Further information avail- able on request. Dow-Jones Industrials (1200 PM) 874.49 S & P Composite (12 00 PM) 114.29 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL Cumulative Index (1/31/80) 837.14 AWTsla No statement or expression of OP'niOn or any other motter herem contolned IS, or 15 to be deemed to be, directly or Indirectly, on offer or the 501;ltollon of on offer to buy or sell any security referred 10 or mentioned The matter IS presented merely for the of Ihe subSCriber Whde oNe believe the sources of our Informa- tion 10 be reliable, we In no way represent or guarantee the accuracy Ihereof nor of Ihe statements mode hcreln Any oclion to be lake'!. by Ihe subSCriber should be based on hiS own investigation and Informollon Janney Monlgomery SCItt, Inc, as a corporotlon, and 115 officers or employees, may now have, or may ioler lah.e, positIOns or trades In respect 10 any seCVII,es mentioned In thiS or any future Issue, and such position may be different from any views now or hereafter expressed In Iha or any other Inue Janney Montgomery Scot!, tnc , which 15 registered wllh the SEC as on Investment adVisor, may give adVICe 10 Its Investment adVisory and other customers Independently of any statements mode In Ihts or In any other ISSue Further mformallon on any secVfI'Y menlloned herem JS ovo/Job/e on request

I I , TABELL'S MARKET LETTER – – – – – —- – – – – – – – – – – 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF' MEMBER NEW YORK STOCI( EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE February 8, 1980 It is not unusual for financial headlines to feature the phrase, Dow-Jones Average, and' such was that did the newsmaking, but the Dow-Jones Transportation Average, which turned in a performance reminiscent of the days of Daniel Drew and Jim Fisk. That other Dow-Jones average posted a 10plus point gain on Wednesday and was ahead by as much as another seven points on Thursday before succumbing to profit taking in subsequent trading. Reaching an intraday high of 301.42 on Thursday, the Transportation index is now, with its recent strength, the second major indicator to score what has been, over the past decade at least, a rare achievement, i.e., a new ail-time high. The previous peak for the average, at that time consisting of 20 railroads, had been at 281. 75 on December 2, 1968. The lranspostation Average, therefore, follows the New York Stock Exchange Common Stock Index, which recently moved to a newall-time peak above its high of early 1973. Other major indices currently find themselves at varying levels with respect to their all-time record levels. The American Stock Exchange Index, of course, left all previous benchmark highs somewhere back in the distance a year-and-a-half ago. The next major attempt at all-time high territory will probably be made by the various Standard 8. POOl'S averages, led by the S 8. P Industrial Index. That particular indicator, which closed on Thursday at 131. 62 reached its all-time closing peak on January 11, 1973 at 134.54. The more widely-followed 500-stock Composite has a bit more territory to cover prior to reaching newall-time territory. The 500 also reached its high in January, 1973 prior to the 1973-74 bear market. That high, however, was at 120.24 versus a Thursday close of 116.28. The Dow Transportation Average and the American Stock Exchange Index are the only two indicators which peaked in 1968-69 and which have now achieved new highs. Most broad-based indicators attained record levels in 1968 and have never come close to bettering those levels since. For averages of this type, the 1970-73 rally, which took the Dow and S 8. P 500 to their all-time records was nothing example, peaked just under 190 in late 1968 and never rallied above the middle 120's in 1971-72. It finally managed to better that peak in this month's trading but still remains a long way below its alltime high of 12 years ago. Our Cumulative Index, a weighted average of all NYSE stocks, peaked out at over 1460 in 1968. Its 1971 rally high was at 1050, and at current levels of 843.94, it is a good ways away from making an assault even on that level. As we have stated in the past, we believe that, in many ways, this index is the most accurate mirror of what has really happened to the average listed common stock over the last dozen or so years. It is difficult precisely to analyze the meaning of this week's extraordinary strength in the Transportation indicator as far as the general market is concerned. The move was, to begin with, an energy move as much as a transportation move, the strength being led by railroads with various forms of energy association. Some domestic oils enjoyed rises during the week even more spectacular than the rail issues contained in the Dow average. Irrespective of this fact and of the recent change in components of the Transportation Average, that average, now in an area free of overhead supply, is apparently still working off the implications of a substantial base formed between 1973 and mid-1975 with its low point at the 1974 low. The ultimate upside target of that base has always been 360 which, while it suggests that we may have seen the bulk of the move in this area, still leaves room for a 20 advance from current levels. It is hardly possible, in the present climate, to regard this as an unlikely prospect. Meanwhi' with all this talk of neWall-time highs, what about the poor old Dow-Jones Industrials, which, for many, constitute the market, rather than the more esoteric indicators we have mentioned above The Dow-Jones Industrial Average finds itself still below its high of September, 1979 which, in turn, was lower than its peak of September, 1978. That peak was, moreover, below the 1976 high which, in turn, was below the all-time record of 1973. Furthermore, that high, it must be noted, was not all that different from the indicator's previous peaks in 1968, and indeed 1966, the first time the venerable Dow touched the magic 1000 level. As we have suggested in past issues of this letter, we suspect it will require a substantive effort at new highs by this index before the existence of a bull market is widely recognized. On a short-term basis, the DJIA has been moving sideways since early January and failed once more in Thursday's strength to better the 890 level. At the inoment, a break below 870 would suggest a possible distributional formation and a test of the base in low 800's. While this eventuality may be unlikely in light of the strength in the other averages, it remains, at least, a possibility. Dow-Jones Industrials (12 00 PM) S 8. P Composite (12 00 PM) Cumulative Index (2/7/80) 884.47 116.36 843.94 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL AWT sla No statement or expressIOn of opInion or any oll,er motler herein contolned IS, or IS to be deemed to be, directly or mdlrectly, on offer or 'he sol,cltollon of on offer to buy or sell ony security referred to or mentioned The moiler IS presenled merely for Ihe converlenCf of Ihe subscriber While we believe the sources of our Informotlon to be reliable, we In no way represent or guarantee Ihe accuracy Ihereof nor of the statements mude herein Any ocllon to be laken by the subscrtber should be based on hiS own investigation and Information Janney Monlgomery Seolt, Inc, as a corporation, and 11 officers or employees, moy now have, or may laler toke, or trades In respect to any securities mentioned In thiS or ony future Inue, and such paslhon may be different from Clny views now or hereafter clI'pressed In this or any other hsue Janney Montgomery ScalI, Inc, which IS registered wllh the SEC as on Inve51ment adVIsor, may give adVice to lIs Investment adVISOry and olhel cvstomef5 Independenlly of any 5/olements mode rn thiS or In any other ISsue. Further information on ony security mentioned herem IS avollable on request

…. ;;,.;- TABELL'S MARKET LETTER 909 STATE ROAC, PRINCETON. NEW JERSEY 08540 DIVISION OF' MEM8ER NEW YORK STOCK EXCHANQE, INC MEMBEA AMEAICAN STOCK EXCHANGE . – -As expecfed iii – ..;. 15. 1980' . ,- advance which has characterized 1980 thus far was interrupted by a rather sharp correction which took the Dow down ten points on Thursday and a like amount in early Friday trading. Interestingly enough. the Dow's advance was rebuffed just short of its attaining a new high above its September. 1978 level. which has now been penetrated on an hourly and intraday. but not on a closing. basis. Possible very-short-term downside objectives center around the middle 870's where there is a fair amount of support. A decisive break below 870 at this point would be disappoiriting and suggest the possibility of a further correction. One of the facets of the recent stock market which has been noted by just about everyone in the punditry business is the recent advance's lack of breadth. The fact that the rise for 1980 to date has been fueled largely by wide moves in energy. natural resource. and defense issues with large numbers of stocks failing to participate is. by now. almost universally recognized. Most commentators have ascribed a bearish significance to this on the theory. not entirely untrue. that poor breadth is a precursor of market weakness. The trouble with this observa- tion is that it is somewhat superficial. Few writers have actually quantified breadth action and compared it to past periods to see if any significance could be ascertained. We have made an attempt to do this. and the initial results do. indeed. bear out the super- ficial observation. There have been very few instances in the past 52 years of stock market history where breadth has been as bad as it has been recently during a market which has advanced as much as this one has. Our basis for comparison is as follows. The recent rise began from lows reached on January 3. the second trading day of this year. From that day to this Wednesday. the Dow rose 10.18 and the S 81 P 500. 12.6. all this taking 1 – ' …. I L i s J l e c e s s a r . y. . market breadth. and as good a measure as any is the simple advan;e /decline ratio. computed by taking the daily advances. subtracting daily declines. and dividing the result by the number of issues traded. Such a figure can be computed for each of the 29 days in question. and the average ratio for the 29-day period then derived. That figure is 0.05794. It now becomes a simple task (assuming access to an electronic data bank of stock market history) to look for previous 29-day periods in which the Dow and/or the S & P advanced by amounts comparable to those mentioned above. and the average advance /decline ratio was lower. AS we noted above. such periods have been few and far between. One such instance occurred. ominously enough. in the late summer of 1929. We are inclined. frankly. to disregard it. along with a number of similar instances in the period 1931-33. Numerous studies have confirmed to our satisfaction that the volatility of that period makes such statistics irrevelant to the present. There have. however. been three instances in more recent times where a wide advance such as the current one was accompanied by equally desultory breadth. They are perhaps worth citing. The first was in September-October. 1939. an interesting comparison because of its relation- ship to war. in this case World War II. and the German invasion of Poland. The sharp rise thus produced topped out just about at that time and was followed by one of the sharpest declines on record at the fall of France in 1940. which. in turn. led to lower prices continuing to the summer of 1942. The next comparable rise did not occur until July. 1955. and, the aftermath of that one was a sharp break occasioned by the Eisenhower heart attack, followed by a move which took the market to new highs by a fairly significant amount in 1956. More recently. there was a compar- able rise in May. 1975. This also was followed by a sharp but temporary break and an ultimate move to new high territory. . . The point of all this may be. simply. that there is no point. A phenomenon which has only three analogies in 52 years of market history. with widely varying results in each case. is hardly one on which one can base reliable statistical conclusions. Our own disturbance at recent nega- tive breadth is as great as anyone's. and it is our intention to do further work on the subject along the paths outlined above. In light of the work done thus far. however. we are reluctant to voice knee-jerk pessimistic conclusions. Dow-Jones Industrials (12 00 PM) 886.60 S 8. P Composite (12 00 PM) 115.78 Cumulative Index (2/14/80) 840.69 ANTHONY W. TABELL DELAFIELD, HARVEY. TABELL AWTsla No stotement or expression of opinion Or ony other molter herein contained IS, or 11 to be deemed to be, directly or .nd.rettly, on offer or the sOlltltatlon of on oHer to buy or sell any security referred 10 or mentioned The matter IS presented merely for the of the subSCriber While He believe the sourtes of our Informo- tlon to be reliable, we In no woy represent or guorantee the occuracy thereof nor of the statements mude herem Any action to be token by thll subscllber should be bosed on hIS own II1vesilgotlon and information Janney Montgomery Scott, Inc, 05 a corporation, ond It officers or employees, may now have, or may later lake, poslhons or trades In respllct to ony SeCurities mentioned 111 thiS or any future usue, and such POSition may be ddferent from ony views now or hereafter expressed 111 thu or any other Issue. Janney Mongomery Scoll, Inc, which IS reglsered With the SEC as on Investment adVisor, may give adVICe to Its Investment adVisory and othel customers Independently of any statements mode 111 thiS or 111 any other ,ssue furthllf II1formotlon on any secunty mentioned herein IS available on requesl

TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW 'tOAK,STOCK eXCHANGE, INC MEMBER AMERICAN STOCI( eXCHANGE February 22, 1980 – —;, – …..,-……….— – ;z ,nA ' -Thursday's sharp' 18-point drop in the Dow-Jones' Industrial Average signalized, in .all probability, the end of the initial phase of the advance which began in early January and the beginning of the first corrective phase of 1980. Based on the present pattern, it is difficult to envision this correction turn- ing into anything of more than minor proportions. In the case of the Dow, a distributional pattern, which has been building through most of February, indeed exists, and suggests, at worst, a testing of the level from which the advance started, around 830-820. The pattern on more broadly based aver- ages is more difficult to read, but if anything, the downside implications in most of these indices are somewhat less serious than those of the Dow. Further vulnerability may emerge if distributional pat- terns broaden on the expected correction, but downside risk at the moment does not appear great. As readers are aware, overall stock market action at least until two weeks ago, has been positive ever since last fall. This firmness has been in sharp contrast to the action of the long-term bond market where trading has been described, not inappropriately, with words like disaster. At the beg- inning of last September, when most stock averages first attained highs which have since been comfortably exceeded, the Dow-Jones 4Q-Bond Average was at a level around 85. It closed Thursday at 66.63 for a decline well in excess of 20. u. S. Government Bonds are supposedly the safest of all investments. In the same period, Treasury 8!'s of 1994-99 have declined from 94 to just over 68. We have witnessed, in other words, a rather ,unique six-month period in which stocks have provided capital protection and long-term bonds have produced major portfolio losses. At current levels, yields on long-term taxable bonds are approaching the 15 figure. There is a reason for all of this which centers around the single word, Inflation, and we have gone through the rather dreary mathematics in this space before. Let us once more go through the motions of calculating the 'true return on a 15, 25-year bond to an investor in the 50 tax bracket. One needs to begin with the rather shocking reminder that, at continued 13 inflation, one hundred for this is to recognize that a bond selling at par today is, in effect, at a 97-point premium over its maturity value, and this premium must be recouped by a charge against income. That annual charge is 3.88 in 1980 dollars. A hypothetical investor, therefore, can anticipate a stream of 15 annual income increments for each 100 invested, out of which the government takes its tax bite, leaving him with 7.50. The value of this 7.50 continually erodes as inflation increases. It is 6.53 in the first year, 1. 86 in the tenth year, and 0.23 in the final year. With the 3.88. constant-dollar, annual charee against it, the income stream actually turns negative after five years and becomes increasingly negative for the subsequent twenty. The total calculated loss at the end of 15 years in constant 1980 dollars is 38.84, producing a real dollar return of zero and a capital shrinkage of 1.95 per year. Even for the tax-exempt investor who can buy a hypothetical 15 bond without a tax liability, the overall return is, in fact, slightly negative. In other words, if such an investor holds a 15 bond to maturity and inflatjon remains at 13, he will have earned no return in real dollars and wind up just about breaking even. To alter this dreary projection, one of two variables would have to change. The first possible al- teration, a consumation devoutely to be wished, would be a decline in the inflation rate. It would, however, be necessary for the inflation rate to drop to 6! to produce a simple break-even return on a 15, 25-year bond to an investor in the 50 tax bracket. It is also possible, of course, that if anticipated inflation remains at the 13 level, available long-term yields might increase. For our hypotheti- cal investor to reach the break-even point at a 13 inflation level, however, an annual yield of 31 would be required. In light of these figures, it seems to us, the sharp decline in bond prices over the last six months has been not at all irrational nor, in our view, has been the recently improved performance of comnion stocks. Current yields on equities may now be from a third t() a half that offered by bonds, but at least dividends offer the prospect of an improvement which may keep pace with inflation, and indeed studies which have appeared in the space have documented the fact that the recent history of stock dividends has tended to achieve this target. The recent rush of new funds to the stock market has come, it seems to us, as sort of a last resort, a realization that, for all the historic vicissitudes of the stock market, there may not be a better place to be. This is a new sort of justification for the purchase of common stocks, but it may well be a valid one. Dow-Jones Industrials (12 00 PM) 868.68 S & P Composite (12 00 PM) 115.11 Cumulative Index (2/21180) 824.18 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL AWT sla No stotement or expression of opinion or any other molter here'n contolned IS, or IS 10 be deemed to be, directly or mdnec11y, on offer or the OI'Cllollon of 07 offer to buy or sell any secunty referred fo Or mentioned The moiler '5 presented merely far Ihe of the svbsc(lbe' While one believe the sovrces of our In,ormo- lion to be rellClble, we In no woy represent or guarantee the accuracy thereof nor ot Ihe statements mude herem Any act,on to be taien by the subscriber should be based on hiS own inVestigation and Information Janney Montgomery Scott, Inc, as a corporation, and Its afflcers or employees, may now hove, or may later loke, poslhons or trades In respect 10 any sewrltles mentioned m thiS or any lutvre Issue, and svch pOSition may be different from ony views now or hereafter e.pressed In '''tiS or any other Issue Janney Montgomery 5c01l, Inc, which IS registered With the SEC 05 on Investme'1t adVisor, may give adVice 10 Its Investment adv1sory and othel cuslomors Independently of any statements mode on thiS or on any other Issue Further mformatlon on any security me'1tlaned herein IS available on request

—————————————————————————————– TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEV 08540 DIVISION OF MEMBER NEW YOAK STOCK eXCHAGE. INC MEMBeR AMERICAN STOCK EXCHANGE '- .'- .. –M February 29, 1980 — – -;-,,–0- There can-be IIftle d6ubt now that when the stock market history-of'1980 is finally compileo, it will note the beginning of a new market phase somewhere around mid-February, probably starting on Feb- ruary 13, the day the Dow-Jones Industrial Average closed at 903.84 and reached an intraday high of 918.17. On that same day the Standard & Poors 500 attained a high figure above the 120 level. The first six weeks of this year were characterized by a dynamic, if somewhat narrowly-based, rally, which brought most broad-based averages back to new high territory and returned the Dow, at that high mentioned above, to the top of the trading range which had contained it since the summer of 1977. Since that time, the market has trended erratically lower, and enough technical deterioration has nOw taken place to suggest that the correctionary phase of the past two weeks is probably not yet at an end. In many ways the stock market story of the past two years has consisted of the Dow-Jones Indus- trial Average underperforming the market as a whole, and present indications are that the Dow remains subject to this same malaise. Of all of the major indicators, this familiar index seems to have the great- est vulnerability. Most of the February action in the Dow appears to have distributional characteristics, and a top that has now been completed by the recent break below 870 is fairly broad in scope. The DJIA began the year 1979 at a level just above 800 and took almost all of last year to inch its way up to the 900 level last fall. In a few short weeks in October-November, it gave up almost the entire gain. However, it recovered this loss almost as quickly and moved once more above 900 two-and-a-half weeks ago. The top formed now suggests at least the possibility of another return to the lower part of this range. A move all the way down to the 800 level would, at this stage, appear somewhat extreme, but there is at least the possibility that such a level might be approached. The strong, suggestion of the current pattern is that the long trading range which characterized the Dow's action since 1977 is, for the time being,not yet over. Other patterns seem to have considerably less vulnerability. 1980, for the Dow-Jones Transporta- tion Average, consisted of a straight-line move from around 245 to 305. There is nothing,in the current a retracement of -this move. The former has already taken place; the latter would carry the Transportation Average some 10 points below its current levels. In the case of Standard & Poors averages, the 500-Stock Composite and the 400-Industrial Index, the tops are more recently formed and suggest a lesser decline. A possible downside target for the 500, now above 112, would be 109, and the 400, currently at 128, could reach the 123 level. Neither of these prospects should cause panic in the streets. The above projections are, of course, short term, and subject to the normal margin for error that accompanies all short-term forecasts. What is more important is to try to fit the present prospect into a long-term pattern. As far as the broad-based S & P indices are concerned, both appear to be in well-defined major uptrends. There is absoloutely nothing in their patterns to suggest that the current weakness constitutes anything more than a minor correction within those uptrends, and, indeed, were the downside targets mentioned above to be reached, both averages would be on strong support levels. In the case of the Dow, as we suggested above, the present outlook is eminently within the context of the sort of pattern that has characterized that indicator for some three years. In neither case, in other words, does there appear the probability of weakness of more than intermediate-term proportions. The present outlook moreover, does not appear to be greatly at variance with our own view of the long-term cyclical picture. Readers of this letter will be aware of our espousal of the theory that stocks reached a major, four-year-cycle bottom in March, 1978. That cycle reached its second anniversary this week. We are perfectly willing to admit that this suggests the mature stage of an advancing mar- ket cycle. However, markets tend to spend a good deal more than half of a given cycle in an advancing phase. Thus a further attempt at new highs once the short-term weakness has spent itself would still be a normal expectation. Neither is the current outlook out of line with a normal election-year pattern. Indeed, the January- February strength .was a bit unusual in that election-year markets have tended to find themselves sub- ject to irregularity during the first half of the year. It may indeed be this sort of irregularity that is showing itself at present. The significant part of the normal election-year pattern is the tendency toward strength in the second half of the year. A corrective phase at this stage would set the stage for just this sort of eventuality. In summary, we think the current technical picture raises the possibility of further market weak- ness over the short term. The more important point, however, is that we see little evidence at this point of any sort of major deterioration. Dow-Jones Industrials (12 00 PM) S & P Composite (12 00 PM) Cumulative Index (2/28/80) 858.28 112.83 800.76 ANTHONY W. TAB ELL DELAFIELD, HARVEY, TABELL

TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER New VORK STOCK eXCHANGE 'NC MEMBER AMERICAN STOCK EXCHANGE March 7, 1980 !Ve. tw.o ..w.eeksagoto. … bonds, suggesting that, assuming the continuance of a continued inflation-ary' environment such as the – recent one, these yields were, in fact, illusory. We went on to point out that, in such an environment, the anticipated yield to most investors on a 15 long-term bond might actually, in real-dollar terms, be negative. An obvious question thereby raised conCerns what, in comparison, might be the comparable yield for com- mon stocks The fOllowing table is admittedly a rather complex statistical exercise, but it attempts to answer that question as fairly as we know how. For each year from 1951 through 1979, the table shows, first, the actual dividend paid on the S & P 500, second, the Consumer PriCe Index, and third, those dividends in real-dollar terms, deflated to 1967 dollars by the CPI. The fourth column, in recognition of the fact that dividends tend to fluctuate over the short term, smooths that fluctuation by taking a five-year average of the deflated figure. The final three columns are the annual percentage rates of change in that five-year average taken over, respectively, five, ten, and twenty-year periods ending in each year. YEAR S & P 500 CONSUMER DEFLATED 5 – YEAR DIVIDENDS PRICE INDEX DIVIDENDS AVERAGE ANNUAL PERCENTAGE RATE OF CHG 5-YEAR 10-YEAR 20-YEAR 1951 1952 1. 41 1.41 79.3 80.0 S1. 78 1.7fi 1. 57 1. 68 1953 1954 1955 S1.45 1.54 1.64 80.5 80.1 80.4 S1.80 1.92 2.04 1.78 1. 85 1. 86 1956 1.74 82.7 S2.10 1.93 4.21 1957 1958 1.79 1.75 85.2 86.7 2.10 2.02 Sl.99 S2.04 3.48 2.70 1959 1.83 88.0 2.08 S2.07 2.31 1961 1962 1963 2.02 2.13 2.28 89.9 91.0 92.5 . .1 8 2.25 2.34 2.46 S 2. l-0—… 2.13 1.99 2.17 1.75 2.26 2.13 3.09 2.61 2.41 19fi4 15 2.50 2.72 93.6 95.4 2.67 2.85 S2.38 2.51 2.86 3.70 2.58 3.0fi 196fi 2.87 98.fi 2.91 2.65 4.49 3.23 1967 1968 S2.92 S3.07 101.6 10fi.4 2.87 S2.89 2.75 2.84 4.85 4.fi3 1.28 3.37 1969 1970 1971 3.1fi 3.14 3.07 112.9 119.1 123.1 2.80 2.64 2.49 S2.86 S2.82 2.74 3.7fi 2.32 0.67 3.11 3.01 2.56 2.83 1972 3.15 127.3 2.47 2.66 -0.71 2.03 2.32 1973 3.38 138.5 2.44 S2.57 -1.98 1. 28 1. 84 1974 1975 1976 1977 1978 1979 3.60 3.fi8 4.05 4.fi6 5.07 5.70 155.4 166.3 174.3 186.1 202.9 229.9 2.32 2.21 2.32 2.50 2.50 2.48 S2.47 2.39 S2.35 2.36 2.37 2.40 -2.90 -3.28 -2.98 -2.35 -1.59 -0.56 0.38 -0.52 -1.17 -1.54 -1. 78 -1.74 1. 47 1. 25 1.01 0.85 0.76 0.75 The obvious caveats must be noted. The table, of course, shows the past record, and there exists no past history of inflation at the current rate. Second, the table shows that constant-dollar dividends peaked in 1966 and have not exceeded that figure since. The five-year rate of change has been negative since 1972, and the ten-year since 1975. The twenty-year rate of change remains only marginally positive. There are, however, some positive elements. It must be remembered that the last three columns show the rate of increase or decline in the dividend stream. Since the dividends are deflated, a zero rate of change would suggest that stocks have provided a constant positive rate of return in real dollars. Even where the rate of change is negative, the real-dollar dividend return on stocks can be considered positive if the yield exceeds that rate of change. This has almost invariably been the case. There is, therefore, on the record, some justification for anticipating a positive rate of return after infla- tion from long-term common stock portfolios. Such may be the justification for the relatively better action of stocks in recent years. Dow-Jones Industrials (12 00 PM) S & P Composite (12 00 PM) Cumulative Index (3/6/80) 826.62 108.05 767.84 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL AWTsla No llolement or el'pf(!slon of opinion or any other matter hereIn contained ', or IS to be deemed to be, directly or ind,rectly, on offer or the soliCItatIon of on offer to buy or ony security referred to or mentIoned The molter IS pre!oented merely for the of the subSCriber WhIle we belIeve the sources of our Informa- tIon to be relIable, we In no way represent or guarantee the ocnrrocy thereof nor of the statements mude herein Any actIon to be token by the subscrIber should be bosed on hIS own investIgatIon and InformatIon Janney Montgomery Scott, Inc, 05 a corporatIon, and Its offIcers or employees, may now have, or may loter take, posItIons or trades In respect to any seCUfltles ment.oned In thIS or any future Issue, and such posItIon moy be different from any vIews now or hereafter expressed In thIS or any other Inue Janney Montgomery Scali, Inc, whICh IS regIstered w.th the SEC as on Investment adVIsor, may gIve to Its Investment adVIsory and other customers Independently of any statements mode ,n thLs or In any other Issue Further informatIon on any security mentioned hereIn IS ova liable on request