Tabell’s Market Letter – February 03, 1984
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I ! TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 9249660 February 3, 1984 Having already, last week, broken the December 15, 1983 low of 1236.79, the Dow-Jones Industrial eI'agontjl1\1.ed.io…l)'0I'k. lower this week, closing on Thursday at 1213.87. – . . . – lenow becomes appiirerft tli.rt 'hie-'usnaf yearen(f rally 'bas7uhitscOurse'i.lbeit r\ot' a .Iong o n e – – recording a high on January 6, of 1286.64, While registering a gain of only 4.03. Since this recent' high a 5. 78 correction has been recorded to date. As readers of this leiter have been made aware, the inability of the market to rally from the December low by 10 or continue the rally into February / March has had long-term bearish, historical implications. As has been previously noted, in years when the December low has been broken, the subsequent trend has been downward two-thirds of the time. This action, however, for the first month of 1984, should not necessarily be cause for concern if viewed from whence we came, that is, August 12, 1982. Since that time the DJIA has gone from a low of 776.92 to a high of 1287.20 on November 29, 1983 or an increase of 65.68 in a period of 375 trading days. While the bull market can certainly be described as mature both in extent and duration, it does not, by hist6rical precedence, need to be over. In this current market environment what new areas of leadership might evolve The illustration on the reverse page shows the performance of the best and worst acting Standard & Poor's groups for the first four weeks in each of the last four years. The year-to-date results of these best and worst per- forming groups are also shown. An initial inspection enables us to draw some obvious observations. On an absolute basis invest- ing from the end of January to year-end in the ten best acting groups when the market has been up for the year (1980, 1982, and 1983) has indeed produced some remarkable results. However, in order to properly measure the performance of these best and worst acting S & P 1 l\jClH,1 loA ';'; groups it is, of course, necessary to measure the '' … p .00 uIN/LU3J GAl NhuSS groups' action to the stock market as a whole. 1();'7S Using the S & P 500 Index as a proxy for te same JA.N 3 11)) 11.5 … 4 5. Zj I time intervals reviewed, we find, on a relative … ., ;, J 1.;5.7. —-basis,tnvg4nteps-in-three-O.lf—-J.,-'C;6i'3O.j4;–3''1 the four years reviewed would have relatively out- c C 20 1;1' 122. 30 -l; n5 performed the S & P 500 Index, 1983 underperform- J j.\ .. 1 1'1,J i. .L 1 5. -, ' ing by the smallest of margins. The same positive .1. , 1,.; ''4!..'t relative performance was found in the ten worst JA' ….t J.Jtj i4i.4 0.2, groups in three of the four years. The major l C ., J , 0 , .; .. 7.003 exception, however,-being 1980 where the ten JJ,. oJ … JJ '64.;4 -0.30 worst groups underperformed the S & P 500 by a factor of five. Therefore. a strategy could have been developed by purchasing the ten best groups after the first month of each year, or by purchasing both the ten best and the ten worst groups for the same period in each of the last four years. This would have resulted in a relatively positive per- formance versus the S & P 500. X CHANGES FROM EC 2. 1983 NAHE PRICE OIU INTEGRATED DOMESTIC 3040.70 HOSPITAL MANAGEMENT COMPANIES 5'1.92 OIL COMPOSITE 285.80 SAVINGS , LOAN COMPANIES 35.33 NATURAL GAS PIPELINES !35.51 COAL BITUHINOUS 316.40 TELEPHONE (NEW) 99.46 DIU CRUDE PRODUCERS 732.00 FERTILIZERS 18.84 BAHI\S(NEW VOR' CITY) 65.41 10 llEST GROUF AVnAGE TO J(jN !S 1981 PF,ICE F.NI\ ; CHANGE 386.40 1 13.4136 60.39 2 9.9599 311.50 38.34 253.62 J 8.9923 8.5197 5 7.6897 339.50 6 7.3009 106. 16 780.60 20.06 7 6.7364 6.6393 9 6.4756 69.63 10 6.4516 8.21790 CONTAINER PAPER 444.50 415.30 .S -6.5692 COPPER 56.07 2.37 .6 -6.5989 COMMUNICATION EOUIP/HFF.S 39.72 36.92 .7 -7.09 .e RETAIL STORES COHOSITE 159.16 147.60 ——7.2631 BROII.ERAGE FIRMS 52.S! 48.57 .9 -7.5209 GENERAL HEKCHANOISE CHAINS 13.74 12.61 90 -8.2242 RETAIL STORES DEPARTMENT 342.50 314.30 91 -8.2336 TRUCHRS 19.25 174.63 92 -100100' TEXTILE APPAREl HFRS. 78.28 67.80 9J -13.3878 POLLUTION CONTROL 64.87 54.69 9. -15.6929 10 WOfoST GKOUP AVERf'lIOE -9.0604 If we were going to incorporate this same strategy for 1984 we can now identify above the ten best and worst groups for the first four weeks in January. It is interesting to note the concentration of the energy sector in the ten best groups and the representation of the retail/consumer area in the ten worst groups. It is very possible these ten best and worst groups could relatively outperform the market in 1984. RJS rs Dow-Jones Industrials (12 00 p. m.) S & P Composite (1200 p.m.) Cumulative Index (2/2/84) 1214.30 163.93 2015.76 ROBERT J. SIMPKINS. JR. DELAFIELD, HARVEY, TABELL INC. No statement or e)rpresslon 01 opinion or any other matter herem contained IS or IS to be deemoo to be directly Of mdlrectiy, an offer or the solicltatlo'l of an offer to buyor sell any secunty referred to or mentIOned The matter IS presented merely for the conveOlence of the subscflber While we believe the sources of our mformatron to be reliable, we In noway represent or guar8ntee the accuracy thereof nor ot the statements made herem Any aCllon to be taken by the subscnber should be based on hiS own investigation and Information Delafield, Harvey, Tabell Inc, as a corporatIOn and liS officerS Or employees, may now have or may later take, poSitions or trades m respect to any secunhes mentioned In thiS or any future Issue and such pOSition may be dIfferent from any views now Of heleaftor eApressed In this Of any other Issue Delafreld, Harvey Tabell Inc, which IS registered With the SEC as an Investment adVisor, maygwe advice to Its Inveslment adVISOry and othol customers Independently of any statements made In thiS or In anyolher Issue Further mfOlmallon on any security menhoroed herein Is available on requesl .0— —–;– -. Z CHANGES FROM DEC 26 1979 NAME COPPER BRO!l.ERAGE FIRMS AEROSPACE METALS MISCELLANEOUS ALUMINUM GOLD MACHINE TOOLS OIU INTEGRATED DOMESTIC STEEL MULTI-LINE INSURANCE SOFT DRIN!l.S TOBACCO COSMETICS TEXTILE APPAREL MFRS. RETAIL STORES COMPOSITE GAMING COMPANIES GENERAL MERCHANDISE CHAINS PERSONAL LOANS AGRICULTURAL MACHINERY SAVINGS & LOAN COMPANIES PRICE 39.80 11 .42 138.t 5 76.17 120.43 172.30 106.00 264.60 39.40 17.86 TO JAN 23 1980 PRICE RANK 51.45 1 14.53 2 171.90 3 91.50 4 143.01 S 201.80 6 123.96 298.90 44.10 ,7 a 19.95 10 10 BEST GROUP AVERAGE CHANGE 29.2714 27.2329 24.43.00 20.1260 18.7495 1701213 16.9434 12.9630 11.9289 11.7021 TO DEC 31 PRICE 47.00 25.10 210.60 106.84 150.48 321.40 164.27 445.20 49.41 20.35 1980 CHANGE 18.0905 119.7900 52.4430 40.2652 24.9523 86.5351 54.9717 68.2540 25.4061 13.9418 19.04690 SO.46490 94.98 84.83 54.64 44.09 73.83 17.6-4 6.84 B6.73 78.64 28.49 92.58 82.66 53.05 42.64 70.93 16.68 6.34 79.45 71.71 2S.SS 10 WORST GROUP AVERAGE as -2.5269 96.73 1.8425 a6 -2.5581 107.95 27. 2545 a7 -2.9100 55.92 2.3426 .,aa -3.2887 49.52 12.3157 a9 -3.9279 68.72 -6.9213 90 -5.4422 12.83 -27.2676 -7.3099 5.65 -17.3977 .2 -9.3939 73.74 -14.9775 '3 -8.8123 -10.3194 79.20 0.7121 24.97 -12.3S52 -5;S4892 -3.44518 ; CHANGES FROM DEC 31 1980 ,NAME AIR TRANSPORT BEVERAGES BREWERS RESTAURANTS TRUCKERS TEXTILE APPAREL MFRS. CANADIAN OIL & GAS SHOES CHEMICALS AUTO PARTS-AFTER MARKET INVESTMENT COS.ROND FUNDS) AGRICULTURAL MACHINERY 9ROKERAGE FIRMS METALS MISCELLANEOUS OFFSHORE IRILLING SAVINGS & LOAN COMPANIES HOTEL/MOTEL AEf\OSPI\CE GOlli GAMING COMPANIES INVESTMEH COMPANIES — ….. – CHANGES FROM DEC 30 1981 NAME EXCLUDING GEN. MOTORS COMPUTER' BUS. EOUIP. LEISURE TIME ENTERTAINMENT SOAPS ELECTRONIC MAJOR COS. INVESTMENT COS.(BOND FUNDS) ELECTRONICS-INSTRUMENTATION GENERAL MERCHANDISE CHAINS ELECTRIC COMPANIES PRICE 40.97 38.74 33.23 83.88 49.52 22.48 60.31 61.55 14.81 7.26 TO JAN 28 1981 PRICE RANK 45.91 42.53 2 35.94 88.97 52.36 3 S 23.71 6 63.51 64.71 15.36 7 9 7.48 10 10 BEST GROUP AVERAGE X CHANGE 12.0576 9.7832 8olSS3 6.0682 5.7351 5.4715 5.3059 5.1340 3.7137 3.0303 TO DEC 30 1981 PRICE Z CHANGE 38.30 -6.5170 47.62 22.9220 41.83 25.8802 100.13 19.3729 41.16 -16.8821 21.73 -3.3363 65.48 8.5724 56012 -8.8221 15.47 4.4565 6.97 -3.995 6.44548 4.16521 79.20 25.10 106.84 215.35 24.97 74.07 210.60 321.40 12.83 72.34 70.75 22.18 94.14 189.68 21.94 64.49 181.50 274.50 10.87 60.87 10 WORST GROUP AVERAGE .s -10.6692 .6 -11.6335 a7 -11. 8869 aa -11.9201 .,a9 -12.1346 90 -12.9472 -13.8177 .2 -14.5924 .3 -15.2767 -15.8557 -13.07340 49.20 30.59 109.47 201.35 18.83 70.06 134.49 235.90 11.99 60.90 -37.8788 21.8725 2.4616 -6.5011 -24.5895 -5.4138 -36.1396 .-26.6024 -6.5472 -15.8142 -13.51520 PRICE 9.78 97.30 76.19 290.80 156.79 92.02 6.97 43.12 5.74 29.41 TO JAN 27 1982 PRICE RANK 10.73 1 102.50 2 79.21 300.30 161.24 94.35 7.08 43.59 5.80 3 5 7 ,a 29.67 10 10 BEST GROUP AVERAGE X CHANGE 9.7137 5.3'1-43 3.9638 3.3356 2.8382 2.5321 1.5782 1.0900 1.0453 0.8841 TO DEC 29 1982 PRICE X CHANGE 26.49 170.8590 146.10 50.1542 76.29 0.1313 281.60 -3.1637 223.69 42.6685 151.56 64.7033 8.47 21.5208 70.66 63.8683 10.47 82.4042 36.21 23.1214 3.23252 51.62670 FOREST PRODUCTS COAL BITUMINOUS RAILROAD EQUIPMENT INVESTMENT COMPANIES OIL INTEGRATED DOMESTIC TRUCKERS GOLD SAVINGS , LOAN COMPANIES OFFSHORE DRILLING CANADIAN OIL , GAS 19.76 395.20 78.08 60.90 341. 30 100.13 235.90 18.83 201.35 21.73 17.14 340.50 67.17 52.33 291. 50 85.12 195.40 15.17 162.03 17.38 10 WORST GROUP AVERAGE as -13.2591 a6 -13.8411 a7 -13.9728 .,aa -14.0723 a9 -14.5913 90 -14.9905 -1701683 .2 -19.4371 93 -19.5282 -20.0184 -16.08790 24.86 274.90 75.67 72.58 274.70 139.93 333.60 34.14 111.87 15.56 25.8097 -30.4403 -3.0866 19.1790 -19.5136 39.7483 41.4159 81.3064 -44.4400 -28.3939 8.15849 t CHANGES FROM DEC 29 1982 NAME MACHINE TOOLS GOLD ELECTRONICS (SEMICONDUCTORS/COMPON EXCLUDING I.EI.M METALS MISCELLANEOUS FERTILIZERS COPPER MACHINERY INDUSTRIAL/SPECIALTY OIL CRUDE PRODUCERS TRUCKERS —— PRICE 151.33 333.60 38.12 261.70 105.74 12.85 58.76 133.74 528.10 139.93 TO JAN 26 1983 PRICE RANK 173.50 1 375.90 2 42.18 285.50 114.81 3 S 13.93 6 63.43 7 144.05 568.60 150.10 a 10 10 BEST GROUP AVERAGE CHANGE 14.6501 12.6799 10.6506 9.0944 8.5776 8.4047 7.9476 7.7090 7.6690 7.2679 9.46507 TO DEC 2a 1983 PRICE CHANGE 205.63 35.8818 313.90 -5.9053 59.28 55.5089 300.80 14.9408 130.17 23.1038 18.84 46.6148 56.07 -4.5779 159.73 19.4332 732.00 38.6101 194.25 38.8194 26.24300 SHOES AUTOMOBILE HOSPITAL MANAGEMENT COMPANIES PUfiLISHING (NEWSPAPERS) AUTO PARTS-AFTER MARKET TIRES & RUltBER PROPERTY-CASUALITY INSURANCE HOME BUILDING PERSONAL LOANS SAVINGS I LOAN COMPANIES 106.99 78.36 62.71 57.10 22.65 222.15 170.76 48.34 95.93 34.14 98.92 72.41 57.71 52.50 20.74 201.68 154.41 42.22 82.37 !8.84 10 WORST GROUP AVERAGE as -7.5428 a6 -7.5932 a7 -7.9732 aa -8.0560 a9 -8.4327 .,'0 -9.2145 -9.5748 .2 -12.6603 .3 -1401353 94 -15.5243 -10.07070 112.12 101.42 54.92 64.72 23.79 210.41 183.17 47.77 126.41 35.33 4.7948 29.4283 -12.4223 13.3450 5.0331 -5.2847 7.2675 -1.1792 31.7732 3.4857 7.62114 – – —