TABELL'S MARKET LETTER 600 ALEXANDER ROAD, eN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION DF SECURITIES DEALERS, INC 609) 987-2300 November 4, 1988 We gLto tal5.e 8 week. gif ….itL,Jhis -LissJ.le ..irom…being.-rstq uired dO-,—CQQlmen honan – – – excrutiatingly dull stock market. This is the result of a tradition'- some 40 years old now, which calls for this letter to forecast the result of the presidential election. Although this event is a change of pace, it is not without its pressures J since everyone of our past forecasts has been correct. As we regularly point Qut, with due modesty,- this is considerably better than our record as regards the stock market. We have tried, in our most recent attempts at political forecasting, to apply the principles of technical analysis, a goal no so far-fetched as it might seem. Technical work is, after all, nothing more than historical and numerical analysis—an attempt to look at past data and draw sensible conclusions about the future. This technique can be applied to stock prices and—we think—to elections. 1988 is a particular case in point. The name of the game in Presidential elections is electoral votes, the winner being he who accumulates 270 such votes, regardless of the popular totals. This seems to be becoming more obvious to the media, which appear to be producing more state-by-state poll compilations than has been the case in the past. One recent such compilation showed ten states, having a total of 105 electoral votes, leaning toward Governor Dukakis. It turns out that these ten states are ten of the eleven which gave President Reagan his lowest percentages in 1984. Six more states with 100 electoral votes were rated, according to this source, as toss-ups. These were the remaining state in the group above (Pennsylvania), and five of the ten states which, in 1984, ranked just above that group in terms of Republican winning percentage. The polls, in other words, are revealing information that could have been gained simply by looking at 1984 results. 1984, it is necessary to recall, was a Republican landslide. This can best be illustrated by a simple statistic. Were Vice President Bush to win only those states in which the Republicans, four years ago, took 60 percent or more of the vote, he would have 260 electoral 1votes-,within..-.lOf.the-number—-needed to … wi n ….-He-would….ha..ve-2.0.-states…d..S…,.of..which ……went-for –I Reagan in 1984, and five of which now show him leading in the polls, to pick up those ten votes. Bush could, in other words, withstand a close-to-10 shift in favor of the Democrats from the 1984 voting pattern and still come away the winner. A forecast, then, hinges on the likelihood of a shift of this magnitude, a likelihood that a look at historical data suggests is not terribly great. There has, indeed, been only one case in recent history where such an election-ta-election reversal has taken place. That was the election of 1976, when Jimmy Carter was able to reverse the results of the 1972 vote in which Richard Nixon won by electoral and popular majorities comparable to Reagan's in 1984. There were, however, two easily-discernible reasons for this. One, of course. was Watergate. but probably more important was the location of President Carter's birth. Southern states, with a total of 145 electoral votes, had gone to Nixon in 1972 by margins ranging upward from 63. In 1976 all but one swung to Carter. By 1980, however, they had all (except Carter's native state of Georgia) returned to the Republican camp and, by 1984, the Reagan winning margins had returned to levels only slightly lower than those of 1972. Governor Dukakis' Massachusetts background seems hardly likely to produce the temporary shift of a single voting bloc that occurred in 1976. And indeed, temporary that shift seems to have been. The most obvious fact emerging from numerical analysis of recent Presidential election data is—in contrast with the Congressional vote—the pronounced bias in favor of the Republicans. If We ignore 1976, we find that in the three other elections since 1972, the Democratic candidates accumulated a total of 79 electoral votes, or less than one-third of those required to win a single election. Of the 51 voting entities, only the District of Columbia went Democratic in all of the last four elections. This pattern may shift in 1988, and it seems quite likely that Republican majorities this year will be significantly less, across the board, than they were four-years ago…… History– – – – – suggests, however, that they are unlikely to diminish by the magnitudes which would be necessary to produce a Democratic victory. We therefore forecast the election of Vice President Bush. ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. Dow Jones Industrials (12 00) S & P 500 (1200) Cumulative Index (11/3/88) AWTebh 2166.43 278.71 3934.25 No statement or expression ot opinIOn or any other matler herein contained IS, or IS to be deemed 10 be directly or Indirectly, an offer orthe solicitatIOn of an offer to buy or sell any secUrity referred to or mentioned The matter IS presented merety lor the convenience of the subscriber While we beheve the sources of our information to be rehable, we In no way represent or guarantee the accuracy thereof nor of the statements made herein Any action to be taken by the subSCriber should be based on hiS own investigation and Information Delafield, Harvey, Tabelllnc, as a corporatIOn and ItS officers or employees, may now have, or may later take, positions or trades In respect to any seCUrities menlloned In thiS or any future Issue, and such posrhon may be different from any views now or hereafter expressed In this or any other Issue Delafield, Harvey, Tabelllnc, which IS registered With the SEC as an Investment adVisor, may give adVice to ItS Investment adVISory and other customers Independently of any statements made In thiS or In any other Issue Further mformatlon on any seCUrity mentIOned herein IS available on request

).. TABELL'S MARKET LETTER 600 ALEXANDER ROAD. CN 5209. PRINCETON. NEW JERSEY 08543-5209 MEMBER NEW YORK STOCK EXCHANGE. INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 t' …. November 11. 1988 Stock market action following the election remains just as uninteresting as was the case before. –.-We do .not. therefore …. feel L-restrained4rom-….t8king–up …Bome -8pace..o-forpost-election…. commentWe-were – – – – , happy to see Qur'forty-year perfect forecasting record remain intact, and'it was also interesting that the Bush victory turned out to have much the same shape as we had foreseen. We said last week. it seems quite likely that Republican majorities this year will be significantly less. across the board. than they were four years ago (but) they are unlikely to diminish by the magnitudes which would be necessary to produce a Democratic victory. We noted that. were Bush simply to carry the 31 states which gave Reagan 60 or more their vote in 1984. he would be within ten electoral votes of victory. He carried not just 31. but. indeed. the top thirty-seven 1984 Reagan states—number 37 being California. Those 37 gave him 367 electoral votes. 97 more than required. In addition. he gained another 59 electoral votes from Illinois. Pennsylvania. and Maryland. We noted last week that is is amusing to attempt to apply the principles of technical analysis to election data. One of the tasks of the technician is the early identification of a change in trend. As far as Mr. Bush is concerned. the only significant fact is that he is safely in the White House. To the analyst. it is important to note that the Republican share of the popular vote 'dropped by 5.29 percentage points. That share. moreover. dropped in every state. the only exception being the District of Columbia where the Republican percentage so small as to be insignificant. The figures in the table below show the drop in percentage points in the Republican majority from 1984 figures to the almost-complete 1988 ones. We are listing them in full because we think they highlight some interesting facets of current voting patterns. DC 0,65 TENN – O. 10 GA -0.28 HISS -I. IS HD -I. 53 ALA -I. 57 –IND-22 SC -2.18 VA -2.43 PA -2.50 DEL -2.89 NJ -3.39 HUN – 3.54 ARK NC OH FLA KY ILL ME MASS NH HICH NY LA ARIZ -3.86 -3.97 -3.99 – 4.46 – 4.48 -5.16 -5727 -5.34 -5.64 – 5.81 -6 06 -6.23 -6.27 WIS CAL NEV ALAS VT TEX iVA RI UT NM MON HO WASH -6,42 -6.49 -6.49 -6.80 -7.16 -7.40 – J–0-5 -7.79 -7.81 -7.90 -8.14 -8. 16 -8.23 CONN ORE IA NO IDA WYO sti KAN COL HA NEB onA -8.45 -8.74 -8.87 – 9. 13 -9.97 -10.01 -1'0'-11'9 -10.31 -10.40 -10.42 -10.55 -10.73 The first such factor. we think. is the preponderance of southern states at the top of the list. In nine of the eleven states of the Old South. the drop in the Republican majority was less than the nationwide average and. in most cases. it was hardly noticeable. The Solid South first gained that appellation for its Democratic reliability. It is now just as solid a Republican territory. The table shows large GOP losses in the west. but these can. first of all. be ascribed to the departing President's being a Californian and to the fact that Republican majorities west of the Mississippi were stratospheric to begin with and remain healthy even today. This week's result reiterated what has been becoming more and more obvious in recent elections, the emergence of a power base. currently Republican. in the west and the south. Had President-elect Bush lost the Northeastern states that he carried (New Hampshire, Indiana, Maine, Connecticut. New Jersey, Delaware, Michigan, Ohio. Vermont. Illinois. Pennsylvania. and Maryland). he would still have won the election. This. we think. is not without significance as far as the financial community is concerned. since New York (and Chicago) lie outside the confines of this new political center. President Bush does not go to the White House with a mandate to be kind to Wall Street. The figures cited above are by no means to be read as an early attempt to forecast the 1992 election. but they are. we think. not without significance. The Reagan coattails have already disappeared, and the new President I it seems to us, will have to create his own record. Any economic—or other—disruptions that occur over the next four years will impact on 1992 Republican prospects. – —- ' – '- r –'-' – — – – . . . . . – – – – – . – – .. -…- Meanwhile. let us return to the stock market—which is telling us precious little about those four years beyond affording the vague impression, noted here since last summer, that a slow reaccumulation process is underway—the word s1t low being the operative one. The latest move to a new high a month ago produced what has come to be the expected aftermath. and the Dow has now backed off some 3-4 from that peak; A small top now exists with downside objectives between 2080 and 2000. Ability to hold in that range would maintain the pattern of ascending lows in effect since 1987 and would constitute an encouraging sign. Current patterns suggest that the August 23 low of 1989.33 probably will hold. and that the post-crash pattern should remain intact. ANTHONY W. TABELL DELAFIELD. HARVEY. TABELL INC. Dow Jones Industrials (12 00) 2092.10 S & P 500 (1200) Cumulative Index (11/10/88) AWTebh ' 270.61 3889.09 No statement or expression of opInion or any other matler herein contained IS, or IS to be deemed 10 be, directly or indirectly, an offer orthe soliCitation of an offer to buy or sell any secUrity referred to or mentioned The matter IS presented merely for the convenience of the subscriber While we believe the sources of our Informallon to be reliable, we In no way represent or guarantee the accuracy thereof nor olthe statements made herein Any action to be taken by the subscriber should be based on hiS own Investigation and Information Delafield, Harvey, Tabelllnc, as a corporal1on and ItS officers or employees, may now have, or may later take, positions or trades In respect to any securities mentioned In thiS or any future ISsue, and such posillon may be different from any views now or hereafter expressed In thiS or any other Issue Delafield, Harvey, Tabelllnc, which IS registered wtlh the SEC as an Investment adVisor, may give advice to fls Investment adVISOry and other customers Independently of any statements made In thiS or In any other Issue Further mformatlon on any secUrity mentioned herein IS available on request

\ ,. TABELL'S MARKET LETTER 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (6091987-2300 November 18. 1988 There have been, in this letter since last summer. a couple of recurring themes which regular readers will, no doubt. recognize. One such theme has been.poor market breadth. We havointed out – Ulat-ou-oreadth—index(iIong wilfi…inostoihers)-a high InMarch-aiid–hasin'ce thaftime-. .. -'—- refused to confirm a whole series of new peaks in the Dow. The other theme has inVOlved discussion of the possibility that market action since last year's crash. given the extent of the technical damage incurred, might be part of a protracted rebasing period which will eventually occupy an entire market cycle. There are few precedents for this sort of thing. but one is the period between October. 1946 and June, 1949, a 33-month cycle, consisting of a narrow trading range in most market averages. During those months, however. the groundwork for the bull market which began in 1949 was laid. OJIA t BEAOTH JUNE 194G – JUNE 1949 1987 – NOV 1988 The charts above show the action of the Dow Jones Industrial Average and our daily breadth index in 1946 – 1949 and from the 1987 high to date. To make them comparable, the horizontal scales are identical. and the Dow is shown on a log scale in both cases. The construction of our breadth index makes it, 8S well. comparable across time. There exist notable similarities between the earlier epoch and 1987 – 1988 so far. Both began with a precipitous market break compressed into a short space of time. In both cases, this break was followed by a lateral trading range in the averages. and. in both cases. that trading range featured poor breadth action. There are, of course. also differences. The 1987 crash was deeper than the one in 1946. but, conversely, subsequent action has been slightly better for both the average and breadth in the present instance. Despite those differences. the two periods are close enough to warrant further comparison. After a 23 fall. the DJIA reached a low of 163.12 on October 9. 1946. Breadth also reached a low on that day. unlike the current instance, where the test of the October low last December produced a new bottom for breadth. However, in both instances, following the breadth low. the market embarked on a vigorous advance in which breadth confirmed each new high. The respective rallies ended on February 7. 1947 and March 18. 1988. Subsequent action in 1947 saw the Dow close at 163.21 on May 17, nothing more than a test of its previous low. while. as the chart shows. breadth plunged to a level well below its bear market nadir. Subsequent tests—at 165.39 in March, 1948 and at 161.60 in June. MI949;-also, saw …-breadth decline to new low levels. Conversely. new Dow highs, in July. 1947 and June. 1948, remained unconfirmed by advance-decline action. Breadth today has been posting a series of lower lows since March, and. although it has not yet moved below its 1987 bottom, it is not far from doing so. It is worth noting that American Stock Exchange breadth moved below its December. 1987 low some three weeks ago. and has been trending lower ever since. The extent to which 1946 – 1949 parallels continue to manifest themselves will. of course, depend in part on the economic background. Forty years ago, that background involved steadily rising earnings coupled with an atmosphere of growing pessimism. A comparable scenario. it seems to us, is at least possible over the next year or so. The sobering fact about the 1946 – 1949 rebasing period is its length—two years. nine months. Duplication of that pattern today would call for a market much like that of 1988 to continue through all of next year and on until July. 1990. ANTHONY W. TABELL DELAFIELD, HARVEY. TABELL INC. Dow Jones Industrials 02 00) s P 500 (1200) 2053.34 265.06 Cumulative Index (1117188) 3764.93 AWTebh No statement Or expression of opInion or any other matler herein contained IS, or IS to be deemed to be, directly or Indirectly, an offer orthe soliCitation of an oHerto buy or sell any security referred to or menllOned The maner IS presented merely for the convenience 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 01 the statements made herem Any action to be taken by the subscriber should be based on hiS own Investigation and Information Delafield, Harvey, Tabetl Inc, as a corporation and s oHlcers or employees, may now have, or may later take, poslons or trades In respect to any securities mentioned m thiS or any future Issue, and such position may be different from any views now or hereafter expressed In thiS or any olher Issue Delafield, Harvey, Tabelllnc, which IS registered With Ihe SEC asan Investment adVisor, may give adVice to Its Investment adVisory and other customers Independently of any statements made In thIS or In any other Issue Further Informabon on any security mentioned herein IS available on request

. . \- TABELL'S MARKET LETTER 600 ALEXANDER ROAD. CN 5209, PRINCETON. NEW JERSEY 08543-5209 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS. INC (609) 9872300 November 25, 1988 The anCIent Chinese wish, liv.!.J.!..)nteresting-1!mehas en vari(msJyc1JpeJI …i!sJ!.. is' -'- – – -cut'se-anda-'-bles-slng. In –ariy case. Insofar as the stock market in 1988 IS concerned. the teImmology is irrelevant. In terms of price action, the year has been one of the least interesting in recent memory. For the DJIA, the high, scored last month, has, so far, been 2183.50. The low, posted back m January, was 187q .14, making the year's range to date 16.2 from low to high. If these boundaries hold for the remaining fIve weeks of 1988. the year wlll rank 80th in terms of distance between high and low Qut of the 92 years SInce the Dow was first computed. Since late February. the trading area's confines have been even narrower, its lower lImit becoming the May low of 1941.48. This translates to a low high difference of 12.5. Only one year (1909) since 1897 has produced a narrower trading range. From a financial point of view. though. however uninteresting stock-market action may have been, the times in general, we think. are intereshng—perhaps as interesting as any in recent memory. We are just thirteen months past an–event many of us thought we would never, in our hfetimes. witness—a market crash comparable to that of 1929. Once the shock of this event wore off, forecasts that its aftermath might be as unpleasant as that of its precursor began to emerge. They are still being heard today, and it is possible. of course, that may turn out to be true. Yet the aftermath of the 1987 break has been not the plunge to new lows of late 1930, but the almost stupefymg dullness alluded to above. Most of us, although few now are old enough to remember it, have a general Impression of 1929 and its aftermath. The pre-crash stock market, we are told, was an era of speculative frenzy. Bernard Baruch described it as crowd behavior. quotmg Schiller. Anyone taken as an indiVIdual is tolerably sensible and reasonable—as a member of a crowd, he at once becomes a blockhead. 1I Likewise, runs the popular belief, there existed a total fallure to recognize the seriousness of the situation. The entire financial community. in other words, found itself deluded. John Kenneth Galbraith, who coined the phrase, conventional wisdom, described this failure as what causes men who know that things are going quite wrong to say that things are fundamentally sound. 1—-As . oneooks…oockon–thehistor-Y4Jfte -pa&t-thlr-teen-men th si-it is-possible–toquestlOn-whether–I' the sort of conditions Baruch and Galbraith were talking about applied during 1987 and. perhaps more importantly. whether they apply today. Even if they do apply, the differences. it seems to us. are notable. We have always, in discussing the history of the Great Depression. emphasized our belief that it should be divided Into two parts—the crash itself, which was essentially a market-related phenomenon. and the long, dreary aftermath of 1930 – 1932, where the truly tragic damage was done. In those discussions. we allowed for the possible repetition of the first part—the 1929 crash. ThlS indeed took place a bIt over a year ago. We have always felt that a similar after'math however was not necessarily called for. We, therefore. remain unsurprised that it has not yet occurred. That an atmosphere of speculation, in some ways like that of 1929, eXIsted in early 1987. and indeed still exists in at least one area today. seems to us obvious on the face of it. Certainly, the takeover frenzy. which has actually reached new heights in the post-crash period, appears to be a classic example of man's periodic rediscovery of leverage as a mear13 of achieving instant riches. And indeed those riches have, in fact. been achieved. The accretion of profIts in takeovers, LBO's, etc. for all the participants involved has been astronomical and widely advertised. As far as this phenomenon is concerned. we are certainly willing to apply Baruch's further recommendation that. in the midst of this sort of behavior, it is necessary to keep repeating to oneself that two and two make four. We find ourselves, in short. as skeptical as the next person as regards the viability of the takeover boom. Yet. if the Baruch dictum were true, we should find ourselves. in this Skepticism, a lone voice crYIng in the wilderness. Instead, we find ourselves drowned out in the collective shouting. It is dIffICUlt to pick up a financial page these days without running across an article or column in which some learned savant roundly condemns the takeover mama. Indeed, even USA Today. this week, accused Wall Street of pigging out on takeovers. Warning signals. by the time they have reached that pUblication. can ha!.!ly.be saie! !.ohave gone unheard …. . -,.– .. . ……… …………. ,… . -.. There is, moreover, an obvious and significant difference between the partlCIpants In the takeover frenzy today and the margin buyers of 1929. It is. by and large, instItutIOns who are buying today's .Junior Subordinated Deferred-Interest 18 1/4's and acquirmg companies who are issuing them. We have already witnessed changes in overall market behavior as equity ownership has come to be dominated by institutions rather than indIviduals, and it is likely that the unwinding of the merger manIa will be dIfferent from the previous era's margin lIquidation. ThRt there may emerge some unpleasantness, if this whole structure ever begins to come apart. goes without saying. Whether it will take a form similar to the stock price debacle which occurred 60 years ago remains an open question. Dow Jones Industrials (1200) S & P 000 (1200) Cumulative Index (11/23/88) AWTebh 2073.43 267.22 3804.33 ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL INC. No statement or expression of Opinion or any other matter herein contained IS, or IS to be deemed to be. directly or Indirectly. an offer or the soliCitation of an offer to buy or sell any secuflty referred to or mentioned The matter IS presented merely for the convenience 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 01 the statements made herein Any action to be taken by the subscflber should be based on hiS own investigation and Information Delalleld, Harvey. Tabe!! Inc. as a corporation and Its officers or employees, may now have, or may laler take, positions or trades In respect to any secuflbes mentioned In thiS or any future Issue. and such position may be different from any views now or hereafter expressed In thiS or any other Issue Delafield, Harvey, Tabe!! Inc, which IS registered With the SEC as an Investment adVisor, may gIVe adVice to ItS Investment adVISOry and other customers Independently of any statements made In thiS or In any other Issue Further Information on any secunty mentioned herein IS available on request