Tabell’s Market Letter – April 12, 1990

. TABELL'S MARKET LETTER 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS;' INC (609) 987-2300 April 12, 1990 – ,—–We. expendedsome, computertime,-thisweek .studyi1g7-1/2yearsof,price .ac.!ion..for.,..the50Q,,,,,,,…… current S & P component stocks. We calculated the individual percentage changes for each of these components for each of the 90 months since October, 1982. What we had expected to find was a sharply increasing standard deviation of individual stock returns about their mean a Standard deviation is a technical statistical term for what is essentially a Simple concept—the extent to whiCh individual components of a group vary around their average vaIuea We had noted the number of companies (banks are a recent example) which were turning in performances quite different from that of the S & P 500. We, therefore, expected to find the variation between individual returns to have increased sharply. ——– — —– —— — ——— —-Dati! St.P500 SIP Unw Roho 1 Chs Sf.. Dev Adv DC'c Brdt.h ——- — OCT 1982 133.71 137.0! 102.5 NOV 1982 138.54 144.64 11)4.4 DEC 1982 140.M 145.55 103.5 ' 13.79 10.56 20 10395 5.56 '1.41 319 113 10601 0.62 9.79 2U 193 10655 JAN 1983 lS.JO 149.95 103.2 3.03 '1. JJ 216 161 10770 fEB 1983 14B,06 155.55 105.1 3.73 8.B9 J06 124 1095.2 liAR 1983 152.96 161.4 105.5 J.79 8.JO 295 111 11106 APR 198J 164.42 172.15 104.7 KAY 1983 162.39 17.71 107.6 JUN 1983168.11 161).71 11)7.5 '6.64 8.28 82 11J90 1.48 8.23 26 204 11432 3.43 8.90 28 157 11559 JUL 1993 162.56 114.64 107.4 -3.36 7.65 118 300 11407 AUG 1983 164.0 tn.67 105.0 -1.13 8.03 193 257 11343 SEP 1981 166.07 176.1! 106.1 2.00 7.'16 302 154 11491 OCT 1963 163.55 171.03 10 .6 -2.89 8.62 164 287 11 68 NOV 1983 166.-40 178.06 107.0 4.11 7.19 3\8 131 11555 DEC 1983 16.93 175.6 106.5 -1. 36 6.67 190 26 1181 JAN t98 163.41 170.72 10-1.5 -2.80 8.12 152 307 11326 rEB 1984 157.06 160.32 102.1 -6.0910.13 85 381 11030 AR 198 159.\8 162.89 102.3 1.60 7.20 261 200 11091 APR 1984 160.05 161.74 101.1 -0.71 7. 6 228 233 1 HI86 I1AY 198 150.55 \51.22 JUH 1'i'8-i (53.18 155.!7 JUl 1984 150.66 151.6l AUG 1984 166.69 169.09 100. 1(O0L0..6 101.4 -6.50 7.69 15 390 10771 .,.Z.68 7.82 30B 155 10924 -2.3S 8.28 198 261 10861 11.52 7.79 17 11300 SEP 198 166.10 167.80 lOt. 0 -0.76 6.79 2JO 2S 11295 '—-l-,.-.,NOCoTv 1984 1984 166.09 163.58 168.84 167.15 C…..198-Ll67 24…1.l 77 JAN 1985 179.63 188.17 101. 7 102.2 1IO0-' .8 0.62 -1.00 – 9.5 7.02 27' ISS 117!.86 6.39 201 262 11325 7.a6–m-24'!l1u1! rEB 1985 181.18 189.63 104.7 0.77 6.48 '62 206 11982 KAR 1985 180.66 18'.54 103.8 -1.10 8. J3 199 274 11906 APR 1985 179.83 185.63 103.2 -1.02 6.56 201 !67 llR40 IIAY 1985 189.55 196.97 103.9 6.11 7.1t .00 72 12168 JUN 1985 191.85 199.90 104.2 JUL 1985 190.92 199.87 104.7 1.49 -0.02 6.13 7 ..\5 2eR 180 12.176 UZ 45 12253 AUG 1985 188.63 196.54 104. '2 -1. 67 7.32 189 2S1 12161 SEP 1985 lS!.08 186.53 102. -5.09 7.03 IIJ Oll He!7 OCT 1985 189.82 193.96 102.! 3.99 7.65 M7 120 1205 NOV 1985 202.17 21)8.39 103.1 DEC 1985211.28217.22 102.8 '.44 .24 6.H 6.28 W 1 12447 370 103 171 JAN 1986 211.78 220.98 10. 3 FEB 1986 226.92 238.52 105.1 1.3 7.93 7.S'l 7.95 m2!3'i' V!5 63 12818 13173 HAR 1986 238.90' 251 .fC 105.2 5.40 7.Hh J6 115 IJ..25 APR 1986 235.52 247.45 105.1 -1.57 8 .O 191 290 13326 IIAY 1986 247.35 260.66 105.4 5.34 7.25 37J 106 13593 JUN 1986 250,8 260.B9 104.0 0.09 8.59 232 !8 13577 —— — —- —-Dat.e SIPSOO SP Unw Rat.to —– – – ChJ St..Dey .—– -A-dv -D-D- Brdt.b – -\6aJUl 1986 236.12 239.80 101.6 -8.08 12.22 AUG 1986 252.93 256.35 101.4 6.90 7.88 M B SEP 1986 231.32 235.15 101.7 -8.27 7.79 8 428 13199 OCT 1986 243.98 249.86 102, .. 6.25 S,H 400 84 13515 NOV 1986 29,22 253.46 101. 7 1.44 . 6. J7 307 165 13657 DEC 1986 2-42.17 2-4J.37 100.5 -J.98 7.11 101 J78 IJJ80 JAM 1987 27-4.08 276.52 100.9 13.62 8.58 . 19 13831 FEB 1987 28,20 291.55 102.6 5.44 7.BO J58 12 141)65 liAR 1987 291.70 291.82 101.1 1.12 7.77 261 221 14105 APR 1987 288.36 289.2J JOO.3 -j. 9C 8.3 163 J2C 1J948 /lAY 1987 290.10 2';'0016 100.0 C.l3 7.J! 227 255 139!0 JUN 1987 304.00 31)2.51 9';'.5 JUL 1987 J18.66 JI7.76 ';'9.7 '4.26 6.81 97 14211 5.04 10.N6 36J 108 14466 AUG 1987 329.80 326.56 99.0 2.77 6.96 3!0 ISS 1631 SEP 1987 321.83 318.45 98.9 -2. 8 11.b6 161 32 14468 OCT 1987 251.79 235.84 93.7 -25.9.01 14.22 489 13983 NOV 19117 230.30 219.20 95.2 -7.06 9 .8 RS 400 1366B DEC 1987 2U.08 238.46 96.5 8.79 9.9 OS 8 139B9 JAM 1988 257.07 28.35 96.6 .15 10.08 338 151 IH76 rEB 1988 267.82 263.30 98.3 6.02 8.42 38S 101 IH60 HAR 1988 258.89 257.87 99.6 -2.06 8.12 16 31l 1431l APR 1988 261.33 259.37 99.3 0.58 6.53 24 233 14324 I1AY 1988 262.16 258.4-1 98.6 -0.36 6.00 218 257 1285 JUN 1988 273.50 273.41 100.0 5.79 7.82 J99 84 1600 JUL 1988 272.02 268.63 98.8 -1.75 a. JI 188 290 14498 AUG 1988 261.52 258.36 98.8 -3.82 6.50 112 375 IL35 sEP 1988 211 .ll…2.A7-'6S.-'i8'-4–s…s9..-b…..1J..-.36LlL…..B!l8a OCT 1988-278.'17 268.52 96.3– o.n- 8.2 276-190-14568– NOV 193B 273.70 260.2 95.1 .J .08 6. ,8 106 375 t299 DEC 1988 277.72 26.83 95.4 JAN 1989 297.47 280.i7 9. J 1.76 13.47 5.94 8.'16 '.11 165 56 141,45 14817 FEB 1989 288.86 275.31 95.3 -1.88 5.16 138 J117 14608 AR 1989 29-1.87 279.65 9. 8 1.58 6.92 292 191 14709 APR 1989 309.64 292.36 MY 1989 320.52 304.34 JUN 1989 317.98 OO.30 JUL 1989 346.08 323./3 94.4 95.0 94.4 93.S .'… 54 4.tO -1.3 7.80 5.66 6.l8 6.68 , .00 77 15040 'b9 92 15317 185 283 15219 39 15629 AUG 1989 351.,,5 330.82 94.t 2.19 7.01 299 185 15H3 5EP 1989 319.15 322.92 92.5 -2.39 9.11 166 320 15589 OCT 1989 30.36 305.76 89.8 -5.31 9. 7 131 355 15365 NOIJ 1989 345.99 307.34 88.8 0.52 '.24 2M4 193 15456 DEC 1989 353.40 309.94 87.7 0.85 7.34 282 206 ISJ2 JAN 19'10 J29.08 285.72 06.8 -7.82 9.0 JI 441 ISI2 rEB 1990 331.89 287.22 86.5 0.53 8.2 265 214 1193 MAR 1990 339.94 295.20 86.8 2.78 7. ')6 JJ' 153 15373 The results are shown in the table above. As the standard deviation column shows, there has been some increase, starting around last September, in the variance of the individual components a It has, however, been relatively small. What is perhaps most interesting in the table, though, is the result of a number of other calculations we were able to make, given the data at hand It was possible, for example, to construct an un weighted average of the 500 S & p components and to compare that to the S & P itself, an exercise performed in the first three columns of the table. The ratio of this average to the S & p clearly shows the relative underperformance of the unweighted index, something which has been gOlng on, roughly. since the summer of 1983. The oft-lemarked narlowness of leadership in the current market is indeed a long-term phenomenon and applies not only to the S & P 500 vs. the market, but to the S & pIS largest components vis-a-vis its smaller ones. We also were able, in our study. to calculate the number of advancing and declining stocks for each month and. from these, to calculate a breadth index for the S & P 500 components . A couple of interesting factors emerged from this-study, one being that January 1990 was a weaker month than many realized and. with 51 stocks advancing. was, in fact, the worst month in breadth terms except for October 1987 Unsurprising, but worthy of note, is the fact that this breadth index topped out back in August at the same time that conventional breadth indices did so. As we stated above, the phenomenon of narrow leadership has been widely recognized. but we do not think the fact that it is well-known changes its implications a We intend to remain cautious about the market's prospects until such time as some sort of improved breadth is able to 8ssert itself. ANTHONY W. TAB ELL DELAFIELD, HARVEY, TAB ELL INC. Dow Jones Industrials 2751- 80 S & P 500 344.18 Cumulative Index (4/11/90) 4843.50 No statement or expressIon of opInion or any other matter hereIn contaIned IS. or IS to be deemed to be. directly or indirectly. an ofter or Ihe solicrlatlon of an offerto buy or sell any secUrity referred to or mentioned The matter IS presented merely lor the COfwemence 01 the subSCriber While we believe the sources of our mformatlon \0 be reliable, we In no way represent or guarantee the accuracy thereof nor olthe statements made herem Any aCllon to be taken by the subscriber should be based on hiS own Investigation and Informallon Delafield. Harvey. Tabellinc. as a corporation 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 pOl1lon may be dlflerent from any views now or hereafter expressed In th1S or any other Issue DelafIeld. Harvey. 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