TABELL'S MARKET LETTER 5 VAUGHN DRIVE, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 .– ——-.-'–.- —. .; — -4June7,-1991 The second penetration of the 3000 level by the Dow Jones Industrial Average proved a bit more successful than the first. The prior peak had involved just a single day's close. at 3004.46 on April 17. A drop of a bit under 5. to 2865.38 on May 15. ensued. but. beginning last Thursday. no fewer than five consecutive closes above the benchmark level took place. For the record. the Dow's closing high to date for whatever upward process we currently find ourselves in was attained this Monday at 3035.33. It cannot. unfortunately. be said that the Dow's feat was fully refiected by the rest of the market. Probably the most important positive note was provided by our daily and weekly breadth indices. both of which moved to post-October 1990 peaks. The daily index managed to do so by just three one-hundredths of a point. but it did. indeed. confirm the high. The weekly index. which. in recent years. has generally performed better on the upside. moved to a decisive new peak. ……A….e.r.lg.e…….. 001-1…. hdlll.II 011-11111 'lII.porll 001-1,,,, 0111111.. SIP Ildlll.II SlPInI SIP flOIIiI lSI IIdu DTC IIdllt.II IIhl LIII i IlIIiii' 5001 Olll! lrudtb Indu I 1,,,,, 1981 II, 11 lit II III II I tllI,l 1,.11 II 81,b 81,b 11,1 1981-1110 HI,I 1122.11 !1!l.tl !!I1.1\ \.9\ 3001.11 1181.11 1111.41 1211.11 -!\'\I '.11m.1l 1lI.1l II 111.09 -11.38 313.H 410.41 IIUI 331,11 m.80 311.9\ !.II 1111.11 120.11 413.11 390.11 lUI lUI !U. '!I.I' 365.11 m,Ol 31\,\8 1.\0 ml.l1.Oll 181.50 411.10 511.10 1.41 ill. 11 m.O! 111,98 150.11 -L1.31 111,81 lmlll\ll15ln2–i1llll.11 l00l.22 .. 981.141 -1.32 982.31 II llllll!, 1110 I 1111, 1990 Iml' I C!II,I I 0 ..,1 I.Cbln,l 81,1 1111-0111..1.9.1.1.1.9.0.-.D.l.Io. I,.-Oltl 303\.33 1m111..u11 111.11 m.83 ll.I' l11.21 111.1. !I1.10 3119.l0 112.10 11.49 13.1. -3.0\ 11.21 1\.91 -2,11 l.lO 11.11 1!.58 13.01 1.11 -11.\1 -'.49 l.ll \.83 -11.11 -\.95 11.1\ -11.50 \.10 -2.09 1.03 1.11 -3.90 1.11 -0.16 -8.91 -0.30 -1.31 0.08 -8.3l 0.01 The table above appeared in this space two months ago. on April 5. and We have updated it here. adding. in the process. a few columns. and recording the actual April highs Which. for all the indices shown. were posted after that letter was written. The final column. showing each average's percentage change from its April high to Its high of this week. 1S the first item of interest. The Dow's achievement of a new peak by 1 was hardly earth-shaking. and the similar accomplishment by the S & P Industrials eVen less so. Of all the indicators listed. only the Dow Jones Transports were to achieve a truly decisive new peak. All the other indicators failed to join the Dow in new high ground. This is of some interest. since it constitutes a 180-degree reversal of what had been going on since last January. During that time. the broader based Standard & Poor's indices were decisively outperforming the DJIA. and the S & P averages were. in turn. being outperformed by measures of secondary issues. such as the ASE Index and the OTC Industrials. By contrast. in this weeks action. the Dow posted new highs unaccompanied by the other averages. It would not take a great deal to cause these others to confirm on the upside. but the failure to do so would be distinctly less than bullish. Another indicator of market diversity is the extent to which many averages find themselves below their highs of 1989 or 1990. The current upswing has failed to produce newall-time peaks for the Transports. Utilities. Financials. and the Amex. Indeed the Value Line and the interest-sensitive Financials and Utilities are still below their highs of 1987. All this raises some interestine questions regaroine thp. .nAtl1r'P .of thp…(lnr-rpnt cytJlj0) process. Is the current upswing a new bull market following a three-month bear ma-rket in August-October of last year, or is it the extension of a bull market which began in October-December 1987 and began to peak. in certain areas at least. as early as October 1989 The answer to th1S question is of overriding importance for the longer term picture which is why we have refrained from being dogmatic about long-range term prospects. We have preferred to note, as we have been doing since January, the continued indications of short-to-intermediate- term strength. Those indications were reinforced by the action of the Dow and of breadth last 1 week. ANTHONY W. TAB ELL DELAFIELD. HARVEY. TABELL INC. Dow Jones Industrials (12 00) 2969.81 S & P 500 (1200) 379.36 Cumulative Index (6/6/9il 6210.77 AWTjb No stalemenlor expression 01 oplmon or any other matter herein contained IS, or IS to be deemed to be, directly or Indirectly, an offeror the soliCitation of an offerle buy Of sen any security referred to or mentioned The matter IS presented merely for the convenience althe subsCriber While we believe the sourCes of our information to be reliable, we In no way represent or guarantee the accuracy thereof nor of the statements made herein Any acllon to be taken by the subscriber should be based on hiS own Investigation and Information Delafield, Harvey, Tabell tnc as a corporation and ItS officers or employees, may now have, or may later take, pOSitions or trades In respect to any secuntles menliOned m 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, labellinc , which IS registered wlth 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 mformallon on any security mentIOned herein IS available on request

TABELL'S MARKET LETTER 5 VAUGHN DRIVE, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 – June 14. 1991 If for no,reason.ther.than.Jheheat, we.are.re!DindeCthat.. summJ'. .jsupon u8,and!he so-called summer rally is. once more, a topic for discussion. We are, therefore, 'reproducing below the customary table. covering 94 years of market history since the Dow was first computed in 1897. One Month Periods (18971991) —————————— End Month ——— A–d-v-a-n-c-e-s D–e-c-l-i-n-e-s Average t Chg. ————– January 60 34 1.11 February 46 48 -0.21 March 57 38 0.73 April 51 44 0.87 May 48 47 -019 June 49 45 0.66 July 58 36 1.48 August 62 31 1.65 September 36 57 -1.34 October 50 43 -0.12 November 56 37 0.74 December 68 26 1.40 Two Month Periods (1897-1991) —————————— A–d-v-a-n-c-e-s Declines ——– A–v-e-r-a-g-e t—C-h-g-. 61 33 2.53 54 40 0.91 46 49 0.44 56 39 1. 65 51 44 0.78 48 46 0.39 58 36 2.14 62 31 3.39 54 39 0.27 40 53 -1. 41 55 38 65 29 0.68 2 02 TOTAL 641 486 0.57 650 477 1.15 As the table indicates. of the 1127 months since 1897. 641—or 57—have been advancing months. and 480—or 43—have showed declines. Thus. the normal expectation for any given —month -would -be-52-5aadVQnces- and, 39-40' decline -Slmilarfigurescanbeadducedfor-two-month' . periods. From the data above, We have been able to extract four patterns of a seasonal nature which seem to be statistically significant. The most significant one is the least known. the tendency toward a market decline in the month of September. Since 57 of all months since 1897 have been rising ones. the expectation would be a plurallty of advances OVer declines. However. precisely the opposite is the case for September. which. in 93 years. has produced 57 declines and only 36 advances. with an average drop of 1.34 percent. The probability of such a pattern being due to chance. a chi-square test tells us. is less than 1 in 1000. The next most significant pattern has been the year-end rally. illustrated by 68 rising Decembers in 94 years. Our readers know that we have published an annual comment on this phenomenon around December or January of each year. Another seasonal manifestation, which we have demonstrated based on data since 1926. although we have no idea of the reason therefore. has been the fact that the direction in which the market moVes in November has appeared to be a moderately successful predictor of the market's direction for the following year. Of the four seasonal phenomena. the least significant has been the summer rally. which is due to be analyzed at this juncture. As the table shows. the 58 advances and 36 declines for July are marginally better than one would expect. August shows an even greater aberration. The percentage advances for July and August. along with that for the two-month period ending in August. are the largest figures in the table. although December-January performance is close. Despite these figures. standard tests of statistical significance suggest that the summer rally is a less reliable phenomenon than the others noted above. It has been eVen less reliable recently. especially In July. with five of the nine Julys since 1982 having been down months. The most recent performance of the four seasonal indicators is mixed. July 1990 was up (barely). but August. along with the two-month period. saw a 10 decline. which continued through September. – validating that' particular seasonal tendency. The -average is rlow some 400 points above where it closed an up November. However, the year-end rally aborted. with a decline below the December low just before Persian Gulf success sent the market shooting upward. There seems t incidentally. to have emerged in recent years a brand new tendency—the occurrence of important market turning points during the summer months. Major market bottoms took place on August 12. 1982 and July 24. 1984. In the opposite direction. the top leading to the 1983 – 1984 decline began to form during the summer of 1983 and. of course. the major high for the Dow. preceding the 1987 crash. occurred on August 25. 1987. The October-December. 1987 low was a return to the normal pattern of fall reversals. but of course the short. sharp 1990 decline started from a July peak. AWTjb Dow Jones Industrials (12 00) S & P 500 (12 00) Cumulative Index (6/13/91) 2993.74 380.94 6141.94 ANTHONY W. TAB ELL DELAFIELD, HARVEY. TABELL INC. NO S1alemenl or expression of opinion or any other matter herein contained IS, or IS to be deemed to be, directly or Indlfectly, an offer or the sohcltatlon 01 an offerlobuy Of sell any security referred to or mentioned The mailer IS presented merely for the convenience of the subscriber While we beheve the sources of our Information to be reliable, we In no way represent or guarantee the accuracy thereof nor of the statements made herein Any aellonto be taken by the subscriber should be based on hiS own investigation and mformation Delafield, Harvey, Tabelllnc, as a corporation and Its officers or employees, may now have, or may later lake, posrllons Of trades In respect to any securlttes mentIOned m thiS or any future Issue, and such poSition may be dlHerenl from any views now or hereafter expressed In thiS or any other Issue Delafield, Harvey, labellinc , which IS registered With the SEC as an Investment adVISor, may gIVe adVice to I\S mvestment adVISOry and other customers Independently of any statements made m thiS or In any other Issue Further mformallOn on any secuTity men\loned herem IS available on request

\ TABELLS MARKET LETTER 5 VAUGHN DRIVE, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 9872300 –.-.- It Ain't Necessarily So Ira Gershwin. f2!gy and Bess We headed this letter with the above quotation 16 years ago. in February. 1975. We were reminded. this week. by the market reactions to unfavorable earnings news from Columbia Gas and IBM. of the difficulty in forecasting quarterly results. Our study of 16 years ago advanced the thesis that — even if such results could be perfectly predicted — the usefulness of such predictions for a price forecast was. at best. limited. Wall Street's conventional wisdom. in other words, ain't necessarily so. n Earnings for the Dow Jones Industrial Average were first measured on a quarterly basis starting in 1929. Thus we are able to measure percentage changes in 12-month earnings starting with the first quarter of 193'0. running through the first quarter of 1941. a total of 245 quarters. For five of these quarters. in 1932-33. earnings Were negative and comparisons are thus distorted. This leaves us with 240 quarters which can be studied. Of those 240 quarters. 12-month earnings for the Dow declined in 90 of them. Was this bearish for stock prices Hardly. and indeed. the scale is tilted slightly in the opposite direction. In more than half of those quarters. 49 of 90. prices rose rather than fell. Thus. paradoxically. a forecast of declining earnings is. however marginaliy. bullish for stock prices. (A bit of the same tendency is manifested on the upside. Of the 150 quarters in which earnings rose. 56. or more than a third. saw declining prices). The reason for all this. of course. is that the market anticipates rather than follows. It — is. sensibly. willing to pay higher prices for recessionary. below-normal earnings and is less –Willing tciplace a-premlum-onriBing. above-noriiiQIearnings-'Thus. Dow 'Jones earningsPeake(Ctwo- – – I years ago and have declined in 7 of the past 8 quarters. fslling some 33. Yet in 6 of the 8 quarters. the price paid for those earnings has risen. producing. in the process. a 600-point rise for the Dow. This is a falrly graphic example of the fact that multiples tend to move in a direction opposite to earnings. . This is amply borne out by the record. In the 240 quarters since 1930. the quarter-to-quarter change in the P IE ratio has been in a direction opposite to the change in earnings in 171 of those quarters. In the 90 quarters in which earnings were down. the multiple increased 67 times and decreased in 23. The most recent two quarters. the last quarter of 1990 and the first of 1991. are typical. In both. earnings were down sharply. yet the average posted a sharp advance in both periods. The same may well turn out to be true for the current quarter. It can be shown. moreover. that the multiple is a great deal more important in determining the course of prices than are earnings. As noted above. falling earnings produced fslling prices less than half the time and rising earnings. rising prices only about two-thirds of the time. Yet. in 174 out of 240 quarters. multiples and prices have moved in the same direction. To forecast multiples. as we have nuted in the past. it is necessary to turn to technicsl work. and that work does not. at this point at least. suggest serious weakness. The market's recent willingness to place a higher valuation on the below-normal earning power during a recession is a phenomenon totally consistent with the historical record. ' Dow Jones Industrials (12 00) 2957.74 S & P 500 (1200) —-376.78- Cumulative Index (6/20/9t 6111.76 ANTHONY W. TABELL DELAFIELD. HARVEY. TABELL INC. …- -,-. .—- ,,.- —– AWTjb 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 or the sollcltallon of an offer to buy or sell any secunty referred to or mentioned The matler IS presented merely for the convemence of the subSCriber While we believe the sources of our InformatIOn to be reliable. we In no way represent or guarantee the accuracy thereof nor of the statements made herein Any action to be taken by the subSCriber should be based on hIS own investigation and mformatlon Delafield, Harvey, Tabelllnc, as a corporation and tts officers or employees, may now have, or may later take, positions or trades tn respect to any securles mentioned In thiS or any future Issue, and such position may be dlReren! from any views now or hereafter epressed In thiS or any other Issue Delafield, Harvey, Tabelilnc , which IS registered wl!h the SEC as an mvestment adVisor, may give adVice to Its Investment advlso!), and oUler customers Independently 01 any slalements made In thiS or In any other Issue Further Information on any security mentioned herein IS available on request

TABELL'S MARKET LETTER 5 VAUGHN DRIVE, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 June 28. 1991 We write this piece on the final trading day of June 1991. and. thus. half of another stock-market yeaheI!o.-coJt!p!let …………,Th..-general.impression,among- investors seems tobe that …. 1—–the ..Augu.sl-likeheat which characterized June failed to produce a fever in equity markets. It IS interesting to try to account for this feeling, since 1991. so far. has not been all that bad. From its 1990 close of 263366. the Dow. last night. was up 11.44. It is possible that investors have been spoiled by post-1982 stock markets. In the eight years since 1983. the market has been up in the first half of seven of them. the only exception bemg 1984. In three of those seven. it rose by more than the 11 of 1991 By earlier standards. though. this year looks pretty good. There were better first halves in 1975 and 1976. but. prior to that. it is necessary to go all the way back to 1954 to find a better initial six months. From 1926 to 1974. 49 years. there were only four first-half advances better than that of 1991. One reason that the current rise may seem less than earth-shaking may be the fact that so much of it was crammed into the early part of the year. Although the first eight trading days of January saw an almost-200-point collapse before the Gulf War turned the market around. the apectacular rally oVer the next 27 trading days brought the average to 2934.65 on February 15. a level almost identical to today's. The market therefore. in one sense. has been stagnant for the past 4 1/2 months. True. there have been a series of probes to new highs for the Dow Jones Industrial Average—to 2973 in March. 3004 in April. and 3035 early this month. The overall trend. however, has been flat. That flat trend. though. has featured some frurly obvious shifts in leadership. It was less than three months ago that financial pundits were hailing the renaissance of the small stock. Between January and April. the NASDAQ Industrial Average rose an astounding 48. Since then. however, it has declined 9 through Wednesday. approximately twice as much as the Dow. Since April. the Value Line Index. The Wilshire 5000. and most importantly. the Standard & Poor Industrials and Composite indicators have been showing worse action than that of the DJIA. Th!, carnage in certin—,,-areas-,- of… the… hightech …sector'has been–truly h6f-rif ying '-!-'–It is-not only thiS recent leadership, but also much older leadership Which has shown signs of fatigue. For the first time in 1991. many of the consumer-goods sectors. such as health care. foods. and beverages. have exhibited signs of deteriorating relative strength. Indeed. in many of the component stocks. definable top formations are evident. It is true that these tops do not. so far, indicate more than minor downtrends, but they have formed at levels where such issues seem more fully priced than they have been in a number of years. To all of the above. there can be added the assorted nosedives produced by lower second-quarter expectations. Under the circumstances. it is certainly pardonable for the investor to regard the first half of 1991 with a certain sense of malaise. There eXIsts. also, a sense of ongoing deterioration. largely in terms of market breadth. Along with many technicians. we use a ten-day total of advancing minus declining issues as a short-term oscillator. Such an oscillator often reveals not only short-term oversold and overbought conditions. but also gives an occasional clue as to intermediate-term momentum. Thus, at Its March low. this total was at -1675. At the April low. it bottomed at -1967 and the recent bottom was -2904. It must stlll be noted. though. that the latter level is still typical of an ongoing bull market. For comparison's sake. as the 1990 downswing got underway last fall. readings of well below -5000 were achieved. Also, as we have noted in this space. cumulative breadth indicators. on both a daily and weekly basis. confirmed new highs for the Dow early thIS month. Despite this loss of momentum, the essential market picture remains, it seems to us, unchanged. The major averages have been confined in relatively flat trading ranges since April, and. until downside breakouts from these ranges take place. we would not consider technical deterioration strong enough to take action. These breakout levels, as we have noted. would be 2840 for the Dow and 365 for the S & P 500. Such breakouts. were they to occur. would be disturbing. but ..they.not-soCar-fromcurrentilevels-that there appears any need to anticipate them. Dow Jones Industrials (12 00) S & P 500 (1200) Cumulative Index (603909) AWTjb 2905.64 370.55 ANTHONY W. TABELL DELAFIELD. HARVEY. TAB ELL INC. No statement or expression of oplillon or any other matter herelncanlalned IS, or IS to be deemed to be, directly or Indirectly, an offer arthe sollcrtallon oj an offerlO buy or sell any secunty ralerred to or mentioned The matter IS presented merely lor the convenience 01 the subscnber While we believe the sources of our Information to be rehable, we In no way represent or guarantee the accuracy thereof nor of the statemenls made herein Any action to be taken by the subSCriber should be based on his own Investlgal!on and information Delafield, Harvey, Tabellinc ,as a corporation and liS aHleers or employees, may now have, or may later lake, POSitions or trades In respect to any securities mentioned In thiS or any future Issue, and such poSition may be different from any views now or hereafter epressed In thiS or any other Issue Delafield, Harvey, Tabelllnc which IS registered With the SEC as an Investment adVIsor, may gIVe adVICe to lis Investment adVISOry and other customers mdependently of any statements made In thiS or In any other Issue Further Informallon on any security mentioned herein IS available on request