Tabell’s Market Letter – September 20, 1991

TABELL'S MARKET LETTER 5 VAUGHN DRIVE, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 September 20, 1991 We made. before departing on vacation four weeks ago. one of this letter's least prescient recent- fOl'ecasts;-'suggesting ….thatthe tradlng…. range-' which had. contaIned the-Uow through spnngand summer would likely be penetrated. one way or the other, before our return. This was, however, despIte the momentous news events. not the case.. The Russian coup sent the Dow to an intra-day test of the range's low. and the coup's faLlure produced a couple of new-high closes which. like so many previous ones, failed to follow through.. On our return, the market was within a percentage pomt of where it had been when we left. It is QUI' occasional practice, when returning after a long absence, to sort our 3, !lOO-stock universe in performance order in the hope of ascertaining precisely where market leadership existse A preliminary inspection of the printout early thi!i week was confusing. since there appeared to be no clear cut leadership. We decided, therefore, to work on the statistics a b1t more, and we eliminated all stocks selling for under 10, producing a umverse of 2,221 stocks, which we then divided into five quintiles based on percentage change from Friday, August 16, through this Wednesday. 465 of this group were included in the S & P 500. The performance of those 465 issues deviated somewhat from the norm,. 93 stocks in each quinhle would be the normal expectation but only 68 S &. P 1ssues were in the best performing groupe There were, however, 178 stocks in the first two quintiles comb1ned, a number almost equal to the expected value of 186. A possible reason for the paucity of strong stocks in the S & P may well be the components' lesser volatility compared to secondary stocks. Capital weighting of the average also provides some explanatione However. no really clear eV1dence of beUer performance by secondaries is shown. We undertook the further exercise of dIviding the 465 S & P issues into industrial subgroups and counting the number of stocks in each quintile for each group,. Those counts are shown 1n the table below. IIUIIUll( GOllr I 1 .1 (IOur I——–.;;;;;;;;——————-;—;—–;—;–; –;-c;;;6;O;;;———, ALUIIII/Ull UTOOtlLE 00\ 000 0 (llltrU1R SlSTEI'IS I OFFICE EOUIPIIEIfT I SUPPLIES AUTO PARIS-ArtU 11,,1 N,W' DUTY TRueRS I PUTS PEvtnOES ALCQlltlU( SOFT 01t1N5 &LO HATERIALS tIlEIIICLS (!PClAllY) II II 0 0Z I I 0 I 0I II0 ! OIL , Glill DRlLLlN(I 0 DILl 'N'tOlllltEO OONESTIC OIL IIHEQRATED IIHRNUIONL I OIL WELL GUIPIIENl liND SERVICE 0 r,VER-FOREST PRQDUC19 0 POLLUTION CONIROL CHKICAU; CNEI'IICALS-OIV. COAL CDl'IlIERCIIIl S(R\lICES CDl'lrtUtllCAllON OUIP/llrR! tOllfUlE' SOFTWARE I SE.WlttS 1 I 3 0 2 1 2 t I I 0 II 200 t t0I01 I 200 2 PU811SHINIl PV911SHINO 'NWSPPII5) '''0,0(''6' f((l11il IIES1IiIUUNTI REUIL STORESI OEPARIENT IIEUll nOIlESIDRUOl CDNGlOI'IERATS CONUINER IIETAL I GLASS 2 I020 (I l O t (I rooD (HUN GENERAL IIReHANDlSt CHAINS CON1IIINR APR COSIITlCS 1200 0 00 I 2 I RETAILI SPECIALtT RUllI srECIiIILTl-APrAREL ELECTRICAL OUlrKEN' ElECTRONI(SOEFEHS nCC7DHIC5HNtHRUtlrHT'T1()N lECTRONICSISEII'CONUCTORS NOINRIND I CONSTRUtTlON 0 0 0 0 0 J10 I02 CJ J 004 1I0 SHon NOUSENOlD rROOUCTS STeH ULCON elOND OI&INC1 In1tLE /lr/lRL FRS. NtERIAINENI OOOS fOOD wNOLESALERS !lOLo HAlHlWARE I IDOLS ,Oll 9UllIKG DRUGS NALTH CAR-DIVERSIFIED HEAlTN CAR-IIISC NosrllAL IIANAGEIIEN' COllrNIES I'IE!'ICU rROIIUCn. I SUPPLIES HOt(L/OTl IIOUI/ARS 140USEHOLl) r I … INSUoIINCE 'OKERs LElSUF. TIllE ,.oIICNIHE TOOLS ,.oIICNIIIIIl-D IYERSI flED I'lANUfACTURINGColY. IND.) ETALS ISClLAIIEOU5 I sCELLAEOUS , ,,,I,, — ,,,,,J ,,J ,,, 0 3 ,,,,, ,I J ,, ,,I ,,,I . ,,I , –.- –.- loUCtO IQTS LECIRIC COANIU NAIURAl GAS TElEPNOIIE MElli AIR RANSPORI RAILROADS nrRUACIKISEPRS-lase. IHIIIEY CHtER 'ANy;g IIA,JOR ROIONAL UNIIS OlHER UOR 'ANKS lIFE INSURANCE Ul TI-LIN INSURANCE PRorRIT-CASUoIILITT INSURANC SoII'INOS I lOAN COPANIES PERSONAL LOANS FIltANC'oIIL ISCEUA'EOUS – OUINI ILL ,,,,,,,,,,II,,,,, -,,,,,,,,,,,,,,I,,,,,,,,,,,,,,IJ,,III,,,,T——– , ,I I ,,,,,,, ,, I ,, ,, ,,,,I , ,,, The remarkable thing about this table 1S the absence of any eVldence of leaderShip. In the vast maJor1ty of cases, the stocks in each industry group are divided Just about evenly among the five quintiles,. Some important groups, electric utilities and oils, for example. reveal some upward bias, but it is hardly s1gnificant.. We return, in summary, to face a market where the trend indication rema1ns unclear and one in which no general areas of leadersh1p clearly present themselvese ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL INC. Oow Jones Industrials 02 00) S & P 500 0200) Cumulative Index (9/19/91) 3031. 75 388.39 6299.63 AWTJb 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 security referred to or mentioned The matter IS presented merely lor the convenience of the subSCriber While we believe the sources of our InformatlOtllo be reliable, we In no way represent or guarantee the accuracy thereol nor 01 the statements made herein Any action to be taken by the subscrtber 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 lake, posItIOns or trades In respect to any securities mentioned rn thiS or any future Issue, and such position may be drfferent from any views now or hereafter expressed rn Ihls or any other Issue Delafield. Harvey, Tabetl Inc. which IS registered With the SEC as an Investment adVisor. may gIVe adVice to Its Investment adviSOry and other cuSfomers rndependently of any statements made In thiS or In any other Issue Further In(ormatlon on any security mentioned herein IS available on request