–' TABELLS MARKET LETTER 5 VAUGHN DRIVE, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC 1609) 987-2300 r– March 6, 1992 In last week's leeter. we recalled a plece we had wnllen twenty years ago, at wille hme we selected ')IX favored growtl! fSsues of the day. II turned out fhar, after twenty years, jive of the su were down In pnce. We then dIScovered thar our twenty-year-old letter made equal sense today. M'GI new same–jollmvs lieJo'7S a repnnlo/ that letleihlhe-text -v-j;tU;iiVtclianged. -Ob-vioiiSly-;-w;Jla–Ve Picked SLX stocks,Usl;i,however, exactly tlie en/ena we used En 1972, a record of steady growth and universal insntutwnal approbatwn. 71,e three tables are ,denneal, subsn/unng the data for the new stocks and, of course, new (but comparable) dates for pnces and earmngs. TIle result IS as follows. Suppose an investor, at the end of September, 1990, had decided to construct himself a portfolio conslstmg of six wldelyrecognized growth stocks, Coca-Cola, Home Depot, Merck, Microsoft, Philip Morris, and Wal-Mart Stores He would have every reason to be pleased with his investment results to date. His portfolio value would be up 129, the first three columns of the table below showing the details, KO HD MRK MSFT MO WMT Price 9128/90 39 20 76 42 45 27 Current Price 80 63 151 123 75 53 Advance 105 215 99 193 67 96 Erngs 9/28190 1.94 084 435 1.74 443 1.10 Erngs YE 1991 243 1 20 5049 303 464 lAO Change 25 43 26 74 5 27 ThecI1.!claLquestion is …,.JVhy .d. !lnfQately.most lllvt9withsifi!.iJar P9olios woul'!. t'!.!l!nr, po41ti c about the merits of growth stocks. As the table indicates, however, market gains ranging from 53 to 215 were achieved on eammgs gains rangmg from 5 to (in one case) 74 The bulk of the portfolio gain was achieved, not through earnings growth, but through the normal bull-market process of marking up the price paid for a dollar of earmngs, Current Price Earnmgs 1991 That this process has advanced to a faIrly PIE Peak PIE 1987 mature stage is suggested by the table at left which KO 80 HD 63 2043, 1 20 33 21 compares the current pie raho of each stock to its peak pie ratio for 1987 As can be seen, three of 53 36 the six stocks are above that peak. The MRK 151 5049 28 40 implication, of course, is that further gains based on the market's willingness to pay a higher price MSFT 123 3.03 41 61 for earnings may be limited, MO 75 4,64 16 17 The table below takes 1992 estimated earnings for each of the six stocks, applies the WMT 53 lAO 38 34 highest multiple from the left-band table and indicates the price at whicb each stock would sell based on that mUltiple, As can be seen, the percentage advances from current levels on this basis are, in four of six cases at least, rather lilOlted Now it should be made clear what the above study is mtended to do. Most importantly, it is not intended to Price Eng. 1992-E Peak PIE Pot. FIx Chg make any judgment, pro or con, as to the current KO investment ments of the six companies. It IS also not meant to suggest that the target prices mentioned in the last HD 80 63 287 33 95 18 152 53 81 28 taole posses any practtcal value as the market makes new MRK 151 6.47 40 259 71 highs in a bull move, Le., that the purpose of bull markets is to discount rosy futures. It is also meant to suggest that, MSFT 123 402 61 245 99 in the case of such easily-selectable Issues as the ones above, tbe process of discounting may be reasonably well advanced. The investor's dilemma at this point is that MO WMT 75 53 5,57 17 95 26 1 72 38 65 23 further substantial multiple plays can probably be found only by recourse to less conventional stocks. Such recourse, quite obviously. entaIls the acceptance of a higher degree of risk ANTHONY W TABELL, CMT Dow Jones Industrials (1200) 3237.48 DELAflELD,HARVEY,TABELL Standard & Poors 500 (1200) 405,91 Cumulative Index (3/5192) 7363.19 No statement or expression of opmlon or any other matter herein contained IS, or IS to be deemed to be, directly or Indirectly, an offer orthe soliCitatIOn of an offer to buyor sen any secUrity referred 10 or menlloned The matter IS presented merely for the convemence of the subscnber 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 10 be laken by the subscriber should be based on hiS own Investigation and Information Oelafield, Harvey, labelllnc, as a corporation and lis officers or employees, may now have, or may later take, poSitions or trades m respecllo any secufll18S mentioned In thIS or any future Issue, and such position may be dlfferen/ (rom any Views now or hereafter expressed In ttus or any o/her Issue Delafield, Harvey, Tabell fnc ,which IS registered with the SEC as an Inveslment adVisor, may glVe adVice 10 Its Investment adVISOry and other customers Independently 01 any statements made In Ihls or In any oher Issue Further Information on any secuTity 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 March 13, 1992 Two weeks ago in this space we recalled an essay which had appeared over a thousand issues of this letter ago, in April, 1972. At tht tiJ1le seJt sixti!ional gI'9wth fVOritesLOf the day. a g1!pwhich wecnntinUl.dt('Lfol1owRntLwhich,some timeJatr. … we dubbed Vestal Virgins, cribbing that name from someone, probably Alan Abelson. The general conclusion of the piece was that the six issues in question were more or less richly priced and that much of their advance over the prior 18 months, which had been substantial, In was due to the market's marking up of their prices reviewing that letter 20 years later, we discovered rather,th-an-a-ct-ua-l e-ar-nings -gro-wth. —————–, that, of these six stocks, all respected favorites of professional money managers in the early 1970's, five had, over two decades, actually declined in price. Then, last week, we came upon another interesting phenomenon. We discovered that, by choosing six new stocks, using the same criterion-institutional popularity–we had used 20 years before, we could virtually duplicate the letter of 1972, leveling the same criticisms that we VESTAL VIRGINS llli Avon Products Coca-Cola Eastman Kodak Home Depot IBM Merck Polaroid Microsoft had at that time. It now becomes necessary to ask the obvious Sears Roebuck Philip Morris question. Is the market msking the same mistake it made 20 Xerox Wal-Mart Stores years ago Now history does repeat itself but the repetition is seldom all that simple and there are, we think, a few differences between the way the market is treating today's vestal virgins and the way it treated, in the late 1960's and early 1970's, the six issues which have now achieved a somewhat frumpy middle age. In looking at the price/earnings ratios for the current favorites last week, we noted that they ranged between 53 and 16, with an average multiple of 35. In April, 1972, the six earlier darlings of the mvestment community were carrying pIe's between 32 and 72, with a mean of 52. Clearly the current outbreak of growth-stock mania is a less violent manifestation. .- – B a s e d purely-on-rccollection,-we-have a-.imilarimpression of today's markct-climatevis-a-vis-that-of-the-1970'3Back then;—- .- learned articles were being published about the One-Decision theory of equity investment, which held that stocks needed only to be bought and never sold. (We suggested, at the time, that money managers subscribing to the theory should halve their fees, an idea which never caught on). It is our impression that no similar mystique exists at present. Today's managers, it seems to us, may justify their holdings of growth stocks based on projections into the future of past impeccable records, but they seem, at least, to worry a little bit about the prices being paid, rather then exhibiting the blithe unconcern about those prices typical of the 1970's. Ultimately, the event that did in the old-time growth favorites was the sudden emergence of their vulnerability to the business cycle. To the absolute horror of most investors, the earnings for most of them actually declined in the 1974 recession. The result of this was not only price collapse in the 1973-74 bear market, but a subsequent failure ever to regain the luster they had once possessed. When earnings for the six–for widely varying reasons–turned erratic during the 1980's, the situation was further exacerbated. The result is the fact that the group is today selling for less than it did two decades ago. In contrast to this, it must be noted that the six current favorites have, by and large, gone through the recession of the early 1990's with flying colors, posting continual quarter-to-quarter earnings gains in the face of a weak economy. For as long as they can continue this performance, it is likely that investor confidence in them will remain at its current high level. Should any of them tum out to be vulnerable to external economic forces, it could be subject to the same sort of debacle that finally afflicted the vestal virgins of 1972. For ourselves, we retain the belief that we had 20 years ago-the conviction that investing is more complicated than finding issues whose earnings have been rising for ten years and huying them on the theory that they are thus likely to rise for another ten. The real challenge in growth-stock investing, we continue to feel, occurs in identifying such issues at an early stage rather than a later one. Of the six current favorites, Coca-Cola, Merck, and Philip Morris have, admittedly, been around for sometime. Wai-Mart, though, was not listed on the NYSE until 1972. Home Depot had its initial public offering in 1981, and Microsoft went public only six years ago, in March, 1986. It is easy to recognize today that these companies possess admirable records. It was less easy when they were a -good deal smaller. . — – –. – – – We concluded a series of letters on growth stocks in 1973 with a quotation, as follows. Selectivity took on a new character by reason of the overshadowing emphasis placed on expected future growth as the prime criterion of an attractive investment. There was nothing wrong with these… ideas, except that it was almost impossible not to carry them too far. With encouragement from the past and a rosy prospect in the future, the buyers of 'growth stocks' were certain to lose their sense of proportion and to pay excessive prices. We think it is a valid point today, although we first used the quote in 1973, and it comes from Benjamin Graham, wnting in 1951 about 1928-29. Citing another ancient sage, we went on to note that Bernard Baruch had once remarked that, in times of market optimism, it is useful to keep repeating to oneself that two and two make four. It will not, we think, be unhelpful to keep this advice in mind during the 1990's. ANlHONY W. TABELL, CMT Dow Jones Industrials (1200) 3219.14 DELAAELD,HARVEY,TABELL Standard & Poor's SOO (1200) 404.64 Cumulative Index (3/12192) 7332.23 No statement or expression of opInion or any other matter herem contained IS, or 15 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 for the convenience 01 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 Information Delafield, HaNey, Tabel1 Inc. as a corporahon and Its officers or employees, may now have, or may later take, positions or trades In respecllo any seCUrities mentioned In thiS or any futum Issue, and such pOSition may be different from any views now or hereafter expressed In this or any other Issue Delafield, HaNey, 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 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 March 20, 1992 It was the best o/times, it was the worst o/tm,es… it was the season o/Light, it was the season of , —- D.akrress,,tJvasJhespring a/hope, it.wasdhe wmter-of.despair..'!-, – -'- — —.—. – – . – Charles Dickens, A Tale of Two Cttles Mr. Dickens' famous quotation could be used, in 1992, as the lead for A Tale of Two Markets.' The two markets are those of -a'IItho- tl.S. and Japan, and, indeed, the contrast could not be greater. True, it is certainly possible to interpret the tenpoint, point-and-figure pattern for the Dow, shown at left, as representing a short-term top, with this week's early strength constituting a move into overhead supply. That's the bad news. The good news is that the downside objective in the low 3,OOO's represents strong support, and any move to that level would constitute a buying opportunity. In any case, our U.S. market remains within a few percentage points of its all-time htgh. Across the Pacific, however, the story is entirely different. The Nikkei Index peaked on December 29, 1989 at 38,915, at which level it was up over 1000 from only 3,355 in 1974. Meltdown Monday of 1987 in New York produced only a minor blip in Tokyo which, at its peak, had exceeded is 1987 high by 46 while the Dow, by 1989, had barely equalled its 1987 peak. From there, the divergence began. Tokyo .od to-acccmpany-Wall-Street-into'Ilew-high territory – – Dew JONES INDUSTRIAL AVERAGE in 1990, and when we, in October, 1990, were down 10 POINT barely 20, the Nikkei was off 48 at 20,221. On Tuesday of this week, it broke below that low to 19,837. Indeed the Japanese bear market is one of record-setting proportions. The 48 fall is not only the biggest drop in Japanese market liistory, but one of the largest on record for any market. Our biggest decline in recent years is the 45 drop of 1973-1974, and even september-November, 1929 was under 48 . Our friends across the Pacific are clearly playing in the big leagues when it comes to bear markets. Nor, can the outlook, from a technical point of view be srud to be alii that encouraging. At right is shown a WOO-point P&F cbart of the NiKkei, and that last posting at 20,000 looks, for the moment at least, to be addller. We would certainly want to await evidence of technical strength before' buying into that particular chart pattern. Ironically, the current conventional wisdom holds that an all- powerful Japan can do Just about anything it pleases, as far as its economy is,concerned. It is stated tbat they will not allow tbe Tokyo market to go down much further, much as another they' was going to stave off the ongoing market decline in the early 1930's. lhdeed the history of that era might well be studied by the Japanese powers tHat be. What was essentially a stock-market phenomenon in the fall of 19'29'turned into something a good deal more pervasive 10 1930-32. We in tlie'lllnrted States managed to avoid this outcome in 1987. It is devoutly to be'wislied that the Japanese will prove as successful in the early 1990's. It has always been the contention of the technician that stock markets tend to lead, rather than follow, the economy. By tbe time Americans were beginning to become aware of Japanese competition, the Nikltei, which, wben tbe Tokyo Stock Exchange opened in 1949, was NIKKEI INDEX 1000 POINT selling at tbe same level as tbe Dow, was at ten times the DnA's level. Now that Japan-bashing has become tbe polibcal fad of tbe day, it suddenly emerges that Japan's Stock Exchange has undergone one of tHe largest collapses in the history of finanCIal markets–a phenomenon providing a qUlte different impression of that country's economy fiom the one we tend to derive from the daily press. At the very least, the devastation of the Nikke. may be suggesting that the long outpmGrmance of the U.S. stock market by Japan's may be over. AN1HONY W. TABELL, CMT JJ)ow, Jones Industrials (1200) 3268.11 DELAFIELD, HARVEY. TABELL Standiml & Poor's 500 (1200) 409.78 Cmulative Index (3/19/92) 7394.73 Nostalemenlor expression of opinIOn or any other matter herein contained IS, or IS to be deemed to be, dlreclly or mdlrectly, anoner or the soliCitation 01 an offer to buy or sel! any security referred to or mentioned The matter IS presented merely for the convenience of the subscnber While we believe the sources of our mformatlon to be reliable, we In 00 way represent or guarantee the accuracy thereof nor olthe statements made herem Any action to be taken by the subSCriber should be based on hiS own mvestlgaliOn and Information Delafield, Harvey, Tabell Inc, as a corporallon and Its officers or employees, may now have, or may later take, pOSitions or trades In respect to any secUrities mentioned In Ihls or any future Issue, and such pOSllion may be different from any views now or hereafter expressed In thiS or any other Issue Delafield, Harvey, Tabellinc which IS registered With the SEC as an mvestment adVisor, may give adVice to liS mvestment adVISOry and other customers Independently of any statements made In thiS or In any o1her Issue Further mformatlon on any security mentioned herem IS available on request

TABELL'S MARKET LETTER 5 VAUGHN DRIVE, eN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 March 27, 1992 Since dramatically breaking the 3,000 level in the fall of 1991, the Dow Jones Industrial Average, after a decline of been6.93, has continued to advance, albeit at a slower rate, to a recent high of3,290.on March 3—Fithin t!lis-nrltime''-I frame from'last flill to-date coiiStinitiilg ito tradfug days,- there-lillie someobvioushortte;m–;'han in the group and sector leadership of the market. As these shifts continue to unfold they should be monitored closely and should be of interest to all of us. The table below enables us to compare fhis period from October 1991 to date with the most recent twelve-week changes for Standard & Poor's Industry Group Indexes as of fhis Wednesday. The start of the October 1991 period is coincident with the then record October 18 high of 3,077.15 on the DJIA. The figures on the left show the 33 best performing groups out of a total of 95 from October 1991 to date and is ranked in that order. The table on the right is ranked on the past twelve-week changes, or from the start of fhis year, and shows the best performing groups for that period. PRCM Dec ll. u n umt t CEI'J. 1 41..121 I 40.364 1 31.387 … 35.609 5 30.738 Ii 26.231 '7 25.8 8 12.197 51 21.364 10 Z0.6517 11 20.376 CSQ.PIlCIM OCt 115 lnl RARX … 37.983 z 55.215 1 61..742 22 16.832 8 21'.735 42 8.818 11 l2.41U , 29.137 16 21.364 6 30.368 11 2.. ..016 ..,.,. .- BL'BCT'RO'lrCOICOS',msi.s.'.aa.a.s.. OIf ….. BUILl BZCUIDDQ GBlf. !IJ'l'OU AD'l'O PUTS- ArrBIl IGRIB'l' RLBCft01ttcs ,SBMlcarmtJCTORS BIlAVT D'I1l'f 'l'BlJCQ PA2'1'S …………,.,. '.S..O..'….,T.O,.U..D …. 'lIDnCM OCt 16 1991 1 61.7U 2 5'.llS 3 52.280 .. 37.983 5 30.710 , 30.'68 ,. 251.137 8 27.735 II 25.370 10 24.850 11 24.096 PRall Dec 31 1991 RARX t CB3 3 37.387 2 40.36 14 17182 1. 41.l.l1 20 11.900 10 Z0.6'7 8 3.l.191 5 30.738 53 O.7!i19 62 -3.U7 11. 20.376 fIJOSBIIOU) P 10 A BIm Ma.TEIlIALS 12 18.'182 II 17.370 15 31.52.5 26 PUBloUlBDIJ umwsPAPBJlS) 2 24.003 13 22.288 lt 22.048 15 16.186 7 25.968 11..377 ii J Jc ,'LDIIG 24.003 A 15 11.S2S 21.364 TKS i ; i PAPEIlPORBST PR.ODaCTS 18 13.389 n l.1.!il67 SDUPBRABOLPD PDRQ.DIJCfS 17 19.337 18 11.149 18.407 BICLtll)DQ I.B.H 7.10 -; 19 13.200 45 8.1'73 –L– '; –ii5lO. IlRS'l'1lD2Am'R I.&zstmB-TIHl''''''''''-'''' -ig,– 2 18.783 21.3' 1.659 U.468 70 -5.840 25… t– i it; – POBI.XSBIm nmfSPUBRS) 22 11.377 At11'CMlBILB 16.832 35.609 IIJRBY cmrrmr. BARJlI ,. ..AB8TMJRARl'!I t.BIBURB TIMR BMU (CCIG'09IT8) OFFICI RQOIPMEm' 10 BlJlIPLUS aMGDlC1AL SBRVICBS ALUMNUM ,…,..,.,. ..ptlBLISHIPO CKEMICALS HBTALS MISCllLLMBOOS ' YDIVBRBIFIBD 23 11.112 Zt 10. ,fifi 25 10.126 26 10.018 27 SI.llS 28 7.051 29 6.867 30 6.396 11 6.221 32 6 .172 33 5.667 7.541. 20 l.7.660 1.7.056 9.883 16.101 3.915 4.123 16.509 50 6.962 00 '2.622 57 5.659 PIJIILISBIRJ OrPIa BQUlJIMBIff strPPLIBS 1QIIOAQ IILl)Q MTBIlDILS CCIMPO'l'D. BOP'l'IWllI SBRYICBS GBNBRAL MBRCHANDISB CBJUlCS IIDTBL/..,…. ll2'1'AXL1 SPBcrALT!-UPARBL PAPER POUST ftODtJC'l'S 16.509 16.101 15.418 15,011 11.838 13.858 12.768 30 U.646 31 12.436 12.132 J3 U.t67 6.396 9.31.5 4.354 13 17,370 35 5.328 56 -1.368 15.621 5. -1.658 ..746 9.353 1.3.389 An inspection of the left-hand table shows the list has been dominated by the consumer-durable, transportation and natural resource sectors of the market. Not surprising, is the under representation on fhis list of the consumer non-durable sector, last year's place to be. Also conspicuously absent is the entire energy sector. Substantial gains in groups related to machine tools, electronics and autos from October 1991 to date have relatively outperformed the S&P 500 Average by a significant amount. Other groups, however, have dropped in rank when measured from the first of this year. These groups would include soft drinks, toys, cosmetics and retail related groups. – The right-hand table, while continuing to favor the consumer-durable sector, shows an interesting number of new names to the list. These groups would include aluminum, chemicals, and metals, to name a few. Many of these groups were among the worst performers last year, but have, in the last twelve weeks, moved into the top fhird of the list and certainly bear watching. The central theme to be developed from this type of periodic exercise is to monitor group and sector rotation onan ongoing basis ill order to refleCt iDteal changes occurring within-tii k market. The importance of these internal changes will continue to help us identify new leadership in a maturing bull market and, conversely, will show potential sector and group deterioration which would signal a correction or significant change in the stock market. Robert J. Simpkins, Jr. Delafield, Harvey, Tabell Inc. Dow Jones Industrials (1200) Standard & Poor's 500 (1200) Cumulative Index (3/23/92) RJSaa 3252.91 406.36 7379.92 No slalcmenl 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 matler 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 of the statements made herein Any action to be taken by the subSCriber should be based on hiS own Investlgallon and Information Delafield, Harvey Tabel1lnc ,as a corporation and Its officers or employees, may now have, or may later take, posilions or trades In respect to any securrtles 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, Tabelllnc, which IS regIStered With the SEC as an Investment adVisor, may give adVIce to Its Investment adVlSory and other customers Independently of any statements made In thiS or In any other Issue Further informatIOn on any security mentioned herlln IS avaltable on requesl