Viewing Month: August 1950

Tabell’s Market Letter – August 04, 1950

Tabell’s Market Letter – August 04, 1950

Tabell's Market Letter - August 04, 1950
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P-,',—————————– — ——- Walston-Hoffman &, Goodwin, SAN FRANCISCO, CALIF, NEW YORK, N. Y. PHILADELPHIA, PA. LOS ANGELES, CALIF. .,9'- 8AKERSFJElD BEVERLY HillS EAST ORANGE, N J. HARTFORD, CONN LONG BEACH MODESTO OAKLAND RIVERSID!! SACRAMENTO SAN DIEGO SAN JOSE EUREKA FRESNO HAGERSTOWN, MD. HARRISStJltG, PA PASADENA PIITSBURGH, PA. PORtlAND, ORE. SANTA ANA' SEATTLE, WASH STOCKTON VALLEJO TABELL'S MARKET LEnER 35 WALL STREET. NEW YORK 5. N. Y. Digby 4-4141 In last leek's letter I expressed the opinion thThtWRf iaj ,line conpanle. of;er outstrmding profit pDss'Lbili tL s fur I!!-m9'on , 'st')ck buyer vlhose chie, interest is in long term capitBl gains ruther than in vurrent income. I stated twelve reaL,ons some technical and some unda i', nental, for thIs conclusion. Lee us novi consider some 01 the 'Leemingly un- ,favorable factors in the airline situation. At the em, c' World War II both the .'3.irlines aI1d the investing pu;lic ,.-ere ver' optimistic on t;,e future of the industry. The companies e;;panded rapid 1\' . Tey borrolved money, boug.ht ne'; equipment, hired big sto.f,s and extenled their routes. Passenger revenue increased sharply in 'he period bet1'ecn 1)46 an6 1948, but not uS l'apidl- as the te0 rapIdly ex- ,panl ec. coses. Ac a result, most companies lost money in the three-e.lr per, ,,'. Air rle,ll S;)',)sidies, '.hih ;,ad been reducec. 2, in 1945, were L ,s,a),'ply inreasc( i1 1948 In an eff rt to assist se;;e Clf the more mar,;inal ',;. ' ,p'lies. In 1049, 1;ile picture slc,'l;; started to c'lanGe. Costs l'ere cut '. tlL',rply ariC, as trafic cClnJinue1 to increase, '1 large '.i'1ount was c'.rried , 'n Lnto net In ),0. This improvement 1li',S coneinued lnto 19S0 vlhic- brings \'.p t e possi!.ility cf rl cu'c in /,ir .nil pY,1ents , I shall n0t atte1Pt to enter into the argument of novi f.lUch of' air ,',8il Pl,- is '-,r serviceD render0( an h01 much i8 sultic',y. Tile iolportlnce -. tle question varies itl indi,vidu;-;l companies. Air rfall revenues are less th,m ''7 ,r t0tal reVC;1Ue 'r E23tern All'line, a; ag,,inst 2'J Lor SOFle ,, t ,e sFi.ller c.arr.Lers. ',';le rne v,l'ies ,'idelr , Some of t1,e smller 'cr'rrLer; receive tel, tir,lee as ;.111 p2r ton i1'.-1 '5 so(,le or t'1e .'.trol1Ger ,', ;.irlL1e, In m.' event;, as totnl reVUlUe increase3, the per(,2nt,fe )l de- po-t'ence 'n ir ..ail vlill r.ecli1e. Mail ',;'.S 11 , total re\'enUe3 ',n 1949 ', s ,,;ainst 3'; ,.n l(;iO, ,'tal o,ir iLil r.eveme ,1 1949 12.S 58 .illion. ,'- I '!e c-nBjder r1.',t h2.1 ,' it ',',as c;uC)sic.J (lhi l ' is ver; q'-estion)le) it ;;'J.s still a s!la11 (-3t Lor !laincainin, approxi,ately 1000 tr–.nspcrt plC'.nes ' '1' potentlal 1een3e purposes. It in ver; s'lall s cor'.psrec. '''-;'1 s'1e 3 , ''illi,n (ove).' one hun(cre(, times as ;mch) I.e h;,lve t,ed up in.'ar.1 p'ice ftlp)rts oi pe;il1uts, potr coes 1.d ct-er 1'c.rm cor(Jc(l icier, . Un 2er t iC pr2cent ',;v'tential ';a1' e;1erc.ency, it is ('oubtul that dn, c'lange '1111 be ,ue ''n lr ''i.l rates. An(tieCi' possi'ilit7 is the co,,;ml',deel'if, o' the airIleet in , ' r e;;wrcenc)', Thls ,ppers doubtful. In Worl,l W-i II appro;'i–mtely 40 cf '/e' 0 airline pl,mefl Here t.ken ewer J,'Jt i;1Cre'1sinc; load fae or of tile re,;',.t.r,,' planes 1(' T'C th,n ut'I'set the (Lference. During 1943 tc 1945, plQ,nes ,,;-'pec'ateci. ;.;; p.ppr( xi, ,E',telJ- 90 capacit' ; '3 co;–.par8d with appro;i Cltel;' (0 , ii'l 1;41 ad 10il . ,'he '1V'-, ',Ie factors end t1e very attrC'.!'cive technical p;tterns ,appe.ilr to greatly' ,''ce,;,,; t;e potentiall- unLevc', l.)le o.ctors. Fron a tech,,';Jc.l lOilt (,f 'Ie'. ,the –)l'\'inc ss'.1er have at,-';cactive .raph p;ttrns . (1) In t.!e Cl VL en(,-p(l.).n( pref erreL stocle c;roup, Afilerican Alrllne3 , j'3,'0 pref'errec' sellinL at ;-5' and convertitle lnto 4.6 shares 0' cO.r.;on, ir-.l( Unite; Alr Li.!,.50 preferred, \,, convertible into 4,2 shrres 01 1 C 'rJ ,)11 appe2r nttrac ti ve i'or incont plus appre' iation. (') In tlle ')etter c;raoe CO!!1;lOr, steel; class,f; cation Alerican Airlines , ( 1) ) C(.1( Eastern Airl''nes (1(; ) are ,1utstandc',g, 7he 19115-2!6 ;',Ihs ,'ere ;,1 1/2. and 33 -!-. Be,t lssues are in strong L,ancIcl position ,',nel ilave .11 ,jependeflce ,'n E',.Lr . il subsidie,. The ch,;rt potterns indicrte at ,,'.(,' t an appr( ',1 .,'ti(',1 (' tl e 1911'46 highs. . c) III tl v)re 0peul,tive ;,r('up, 'illuse ejJenaEnce on .ir , a'l cub- ;31 les is l'J)t ,',(Jr.' Llp0rtmt, I 1I0Uld inclUde li',ed Air LinelJ (13 ) and I ' Wil (,O ). TlE. 14116 lliC'lS I'ere 62 1/2 Qnd-' , S. Neitle2 0' tlJese S3ues ''Gr;;' in as scunC 'innncLl positio') aIS A'eric'..L a,ld Ecst;el'n b;t cC,clld ShOll '; re,-.ter pe','ce.l'ca 'e ppr.;latIr,n 11 a ;.)OU 8.irl..e (,mrf(' and t;reat(,, 105ses 'J C. Q. ,.- ec 111in I !o.r'cct.. . , (it) In t' ,e Rztre ,el' specllat,Lve ,-,roup I l1c,,',ld choose We. te.rn Air Line; . ,( 1' ) an' 31 ;Li,,'l Alr;'2-S ( 10) cmd ,,;,'r,thnst AirlL'lcs (12). 'rhe 1945-6 , ; ,,-,b ',!el'er.upe t,',vel-' he; 1/2 ,'r WRstern, 3'( 1/2 i'or ErcenL'f' 'l' 63 1/2 . 'r \'rtl es (,. ,.p;'eGe ..LBS'.leS are pel'1.1,,tive b ' t Llat.. ( ',.1 Lc1e Q,ppreci2. cJ lon if' PrJElS . i I i L.l . C) All t,le abrve issues f.re listec on t 11e N.Y.S.E. I', the unlis'ced tel' Delta Airlir.o,,, '/'. is cLlts-candln,. TL 194,-46 high .. as 69 1/2, ';',e Ji;;pany i.s ,,ne 01 ,e tetter resional 0ar iers, S..nce 19 1!1,coLp'.ny has ('urneL .me in ever' ear \'lith 8F!eptlon 01 1,)7 a,1d has p,',ld dividends AIn' lIT\tttt.lse jind\O; lnitf,s' i som;cJr '0…. l..fipon in'ormafon eJle\l'fld e .r CI til ane; ar Of ,ollcitatlon ell of the securities mentioned herein. tel/able but not necessarily compl.fe, of The Is onlofoffre.ngqolltllolnlt9bnumtyeaetdoerr l.laelJ..IchLcWulr,bft,l&eoerr/h.f.i.MFlp,rAonmbdyi1is'f.Iin.&lorl-ttl1Iti'n.;4lletnM'td teDWdralosftofoInnr,efodHrOmoJfaeftmiolannndeo&pnelyGn.doMoItdIwIsi)nnbqaumslea.yd ….. … …….. . – – .. -.. '. ;, . .- – — –

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Tabell’s Market Letter – August 11, 1950

Tabell’s Market Letter – August 11, 1950

Tabell's Market Letter - August 11, 1950
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N! — '.' ., 'Volston.Hoffmon &. Goodwin. ;' SAN FRANCISCO. CALIF. NEW YORK. N. Y. PHILADELPHIA. PA. LOS ANGELES. CALIF. 8AKERSfiELD BEVERLY HILLS EAST ORANGE. N. J. HARTfORD, CONN. LONG BEACH MODESTO OAKLAND RIVERSIDE SACRAMENTO SAN DIEGO SAN JOSE EUREKA fRESNO HAGERSTOWN, MD HARRISBURG, PA PASADENA P1TISBURGH, PA PORTLAND, ORE SANTA ANA SEATTlE, WASH . STOCKTON VALLEJO TABELL'S MARKET LETTER 35 WALL STREET, NEW YORK 5. N. Y. Digby 4-4141 HOTEL WALDORFASTORIA PL… 96860 6- ..3 The industrials and rails last week, at 217.53 and ,reached ,'new high territory since the Korean decline. The advance has been rapid and ''Would expect at least a consolidating phase. The industrial average has re- traced two-thirds of the decline from the June highs and appears overbought for the short term. For the past six weeks, the most popular pastime in Wall Street has been the compilation of lists showing how the earnings of various companies might be affected by the imposition of an excess profits tax. Con-' Sidering the fact that the provisions of such a tax are not known, and most ,likely will not be known for several months, any conclusions to be drawn 'from such compilations could be subject to considerable amount of error. … Most observers have used the E.P.T. provisions of World War II as , the basis for their conclusions. This results in rather unfavorable potential, earnings for the growth issues such as chemicals, television, utilities,etc., 'and some rather favorable earnin6s potentials for quite a few companies whose management and outlook could best be described as mediocre under normal con-, tiitions. Basing a possible 1951 E.P.T. entirely on the 1942-1945 E.P.T. ' might result in some rather bad mistakes such as occurred in 1942 when the .1917 -1919 experience was used as a criterion. For example, the soft goods ..' issues were heavily sold after Pearl Harbor on the theory that their tax and economic picture was unfavorable. Montgomery Ward dropped from a 57 ;..high in 1940 to 23t in 1942. A year later it was selling at 50 . .; The purpose of an excess profits tax is one on which everyone .agrees – namely, to take the profits out of war. However, in applying this principal, it is impossible to be entirely fair. It is very difficult to ',differentiate between increased earnings that are due to war and increased ,' earnings that are the result of normal growth and efficient management. , It is doubtful that E.P.T. of World War II will be used in its , ntirety. I believe that the government realizes that there were several L inequities in the Act. Some allowance was made for growth, but this prin',ciple may be further enlarged in a new law. Also, the profit on direct war work may be sharply reduced by new forms of contract that will apply to sub- contractors as well as original contractors. It is even possible that we might have higher direct taxes rather than an excess profits tax. . It is too soon to come to definite conclusions, but the technical , supply and demand formations of individual issues and groups are beginning to form longer term patterns as the hectic emotional period following the .. invasion of Korea is slowly being replaced by more calm and reason. . Some of the groups that were hardest hit,such as chemicals and . utilities and televisions, are beginning to show signs of reaccumulation. , hese groups appear to have reached their lows during the heavy ; liquidation of late June and mid-July. Some further time may be needed to ., ' ..broaden out the potential base patterns, but they should be bought during ','periods of technical correction. . The utilities, for issues of their quality, have reacted sharply ',from the May high of 44.39 to the July low of 37.15. The 37 level is one of very strong long term support. While these issues are not volatile market performers, they are now available on a very attractive yield basis for the longer term investor. 'August 11, 1950 EDMUND W.,TABELL WALSTON, HOFFMAN & GOODWIN This heve muemIonrtaenredutmInhlon.mote to or be '.III con,trued ,n an offar or IOlldtatlon of of the securities mentioned here1n. The offers to buy or sell u forogolng matarlal hilS y securities From time been prepllred by us to as II timmaettWeralosftonIfoHromlflffmlonn & Goodwin may only. It Is bllsed IIpon Informahon behoved telleble bllt not necessarily complete, Is not guaranteed s accurate or fll'JllI, and is not Intended to foreclose Independent inqu1ry. ,..

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Tabell’s Market Letter – August 18, 1950

Tabell’s Market Letter – August 18, 1950

Tabell's Market Letter - August 18, 1950
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r–;;'- —— – – Wolston.Hoffmon &, Goodwin' , SAN FRANCISCO, CALIF. NEW YORK, N. Y. PHILADELPHIA, PA. LOS ANGELES, CALIF. BAKERSFIELD BEVERLY HILLS EAST ORANGE, N. J. HARTFORD, CONN LONG BEACH MODESTO OAKLAND RIVERSIDE SACRAMENTO SAN DIEGO SAN JOSE EUREKA FRESNO HAGERSTOWN, MD. HARRISBURG, fA. PASADENA PlnSaURGH, fA PORTLAND, ORE SANTA ANA SEAnLE, WASH. STOCKTON' VALLEJO TABELL'S MARKET LETTER 35 WALL STREET, NEW YORK 5, N. Y Digby 4-4141 HOTEL WALDORFASTORIA PLa.. 96160 Both averages reached new highs on Friday with the industrials at 219.88 and the rails at 63.81. Both averages are now at upside resistance levels. Would favor taking trading profits and assuming a 50 liquid posi- tion on short term and intermediate term accounts. The panicky buying and hoarding of sugar, tires, nylons, and other goods that were shortage items in World War II, has fortunately subSided. It was an excellent example ofhow temporary hysteria can run directly , counter to facts and reason. The jittery portion of the public that expected a repetition of the , 1940-1945 pattern lost sight of a very important factor. Today, our economy , ' and productive capacity is much different from that of 1940. Even in the !,.i event of all-out mobilization, the impact on our economy would be relatively ' small as compared with 1940-1945. , , In 1940 we were just emerging from a ten-year depression. Our pro- i'ductivity was low. In 1939 our gross national product, the measure of the rate at which goods and services are being produced, was about 91 billion . annually. In 1940, almost 8 million people were unemployed as against 48 ' i . million working. Our plants and equipment were old and inadequate to meet ..' , the' tremendous demands of the coming war. We had no synthetic rubber plants ,i i Ino huge aircraft plants or ships. By 1942, more than 50 of our output was ., for war. Half of our food output was for military or lend-lease purposes. ' We all know what happened in the period between Pearl Harbor and 'the surrender of Germany and Japan. It was a great tribute to American in- jdustry and production. The plants and factories were built, the planes and , ships and war supplies were produced in unbelievable amounts. We not only ; i fed and equipped our own military and civilian economy, but also supplied '1 and fed our Allies, including Soviet Russia . .. ! Today, the situation is quite different from 1940. We have just .passed through ten years of prosperity and increasing production. As of , . June 30th, our gross national production was running at the fabulous rate I' of almost 270 billions. This is above the all time high reached in the ..; I j final quarter of 1948. We are turning out goods and service at a rate three I '. times greater than 1939 and twice greater than 1941. Our plants and equip- ',ment are modern and greatly enlarged. The synthetic rubber plants and the airplane factories are built. There are huge quantities of ships and equip- ment in mothballs. The steel for these items will not be needed in the vast quantities of 1940-1945. It is estimated that one-half of 1 of our present steel production is being used for defense and, in the event of all-, . out mobilization, the percentage for war would be only 10 of present outputi.'j Of course, there will be some shortages but they will be mainly in ; impol1t commodities and possibly in some of the metals. On,.the whole, the ,tremendous shortages of 1940-1945 will not exist. Production of goods i' using materials needed for defense will be cut but not as drastically as ! '.. most people imagine. For example, according to a recent estimate, automo- i' .bile production may be 5 million cars as against 8 million at present, i i' television cet production may be 4 million as against 6 million at pre, sent and refrigerators may be cut to 4 million from 6 million. There will be shortages only in relation to the amount of money I that people have to spend. As compared with 1940-1945, consumers goods and food will be in heavy supply. This leads to the conclusion that some of the stocks in the auto- mobile, refrigeration, television, air conditioning and housing fields may have been oversold in the light of the above possibility. August 18, 1950 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN This memorandum Is not to be construed as an offef or solldhltlon of offen to buy or 5811 tiny securltles, From time to time Walston, Hoffm!ln & Goodwin m!lY h!lv& an Interest In some or all of the securities mentioned herein The foregoing m!lterial hu been prep!lred by us as a matter of Information only It is bued upon Information believed renable but not necess!lrlly complete, Is not CJuerenteed !IS at';Uf!lte or fln!ll, and Is not Intended to foreclose Independent inquiry.

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Tabell’s Market Letter – August 25, 1950

Tabell’s Market Letter – August 25, 1950

Tabell's Market Letter - August 25, 1950
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—————– — — – – – – – – – – – – – – – – – – ….Walston-Hoffman &, Goodwin SAN FRANCISCO, CALIF. NEW YORK, N. Y. PHILADELPHIA, PA. LOS ANGELES, CALIF. BAKERSFielD BEVERLY HillS EAST ORANGE, N. J. HARTfORD, CONN. LONG BEACH MODESTO OAKLAND RIVERSIDE SACRAMENTO SAN DIEGO SAN JOSE EUREKA FRESNO HAGERSTOWN, MD. HARRISBURG, PA. PASADENA PITTSBURGH, PA. PORTlAND, ORE. SANTA ANA SEATTLE, WASH STOCKTON VAllEJO TABELL'S MARKET LETTER 35 WALL STREET. NEW YORK 5, N. Y. Digby 4-4141 HOTEL WALDORF.ASTORIA pu… 96860 In my letter of July 7, 1950, when the industrial average was at 208.59, I stated that The downside indications on individual issues point to the 205-195 range as the most likely area where this intermediate de- cline will bottom out. Included in this letter was a list of issues with . attractive technical patterns for long term appreciation to be purchased ; during periods of market weakness. In our next letter of July 14th, the , day after the industrial average reached its low at 195.40, I made the following comment The fact that the industrial average met support at the expected 195 level, plus the divergent action of the two averages,gives credence to the probability that the market has reached its low of the in- termediate phase. In this letter we listed a number of issues for near term trading purchases. Some of the issues in these two lists have advanced . sharply from their July 14th prices. For example, Reynolds Metals has ad- i ! vanced from 23t to a high of 32 3/8. Schenley from 34 1/8 to 41, LibbeyOwens-Ford from 59 to 76, Chicago-Milwaukee & St. Paul pfd. from 32t to 1 40 7/8, Illinois Central from 39 1/8 to 48 3/8, Missouri-Kansas-Texas,pfd. from 24 to 34, etc. I continued to maintain a constructive attitude toward the market until last week and in my last letter of August 18th said – Would favor taking trading profits and assuming a 50 liqUid position on short term and intermediate term accounts. I would continue the cautious attitude. The short term indicator gave a sell signal on Tuesday and the in- termediate term indicator is heavily overbought. I expect a retracement of one-third to two-thirds of the twenty-seven point advance from the July 13th lows. This would bring the market back into the 213-204 area. To 1. narrow it down a bit,. 212 to 208 looks like a logical buying spot. I would defer purchases until that level is reached or until the pattern indicates '1 a change. For the longer term I repeat my opinion that the averages will 'j !remain in an area bounded roughly by 230 high and 195 low — possibly a 5 leeway on either side should be given. It is entirely possIble that this ., range will hold for another year to two years. Such a market, of course, will be selective and there will be ample opportunity for capital appre- ciation if one holds the right stocks. If the averages should enter the 212-208 range, I would add to hold- ings. I am listing below a group of stocks that would appear suitable for purchase if averages reach that level BETTER GRADE .. Aluminum Company of America, Atchison,Topeka & S.F., Bethlehem Steel, Caterpillar Tractor, Columbian Carbon, Fairbanks Morse, General Elec., Ingersoll Rand, Kennecott Copper, McCrory Stores, Montgomery Ward, National Lead, Owens-Illinois-Glass, Chas. Pfizer, Stand.Oil of Calif., Stand.Oil of Indiana, Std.Oil of N.J., Union PaCifiC, Wewtern Auto Supply, Westinghouse Electric, Youngstown Sheet & Tube. MEDIUM GRADE Allied Stores, Associated Dry Goods, Bullard,Burlington Mills,Carrier, ! , .'.,; Celanese, Chain Belt, Chic.Pneumatic Tool, Chicago-Rock Island, Com- .,. .1. bustion Eng., Electric Boat, General Tire & Rubber, Hewitt Rotbins, Illinois Central, Lowenstein, Northern Pacific,Pacific Mills, Republic Steel, Schenley,A.O.Smith, So.Pacific,Sperry,Texas & Pac.,Western Pac. SPECULATIVE Amer.Airlines, Amer. & Fgn.2nd pfd.,Armco,Bohn Alum., Braniff Air., Budd, Capital Air, Chic.Great West.,Chic Ind. & Louis.A.,Chic.Mil & St.Paul pfd.,Denver & R.G., Eastern Air, Elastic Stop Nut,GoodallSaruford,Gulf,Mobile & O.,Minn & St.Louis,Minn.St.Paul& S.S.Marie, M-K-T pfd, Northwest Air,Pitts.Consol.Coal,Reynolds Metals,St.Louis- San Fran., Seaboard Airline, TWA, United Air, Western Air, Western Maryland, Western Union, Wyandotte Worsted. August 25, 1950 EDMUND W. TABELL WALSTON,HOFFMAN & GOODWIN ,'I Thb memorandum Is not to be construod as an offer or solIeltatlon of offors to buy or sell any seuritilll From time to time Walston, Hoffman & Goodwin mey heye ,an Interest In lome or !!III of the &ecurlfies mentioned herein. The foregoing material h!!ll been prepared by Ul as a matter of information only. It Is based upon Information belleyed reliable but not necessarily complete, is not guaranteed a, accutate or final, and is not Intended to foredose Independent Inquiry. .. -,,.- – ..-…… .

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