Tabell’s Market Letter – March 11, 1960
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—————————————————————————————————-. FILE CQPV W—-a–l-s-tlonnc–&–C—o-. Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFices COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER March 11, 1960 The Dow-Jones Industrial Average continued to slide this week with rallies on Wednesday and Friday failing to erase earlier losses, which carried the average to a low. More encouraging was the actlOn of the rails WhlCh finished the week above last Fric a 's close and which actually advanced on Thursday despite a decline in most of the rest of thE market. Basically, there is little or no change in the investment policy outlined by this letter for the past two months. Stocks should be bought either because they are at a low level or the trend appears upward. Either the market wlll continue to slide off, in .- – ..,. — -.-;–,;; – case selected stocks will appear to be cheap from a level point of view, or breadth and vitality will improve, m which case the k-rend will have changed from downward to upward. Until one of these two phenomena takes place, it appears wise to postpone aggressive stoc purchases. A decline such as the recent one offers an excellent chance to test the relative strength of individual issues, especially when their prices at the low point of the decline are compared with prices at a previous low. The table below does exactly this with Stand ard & Poor's group indexes, showing each index's percentage change from its September low to its February low. As can be seen, desplte the fact that the February bottom was somewhat lower than the one posted 5 months earlier, 18 out of the 62 group indexes wer higher last month, and 29, or almost half, had shown better action than the index as a whole. As we have often pomted out, in recent markets it has been far more important to own the nght stocks than to guess the action of the averages. The individual mvestor can and probably should scrutinize his own holdings very carefully, comparing their current prices to those at the September bottom. He lS ample reason for continuing to hold those stocks which v sure that there oor relative tt Electromcs 17.5 sug(;r;l – 3.1 Radio-TV 14. 8 – 3.2 – – Electrical h (\\\ \\Household Appliance 12.0 – Pipeline s – 3.4 Steel Alloy . Prmting Auto Truc w Publishmg 4.6 Office Equipmen 4.0 Metal Fabric g 3. 9 Soaps 3. 9 W..'\Jparel-3.5 t' Chemicals – 3.5 Small Loan – 4.0 Railroads – 4.3 Coal – 4.4 Machmery – 4.4 Lead & Zinc – 4. 7 Textiles – 5.6 Soft Drinks Food Broadcasting 3. 7 3. 1 3.1 Tires Distillers Finance Companies – 5. 7 – 5. 7 – 6.1 Cigarette s 3. 0 Electrlc Utilities 2.8 Carpets 1.2 Shoes Unchanged Drugs – 0.3 Mming & Smelting – Gold – O. 5 RallEquipment – 0.5 Natural Gas Distrib. – 1.1 Ship Building – 1. 2 Confectionery – 1. 3 Alrcraft – 1.5 Motion Pictures Retail – 1.5 – 1.5 COMFOSITE – 1. 8 Auto Parts Building Materials – 1. 9 – 2.3 Sulphur – 6. 3 Machine Tool – 6.9 Contamers-Paper – 7.4 Cigars – 7.8 Papers – 8.0 01113 Rayon – 8. 8 Vegetable Oil – 9.0 Agricultural Machinery -10.7 Aluminum – 11. 4 Coppers -11. 9 Automobile -12.7 Brewers Steel -13.3 -15.4 Shipping -15.9 Air Transport -20.0