© Henry Weingarten Last Updated:

Most of the following material has been serialized in WALL STREET, NEXT WEEK and our subscriber premium channels. This will next be updated in December and at our next 11th Astrology and Stock Market Seminar May 14-17, 2004 in New York City.
Note: Hyper links that are prefaced with a S: are restricted to WSNW Subscribers.                                                     

Although markets made their largest weekly rally in 20 years because of the U.S. invasion of Iraq, I do not see as rosy a scenario as I did before March 19, 2003. Instantly, our fair valuation of the US stock market dropped 500 points from 8800 to 8300; currently it is 8100, and may drop further. Our US dollar index fair value also dropped from .98 to .93 with a new P2 target of .90 and .87 respectively now possible. We consider the long term economic fall out of this action as potentially quite severe. Despite positive astro factors until May/June, we believe that markets can retest or break their 2003 lows: our new P3 target DJ year low is 6900-7200. (P1 is 7800 and P2 is 7400).

There are four primary celestial and terrestrial phenomena affecting world events and global markets in H2 2003 and 2004:

• August 30 Jupiter/Uranus Opposition,
• November 23, 2003 Total Solar Eclipse,
• Progress on the War on Terror and the 2004 US Presidential Election,
• 10 countries joining the EU in 2004.
  

Three Big Investing Ideas

1. US DOLLAR  REMAINS UNDER PRESSURE IN 2003     
Everyone knows now that the US dollar has already peaked. US Treasury Secretary John Snow shocked currency traders by stating the U.S. government no longer measures the dollar's strength by its market value against the other major currencies. Instead, Snow said "strong" refers to such aspects of the dollar as the confidence it inspires in the public and its resistance to counterfeiting. Europe's ongoing malaise and Japan's long suffering economy make it possible that we will witness competitive currency devaluations.  This trend has to date benefited secondary currencies such as the Canadian and Australian dollars as well as gold. All investors need to diversify their investments globally. The average American has less than 5% of his assets in foreign holdings. The decline in the US dollar’s value has made foreign investments more attractive. Stock prices are cheaper by most valuation measures: price to earnings, price to sales and price to book. Short term we expect interest rates to drop due to slowing economic growth. Longer term, they are likely to rise due to a lower US dollar and future inflationary worries. One lurking potential danger is that it may become necessary for the FED to defend the US dollar.
Our recommended US equity portfolios international stock allocation is at least 35%.      

2. A WAR TIME ECONOMY: GUNS AND CAVIAR REDUX

3. THE END OF THE HOUSING BUBBLE
August 1, 2002 Jupiter left the sign of Cancer [home] for Leo, the first of several astrological factors that loosened astrological underpinnings of the current real estate bubble. Housing, along with Commodities and physicals, is now viewed as an Asset Class along with Stocks, Bonds and Cash by many investors. Positively, there is the enjoyment factor: most woman would prefer to have an additional 100K in a home than in a portfolio. Housing also appeals to safety concerns in times of trouble, but home buying is cooling. Record low interest rates may end this year or next. Other negatives include the ratio of home prices to home rental rates is more than 12% too high, while the value of individually owned residential property to deposable income is at a 50 year high. Classically, the Real Estate weakens 12-24 months after a market collapse. If individual stock prices can return to pre-1998 pricing in the Fall of 2002, why can't housing drop 10-35% [depending on location and individual property] over the next 6-24 months? June 2003, Saturn enters Cancer. Let's not forget what Saturn in Gemini, e.g. Communications did to telecoms. Hopefully it will NOT be that bad: Favorable tax treatment . low interest rates, along with continuing demand could continue to help make this a slowing market with a soft instead of hard landing.  Either way, buyers will benefit more than sellers.

Global Stock markets in H2 2003 will be determined largely by answering three questions:
Q1:  How will Bush's future military adventures affect Oil prices and help or hinder the War on Terror?
Q2:  Who will be helped/hurt the most by the lower US dollar?
Q3:  What P/e's will investors be willing to pay for single digit corporate growth?

 HOW HIGH IS UP? HOW LOW IS LOW?

VALUE WITH GROWTH
Capital Preservation is again important for global investors; hence, we advise caution. Previously, we recommended an investment strategy paradigm of  BUY and HOLD Growth stocks with at least reasonable valuations based on current and future profits. Post-war, we raised recommended cash levels to our highest ever: 50%-70% until market are below 8000, at the minimum. International money flows will no longer exclusively favor the US, with Asia, Europe and even emerging markets garnering more future global  interest.  In the second half of 2003, value will no longer under perform as in the first half.

Classic "Buy and Hold" is passé: Stock picking , more than sector membership and even Market timing will rule in 2003. Successful investing will depend on knowing: 
When all the good news has already been factored into the share price, at what price is the valuation just too high? 
When all the bad news has already been factored into the share price, at what price is the valuation too cheap?

Any and all investing profits need to be protected against future bear assaults in 2003. 
Trade more (35% of  portfolio) and take/protect profits at 15%-25% profit points for long term non-core holdings.

LEARN THE LESSONS OF 2000, THEY REPEATED IN 2003 WITH EXCESSIVE SPECULATION:
1) Buy carefully and when stock valuation becomes super frothy again, SELL.
2) Be careful about owning stocks that are “priced to perfection”, they can only disappoint.
3) It is NEVER “different this time.”
4) Ultimately, profits matter.        

The Horoscope is a MAP of TIME and PLACE - here is a brief overview of selected global markets:
Country risk is re-emerging as a corollary to anti-globalization forces.  Sophisticated investors today are rightly concerned about being overly invested in any one country.

EUROPE - A stronger global alternative to the US         

• GERMANY- Market perform. 
• HOLLAND - Market perform.
• ENGLAND - We no late rate the CITY an outperform, given future fall out from Iraq.
• FRANCE -  France could modestly outperform.
  
• GREECE - The ATG is a potential trading accumulation ahead of the 2004 Olympics.
• EU EXPANSION countries, the Czech Republic, Poland, Hungary, Cyprus, Slovenia, Latvia, Lithuania and Estonia remain on Watch as they are likely to compete inside the EU's single market from 2004 on. However, there is little for foreign investors to buy outside of the banks. In the non-financial area, many of the best companies are likely to be bought out, rather than going public. Finally, shares prices there already reflect European entry which means the "easy" money has already been made long ago.
  
Note: WSNW subscribers can review our favorite S: Dow Jones Stoxx 50 stocks.             

NORTH AMERICA - Traders paradise

• S: CANADA - While a surprise to many "experts" that Canada lead the G7 economies once again, the news is old. While recently downgraded by us to market perform, the Loonie is no longer undervalued and this may begin to bite some of its export driven economy.  
• S: MEXICO - In past years we recommended only stocks that clearly benefit from NAFTA, were in a favored sector like entertainment (TV) or likely to be a takeover target like Banacci was by Citibank, AHISA by MetLife or Bital by HSBC. Then we looked to sources of domestic strength such as COCA-COLA FEMSA (KOF). Now, however, we are less interested. I would just consider potential take over targets sporting reasonable valuations or companies that can compete in the US for the rising Hispanic consumer market share.  
• UNITED STATES - Still overvalued versus global counterparts. Many former investor favorites will disappoint as investors sell rallies to "get even". US Bonds are far less attractive Euro Bonds, especially after Q2. The US Dollar remains a potential time bomb: It is no longer as safe a haven given budget deficits and the War on Terror. However, since one can trade stocks here for 10-25% appreciation/depreciation a day/week, this remains TRADERS HEAVEN. 
  

• S: JAPAN - It is important to realize that there a recovery in the Japanese economy coming soon. We expect to see a REAL resolution of their long term banking crisis within a year! Both the government and cash rich companies  plan to buy market shares. Therefore, we see the Nikkei is a long term buy to 12,000+ using the 2004-5 time horizon. We see currency value in buying Japan should the Yen be weaker than 130 [Fair value ~122].  Profitable exporters such as Sony (SNE),  Matsushita (MC) and Honda (HMC) will be challenged whenever the a Yen stronger than 118, while even more profitable if the Yen weakens again  to 130 and more. Whatever the Yen's value, we believe domestic industries are no longer to be shunned. JAPAN INC. [EWJ] is one of our two favorite 2004 country buys especially by Q4 2003.  Our mantra on JAPAN INC. is "You have Japanese products in your home; why don't you have Japanese stocks in your portfolio?"
• HONG KONG/CHINA - Foreign investment in China is at an all-time high. Before SARS, China was likely to become the biggest recipient of direct overseas investment worldwide. That and the 2008 Olympics notwithstanding, the fact is that many of the mainland's industries are a mess and its stock market is overloaded with poor quality state owned companies. "Officially" China's economy continues to grow 8% and will be the third largest economy in the world before 2020, after the US and Euroland. Yet its public debt is over 100% GDP if you include "off-balance sheet" accounting. Non-performing loans held by China's banks are also estimated to be 25%-to-50% of GDP making China highly vulnerable to an economic downturn. SARS Crisis Takes Swipe at China could be the trigger.
  Until this is rightly addressed and Chinese leaders make dramatic moves to reform the country's financial system, we continue to recommend great caution. At the minimum I would expect the merger of A and B share markets and most important, the move to float the Chinese currency.
  Hong Kong also remain unattractive, especially as fundamentals often seem to matter little on the Hang Seng, and its stock market acts as close to legalized gambling more than any other major one in the world. For Asian investors (only), we recommend it for accumulation under 9200. On the bright side,  Hong Kong benefits from a spill-over effect from Chinese mainland's trade. The weakening US dollar also is another favorable factor for Hong Kong's export growth. The major upcoming positive for Hong Kong is China’s qualified domestic institutional investors (QDII) scheme. When approved, this will allow mainland Chinese residents to invest in the territory adding considering liquidity.
   Despite a far better economy, we also remain reluctant to invest in Taiwanese markets unless compensated for potential "war like" conditions in the future.
• KOREA - We continue to like blue chip giants Korea Telecomm (KT) and Samsung Electronics (SSNGF). A MAJOR peace dividend is expected later this year or in 2004.  Like Taiwan, this is a largely a bet on the US technology sector.
• INDIA - Global investors are beginning to warm to computer and  pharmaceutical blue chips.  IIF or IFN are two closed end India funds, and the best way for US investors to invest (not trade) in India. This is for long term investors into 2004.
• AUSTRALIA - We remain mildly bullish for 2003 given our correct forecast for an appreciating Aussie $. We maintain our "out perform" rating country rating but previously downgraded their LPTs (Listed Property Trusts) to market perform.
• NEW ZEALAND- Billionaire investor George Soros is backing the New Zealand dollar - currently at five-year highs - to strengthen further against the stubbornly flaccid US greenback. I am not so sure. However if you wish to retire in this lovely country, note the NZ 40 has strong long term support around 1900.  
• OTHER TIGERS AND DRAGONS - Between SARS and future terrorism threats, we would avoid for the time being any sizable investments in Thailand, Malaysia, and especially Indonesia and the Philippines.
  

OTHER- Opportunities for savvy investors ONLY .

• S: ISRAEL - Israel's technology sector is desirable given its highly skilled labor force and favorable tax treatment. Unfortunately, it is best to buy only when there is blood in the streets, which is now all too often. Buy export quality with the TA 100 Index under 365. The Iraqi war was cause for one rally. From mid to late 2003 on, this market could enjoy more than one tradable peace dividend rallies.
• RUSSIA - Many high risk investors primarily bet on the energy sector here, e.g. OGZPF, SBKYY, SGTZY, TNK and YUKOS. Now investors are motivated to buy further a field. Still, after a healthy double in 2002, due to positive economic performance and more rule of law, some caution is advised.
• S: BRAZIL - Assuming Lulu keeps his economic promises there is plenty of opportunity, especially for quality exporters such as CVRD thanks to the cheap, but stable Reais currency. As with most of South America, accumulate on weakness only for appropriate multi-year long term investment portfolios.
• S: LATIN AMERICA - A short term trading opportunity for smart money and longer term for multi-national corporate investments.

We continue to recommend caution for emerging markets unless you monitor them very closely. It is very important for investors to distinguish between high and low risk countries in emerging markets.
Later in 2003, the global investing landscape may be dramatically different.
WSNW subscribers should periodically review our S: AFUND GLOBAL 12 - for our favorite global blue chip long term investments.

VALUE plus GROWTH IS BEST and Trade for short term profit 15-25% moves.
           

• Our pre-war forecast: "We WILL have a slow economic recovery into 2003. However, public enthusiasm to spend, spend, spend will be subdued until job uncertainty is removed. Consumers are still in a financially weak position with little pent-up demand.  Our GDP forecast is just under 3% in H1 2003."  We have sadly revised this forecast to a bearish scenario that began March 19, 2003. A question remains whether the US entered a recession or worse.
• The bottom line: Our advice to individuals and businesses is to increase cash flow (profits/income - expenses) 10% this year and 10% next year.
  

INTERMEDIATE TERM

LONGER TERM

2005: The fifth year of decade has been positive since 1881.  We see no reason at this moment to disagree with history.

March 29, 2006 is a Total Solar Eclipse.

December 2007: Jupiter will be conjunct Pluto.

The low point of the nodal cycle is reached in 2008 and Pluto ingresses into Capricorn.. 

Jupiter conjunct Neptune in 2009.

The next epic shifting planetary configurations in 2010/2011 of Jupiter conjunct Uranus AND Jupiter opposition Saturn as well as Uranus entering Aires and Neptune enters Pisces ALL preceding the December 21, 2012 Mayan end date.

• S: Healthcare and Biotechs
• Employment & Career Development
• Entertainment and S: Media.
  
• Life Essentials: Energy, Food, Shelter and Water 
• Nanotechnology (2004/2005)
  

• US health care expenses will total $1.5 trillion this year, or more than 14% of the total U.S. economy. This is more than Americans spend on food, housing, or automobiles. We expect major political fireworks into the 2004 election over this issue.  Our  favorite US drug stocks are Johnson and Johnson (JNJ) and India's generic-drug makers Dr. Reddy's Laboratories (RDY) and RANBAXY LABS (RBXLF). Uranus which entered Pisces in March which helps Biotechs. The best biotechs to buy are those with revenue generating products increasingly close to launch. The easiest way to play this sector is to either market the market leader Amgen (AMGN) or to buy a basket of 20 with the Merrill Lynch Biotech HOLDRS (BBH). We recommend rebuying 90-95.  Healthcare, especially for retiring babyboomers, will receive more attention and money as time goes by, e.g. Sunrise Assisted Living (SRZ). Finally, more traditional SRI favorites such as Herbs, Natural Foods, Vitamins and Natural Healing Therapies will continue to grow market share. 
• Given the "jobless recovery" as well as Jupiter in Virgo, temporary employment agencies plus vocational training schools stand to benefit.  Four favorites on future watch are: Manpower (Man) and Teamstaff (TSTF) to ITT Education (ESI) and Apollo (APOL),
  
• While Jupiter leaves Leo, as times get tougher, people cut back, they still will desire entertainment. Therefore we will periodically trading buy select Media stocks, e.g. AOL and Yahoo (YHOO) and cultivate long term investments in growing brands such as the New York Times (NYT). Fundamentally the fact that FCC is overhauling media ownership rules in the US will lead to a wave of buying and selling of media properties. Always profitable, dividend paying [6%], Cedar Fair (FUN) amusement park is a good excuse to research your investments.
• In future, we hope to see SRI favorite Fuel Cell, Solar and Wind companies such as Denmark's Vesta and Spain's Gamesa as suitable intermediate term SRI investments. Many natural food companies shares are expensive, e.g. Hain Celestial (HAIN) and Whole Foods (WFMI), but should be considered when their share pricing again intersects with reality. As for shelter, most of our money in this sector is long term invested in our client International Hi-Tech Industries.  The number three and fastest growing beverage is Water. The United Nations has declared 2003 as the International Year of Fresh Water. North American bottled water is projected to grow 20% annually for the next five years. Big Euro food groups, Dannone [DA] and Nestle [NSRGY], own the largest brands and  remain conservatively profitable.  German RWE and French SUEZ and VE for serious water works. American Stat Water (AWR) is a good domestic alternative in conservative portfolios.  
• Nanotechnology investments are largely venture capital plays or early stage R & D developments. However, the hype will grow shortly, if not the reality. We will cover sector more in our 2004 report.

I like to begin with one or more of the following 4 criteria:

     1) Jupiter in Virgo
     2) Jupiter Opposite Uranus

Our recent favorite trading strategy has been buying pre and post news pops due to companies slightly outperforming repeated earnings downgrades. Winter/Spring 2003's  favorite strategy was buying quality momentum stocks for short term positional trading. Over the next few months, we are not buying, or will be shorting Nasdaq internut-like fantasies. I also recommend more experienced investors consider a market neutral investment strategy: Buying a strong stock while shorting an appropriate index (SPX or Nasdaq), or Pairs Trading - buying a strong company and selling a weak one in the same sector usually makes money whether the market moves up, down or sideways.

1.  The US dollar may fall more, select Country I-Shares or Foreign Blue Chip companies to hedge:

• Japan (EWJ): - Honda (HMC), Matsushita (MC), Sharp (SHCAY) and Sony (SNE).
• Korea (EWY), India (IFN) and Gold are other recommended US dollar hedges.
  
• S: AFUND GLOBAL 12                              

3. S: DJIA FAVORITE 2003 stocks, IBM and Johnson and Johnson (JNJ), while sold, will be the first to be rebought for long term buy and hold investment portfolio allocations  Most Blue Chip stocks, however, have to be traded, not "buy and  held" for better than 12% returns in 2003. We would look to buy in H2 on good price points/times: American Express (AXP),  Hewlett-Packard (HPQ), and United Technology (UTX).                

• Microsoft (MSFT), while a cash machine, is both over valued and not well managed. We continue to advise selling on strength.
• A downgrade of HD from outperform to market weight was made given Saturn's upcoming entry into Cancer.  
  

APPLIED  ROBOTICS: e.g. Int. Hi-Tech Industries (IHITF)*  and ?   
BIOTECHNOLOGY: e.g. BBH, IBB or Amgen (AMGN) are trading buys on strong pullbacks.          
SUCCESSOR ENERGY: e.g. Vestas and Gamesa.
NANOTECHNOLOGY: ?  

*6. AFUND CLIENTS
Business Astrologers know that the best way to predict the future is to create it.
With strong Disclaimers and with an informed but obviously biased view, I am doing my best to help create investor wealth for client companies we now consult for especially International High Tech Industries [IHITF].