AFUND MAY 2004 Stock Market Forecast
2004/2005 MARKET FORECASTS
It is NOT WHAT
you know, but WHEN you
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WILL US POLICY PREVENT A JAPANESE OUTCOME OR
JUST DELAY IT?
HOW LONG WILL ENERGY PRICES STAY HIGH?
WILL THE US DOLLAR FIGHT BACK OR TAKE
While the internal Stock Market astrology,
as in 2003, is mixed, the external risk potential is
Short term, If you were unhappy about markets March
2000 and September 2001, don't expect to be singing in the rain JUNE
Long Term, we consider the long term economic fall out
of the US Iraq invasion quite severe and believe
that global markets can retest or break their 2003 lows.
It is only a matter of time before more and more savvy international
investors move more of their money out of the US stock market
and invest in countries that they feel are in better shape than the
Stock selection continues to be paramount and count more than sector rotation;
it is as important as market timing!
Given that the
traditional "Buy and Hold" investing
strategy will continue to under
perform, we again recommend trading 50%
in "investing" portfolios in 2004.
TAKE/PROTECT PROFITS CONTINUOUSLY.
For 3 years
LEARN THE MARKET LESSONS
OF 2000, BECAUSE THEY WILL REPEAT
IN 2003 and 2004.
Now that the forecast is true, come June 2004,
many investors will be berating themselves with
why didn't they sell when the Nasdaq was above 2000?
Why didn't they learn their lesson in March 2000?
DON'T BUY AND HOLD. THE STOCK MARKET
IS LIVING ON BORROWED TIME. I ADVISE KEEPING
A BALANCED AND DIVERSIFIED PORTFOLIO, ELIMINATE
ALL MARGIN DEBT AND BE CASH RICH.
MARKET NEUTRAL INVESTING FOR EXPERIENCED INVESTORS
In order to sleep soundly at night, I
recommend a Hedge Fund style Market Neutral
Strategy in 2004. This involves both buying under
valued and selling short overvalued stocks. This
is best done in industry pairs as it involves the smallest
risk, although the most work. Alternately, stocks
can be hedged against their individual sector membership
or the overall market: Buying a stock and selling its sector
or broad market index, or Selling a stock and buying its sector
index or the overall market.
If you are bullish, I would recommend
a long/short ratio of 2-1.
If you incline more to the bearish camp
as I do, then a long/short ratio of 1-1 and 1-2
(depending on the short term astrological trend) is preferable.
There are five primary celestial and terrestrial phenomena affecting world
events and global markets in
- October 13, 2004 Solar Eclipse;
Total Lunar Eclipse October 28, 2004,
- Saturn in
Cancer and Uranus in Pisces,
- The World War on Terror and
- 10 countries joining the EU
- The 2004
US Presidential Election.
Big Investing Ideas
1. US DOLLAR REMAINS UNDER PRESSURE IN 2004
Will the dollar stabilize, weaken
or strengthen going forward? Short term, US dollar has strengthened
since falling over 40% against the Euro since late 2001 when we
began to forecast a major Dollar reversal. Unfortunately, for Americans,
this is an intermediate, but not long term trend reversal. Before year
end, with US and Euro interest rates closer to par, the dollar will have
resumed its secular decline. We therefore continue to recommend that
All investors need to diversify their investments
globally. Many blue chip foreign investments are more
attractive with stock prices cheaper by most valuation measures:
price to earnings, price to sales and price to
book. US interest rates will rise not only for future
inflationary worries but also due to a lower
US dollar. Our US dollar Index Fair Value is 88
with .85 to .82 again possible in H2 2004. One lurking
possibility is that it may become necessary
for the FED to defend the US dollar or that
outright intervention from the US Treasury in the currency markets
may be necessary. However, Spring and Summer 2004, we could also see
the US dollar as high as .93 to .95. If so, this would be a MAJOR
sell signal for us. This will reverse either if the US changes its
economic policies (unlikely before November), or the US dollar is trading
below .85 with stability, i.e. .80-82 support seems likely to hold.
US equity portfolios international
stock allocation remains 50%.
2. A WAR TIME ECONOMY: GUNS AND CAVIAR REDUX
- Bush's Progressed
Mars (War) was increasingly
prominent in 2003 = an expansion
on the war on terror. Saturn
is also transiting the US Sun and partile
(exact) in June 2004. As Saturn represents "reality",
paying the piper is not likely to be overly
favorable for US markets, given the
US budget deficit from a weakened economy, the
War on Terrorism and Tax Cuts. The violence level
on the War on Terrorism, unfortunately, is likely
to increase in 2004 given prominent Mars aspects
in both Bush's and the USA horoscopes. It is possible
this could be US global trade war(s), instead of a new/expanded
hot shooting war on terror then. Homeland (Cancer) security
(Saturn), defense (Mars) and insurance will garner
even more public attention. As this will take money away from
more productive areas of the economy, we are far from bullish.
- Fears of deflation and interest
rate cuts left US and UK government bond
yields at multi-decade lows in H1 2004.
Both suffer, however, from a sharp
increase in supply, the former more so due to
massive tax cuts underway as well as military adventures
and increased defense spending. Now we are seeing
the beginning of a very nasty bear market in bonds that we
forecast. TIPS (Treasury Inflation Protection
Securities) can offer some protection.
3. THE END OF THE HOUSING BUBBLE
Housing, along with Commodities and physicals
can be 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 have ended.
Other negatives include the fact that the ratio of
home prices to home rental rates is too high, while
the value of individually owned residential
property to disposable income is at a 50 year high.
Classically, Real Estate weakens 12-24 months
after a market collapse. Thanks to the Fed, this did not
happen when individual stock prices returned to pre-1998
pricing. I still see the probability of a
housing drop of 10-35% [depending on location and
individual property] over the next 6-18 months.
Still, Saturn will be in Cancer (Housing) for another year. Let's
not forget what Saturn in Gemini (Communications)
did to Telecoms. Hopefully it will NOT be
that bad: Favorable tax treatment, along with continuing
demand, could make this a slowing market with
a soft instead of hard landing before July 2005 when Saturn
leaves Cancer [home] for Leo. Either way, buyers
will benefit more than sellers.
In 2004, property prices in Australia, the US, the UK, Ireland, the
Netherlands and Spain are at very high levels. They have risen exorbitantly
in relation to average income. It could be said [The Economist]
that house prices are over-valued by up to 33% as low interest rates
have allowed more and more people to borrow large amounts to buy a
home or investment property. The Bank for International Settlements
(BIS) is concerned about this situation. Its researchers have found that
historically, the bigger the boom in house prices, the bigger the bust.
Central bankers are as likely to be concerned about this as financial
astrologers. Saturn in Cancer (home) suggests it is more than past time
to begin (accelerate) reducing exposure to the still booming housing sector.
Global Stock markets in 2004 will be
determined largely by answering three
How will Bush's military adventures
affect Oil prices and help
or hinder the War on Terror?
will be helped/hurt the most
by the lower/higher US dollar?
Q3: What P/e's will investors
be willing to pay for modest
WILD CARDS: Range from FASB rules to expensing options
(strong NASDAQ hit 44% reduction) to allowing partial privatization
of social security (a bond hit/market bonus).
HOW HIGH IS UP? HOW LOW IS LOW?
VALUE WITH GROWTH
again most important
for global investors; hence,
we stress caution. We no longer recommend
an investment strategy
paradigm of BUY and HOLD
Growth stocks with at least reasonable
valuations based on current
and future profits. Market timing will be the key.
Classic "Buy and Hold" is passé: Stock picking, more than
sector membership, will
rule in 2004. 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
When all the bad news
has already been factored
into the share price, at
what price is the valuation too
Any and all investing profits need to be protected against
future bear assaults in 2004.
Trade more (50%
of portfolio) and
take/protect profits at 10%-20%
profit points for long term non-core
LEARN THE LESSONS OF 2000, THEY REPEATED IN 2003 AND 2004 WITH EXCESSIVE
INVESTORS SHOULD BUY
AND HOLD STOCKS IN 2004
1) Buy carefully and
when stock valuation becomes
super frothy again, SELL.
Be careful about owning stocks
that are “priced to perfection”,
they can only disappoint.
It is NEVER “different this time.”
Ultimately, profits matter.
Profitable, well managed companies,
2) P/E* under 18 for Growth
and under 14 for Value.
3) A PEG <1.4, or undervalued by 10%
or more, or dividend yields of 5% or more.
*After allowing for
pension liabilities and expensing
I GLOBAL INVESTING
BUY JAPAN AND CANADA FALL 2004
THE UNITED STATES
HOLD SAFETY: BERMUDA, LUXEMBOURG, SWITZERLAND
The Horoscope is a MAP of TIME and PLACE - here is a brief overview of
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 or currency.
EUROPE - A global
to the US
On a global basis, Europe is cheaper and more reasonably
valued than the US. We are buyers of Euro's 116 to 117.50 and sellers
above 126. Our Fair value is currently 121.50.
- Market Out Perform Q3 2004.
ENGLAND - The City will Out Perform
Wall Street largely due to outperformance of the British Pound.
- LUXEMBOURG- Hold Safety:
The worst is over.
Note: WSNW subscribers
can review our favorite
Jones Stoxx 50
- Traders paradise
correctly forecast Canada would no longer
lead the G7 economies last year and downgraded
it to market perform. The Loonie was no longer undervalued
and this affected some of its export driven economy.
In 2003, its economy was pummeled by SARS, the Iraqi
war, the mad-cow scare, the Aug. 14 blackout, a stronger
Loonie and weaker US economy at the beginning of the
year. A strong loonie early 2004 hurt export-oriented
industries such as forestry and manufacturing. Fortunately
for Canada lovers such as yours truly, 2005 will
be stellar for Canada beginning almost immediately
after the US presidential elections. In 2005, the loonie
will approach .80.
- S: MEXICO
- Mexico sends 90% of its exports to the United States and
its fortunes are increasingly tied to its northern NAFTA neighbor.
In 2004, I look to potential take over targets
sporting reasonable valuations or companies that
can compete in the US for the rising Hispanic
consumer market share. I hope its December 2003
record low currency and record high stock market (in pesos) is NOT
the future of its northern neighbor.
UNITED STATES - Still
overvalued versus global
counterparts. Our current Dow Fair Value is only
8400. Many former investor
favorites will disappoint as
investors sell rallies to "get even".
US Bonds are by and large unattractive
except for Treasury Inflation
Protected Securities or a similar
alternative I Bonds.
The US Dollar remains
a potential time bomb: It is no longer as
safe a haven given budget deficits and the
War on Terror. Positively, thanks to the weaker US dollar,
intermediate term, select US exporters have out performed.
Additionally, more American firms will become
take over targets, e.g. Henkel buying Dial. Dial Given one
can trade stocks here for 10-25% appreciation/depreciation
a day/week, this remains
term investment opportunities
Long term, China and Asia
could be the fastest growing area
in the world 2010-2030. It is only
a matter of time before Asia is no longer so dependent
upon American consumer markets to thrive.
- S: JAPAN
- As forecast,
there has been a recovery in the
Japanese economy and the Nikkei reached our
12,000+ price target. Our mantra on JAPAN INC.
is "You have Japanese products
in your home; why don't you have Japanese
stocks in your portfolio?" Accordingly, we would
rebuy Japan after any strong global stock market drop.
- HONG KONG/CHINA
- Capital continues to pour into China
to take advantage of low productions costs.
terms of potential, there
is no country like China with its 1.3 billion people
and high annual rate of economic growth. This has been the
well spun story that everyone and his grandmother has been
buying. However, there is increasing concern that China may be overheating.
That and the 2008 Olympics not withstanding, too
many of the mainland's industries
are a mess and its stock market is overloaded
with poor quality state owned companies.
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. On the plus side, sooner, rather
than later, the Yuan is going UP, whether a free float or
just a one time appreciation. China will be the third
largest economy in the world in 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 25% to 50% of GDP making
China highly vulnerable to an economic downturn.
China's banks have 4.14 trillion Yuan ($500 billion) of bad
loans, or more than the total at lenders in Japan, whose $4.6
trillion economy is almost four times larger. Nursing the banking
sector back to health before foreign banks get unfettered access
to China in 2006 is critical to maintaining China's rapid economic
growth. I prefer to wait and buy AFTER the collapse of a
big bank or two, given my predilection for sound sleep. Hong
Kong is not particularly attractive, especially
as fundamentals often seem to
matter little on the Hang Seng, and
its stock market acts closer to legalized gambling
than any other major one in the world. On the bright
side, Hong Kong benefits from a spill-over effect
from Chinese mainland's trade. As for buying directly
on the Shanghai and Shenzhen stock exchanges good luck or should
I say "good connections matter! 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), LG Electronics and
Samsung Electronics (SSNGF).
We expect a MAJOR peace dividend
in 2004/2005. Like Taiwan,
this is a largely a bet on the US technology
- The story is now much bigger than just
computer and pharmaceutical
blue chips. Growth of 7.5%+ is likely to make India the world's
fastest growing economy after China. Global investors have
finally noticed the giant sucking sound of thousands
of US and UK jobs being outsourced to India. Goldman
Sachs predicts that India will be the third largest
economy by 2035. IIF or IFN are two closed
end India funds, and the best way for
US investors to invest (not trade) in India.
As the May election could be a setback for Indian reformers, fresh investments
should have a multi-year horizon.
- AUSTRALASIA - We remain
mildly bullish for H2 2004 given
our forecast for a stronger Aussie
$ and maintain our "out perform" rating country
rating. Note: The A$ reached our .80 target early in 2004 and
we recommend selling. Now hovering below .70, we strongly recommend rebuying
to .76/.80 and hold cash at 5% interest.
- OTHER TIGERS AND
DRAGONS - After SARS in 2003 and future
terrorism threats, we continue to avoid for the
time being any sizable investments in Thailand,
Malaysia, and especially Indonesia and the Philippines.
for savvy investors
- BERMUDA - Bank of Bermuda (BBDA),
LOM (Holdings) [LOM:BH] and RenaissanceRe
- 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
happens all too often. Happily, we see the possibility
that this market could enjoy another tradable
peace dividend rally ahead.
- S: LATIN
AMERICA - Accumulate
on weakness only for appropriate
multi-year long term investment
portfolios and longer term for
multi-national corporate investments.
We continue to advise caution for emerging
markets unless you monitor
them very closely. They "behave like rich-country
ones on speed, both up and down". It is very important for investors
to distinguish between high and low risk countries.
In addition to the obvious political and currency risk, many are
too loosely regulated.
Current AFUND ratings on the BIG Four
Emerging Markets are: Brazil (Watch), China
(Wait), India (Hold) and Russia (Watch). Later
in 2004, the global investing
landscape may be dramatically
WSNW subscribers should periodically
S: AFUND GLOBAL 12
- for our favorite
global blue chip long term investments.
Traders believe that
"Making money in the
market is all about Timing".
The "Buy And Hold" climate
we used to have in the US stock market
is long PAST HISTORY. Since 2000,
it has become a "Market Timing"
and “Stock Picking” environment.
Markets reward best stocks
that have Value AND Growth. Corporate
profits for more well managed and sufficiently
capitalized companies should rise
modestly, helped by the low interest rates.
Despite the fact
that we do live in interesting times,
short term we repeat last
VALUE plus GROWTH is BEST
and Trade for
short term profit 10-20% moves.
May 17 is the 212th birthday of the New York Stock Exchange and not surprisingly,
sports a prominent Venus. Hence interest rates will be paramount to intermediate
term market performance as all market watchers already know. But do
they know that both Venus and Neptune will be turning SR-stationary retrograde
that day as well? Venus will then be changing direction on June 29-
“coincidentally” at the next FOMC meeting, while Neptune will leave markets
confused until the end of October. “ We expect to see a very tough summer,
with June 2004 perhaps as memorable as March 2000 and September 2001.
There may be a "surprising" strong September UP election
- Public enthusiasm
to spend, spend, spend will
be subdued as the US job market continues to
go through structural changes and more better paying
jobs are exported to China and India. Consumers
will be in a financially weak position with
little pent-up demand. 2004 will bring a rise in interest
rates that is likely to dampen consumer willingness to spend
and borrow. If/when the US housing markets corrects,
the question will be whether the US enters a recession
or worse. The bottom line: Our advice to individuals
and businesses is to increase cash flow (profits/income
- expenses) by 10% next year.
Stock markets will benefit less from low
interest rates. Saturn transiting
the Sun of President Bush and the USA Independence
Horoscope cosmically demands "paying the
piper". Uranus reentered Pisces in late December
2003, which refavors the biotech industry innovation
over the next couple of years. Jupiter leaves Virgo
and enters Libra September 24, 2004. This plus medical electioneering
will change profitability models for many companies in
the health care industry. Q4 2004, we expect M&A
activity to accelerate in the Financial sector. Not only
such sectors as the fashion industry will benefit H2 2004
from Jupiter's move into Libra, but also the art world. Blue
Chip Art (brand name artists or works from important collections)
will out perform. Collectors can not only have the usual champagne
fun buying art, but will feel confident they can always put
something back at auction at a later date and won't lose out or make
a lot more. We also expect barter to greatly expand, both for individuals
One key astrological event for the US is Pluto opposite the
US Mars in May and November. This is likely to intensify (Pluto) conflicts
(Mars opposition) and we unfortunately will remain
a nation at war. The 3 biggest outer planet aspects: Jupiter
Square Pluto (8/6), Jupiter 135 Neptune (9/15) and Jupiter
trine Neptune (11/29) are quite brief in duration and intensity
and may have little market influence outside of the energy and
financial sectors. Of considerable consequence may be the pre-US
election Solar Eclipse of October 13, 2004 and a Total Lunar Eclipse
October 28, 2004.
2005: The fifth year of each decade has been positive since 1881.
see no reason at this moment to disagree
29, 2006 is a Total Solar Eclipse.
In 2006 Jupiter squares Neptune 1/28, 3/16
and 9/24. Also we have the first pass of Saturn opposite Neptune 8/31
and again in 2007 (2/28) and 6/25).
2007: Jupiter Square Uranus: 1/22, 5/11, 10/9 and then in December 2007:
be conjunct Pluto. Two Total Lunar Eclipses March
03 and August 28, 2007.
The low point of the nodal cycle is reached in 2008,
when Pluto ingresses into Capricorn with one
Total Lunar Eclipse February 21 and a Total Solar Eclipse over China 8/1/2008.
Jupiter conjunct Neptune in 2009:
12/21. Total Solar Eclipse July 22, 2009 (India/China).
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
and a total Solar Eclipse July 11, 2010 and a Total Lunar
Eclipse December 21, 2010. ALL precede the
December 21, 2012 Mayan end date.
Also we have 7, yes 7 Uranus-Pluto squares from
June 24, 2012-March 17, 2015--Wowie! Some of the
more extreme forecasts made for this time period include
alien visitations/invasions, catastrophic asteroid impacts,
violent volcanic eruptions and massive earthquakes. We
will give our views here no later than 12/21/2009.
based investing, while no longer
based approaches to global
investing, still is very important.
future themes are:
Energy, Nanotechnology/Robotics and
The themes of Technology,
and Health Care continue
please note we update our
coverage on the following industry
sectors on our premium Silver
S: HEALTH CARE,
S: REITS and S: Leisure.
Our 2004 favorite
sector themes are:
Biotechs, S: Healthcare
- Employment & Career Development
- Beauty: Cosmetics, Fashion & Jewelry
- Homeland Security
- Insurance & Law
- Life Essentials: Energy, Food,
Shelter and Water
- S: Precious
- 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 and we are downgrading
this sector ahead of Jupiter's exit from Virgo in late
September 2004. Uranus re-entered Pisces in late December
2003, which is helping 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). Long term
investors should look for companies that will benefit
from the increasing baby boomer aging population: a
baby boomer becomes a senior citizen every 7.5 seconds!
Healthcare, especially for retiring babyboomers,
will receive more attention and money as time
goes by, e.g. Sunrise Assisted Living (SRZ) and Lifeline
Systems (LIFE). These range from assisted living communities,
to laboratory testing companies to companies that provide
orthopedic care and dental products. Drug companies
such as Novartis (NVS), but especially generic ones such
as Israeli Teva Pharmaceutical (TEVA), the largest producer
of generic drugs in the world , and India's generic drug makers
Dr. Reddy's Laboratories (RDY) and RANBAXY LABS (RBXLF) will
benefit. Perhaps most important, and certainly closer to my
heart and soul are traditional SRI favorites such as Herbs,
Natural Foods, Vitamins and Natural Healing Therapies
which will continue to grow market share as Cultural Creatives
age. Personal care companies Church and Dwight (CWD) and
global giant Unilever (UL) are safe and boring
buys, but along with many natural food companies shares,
are expensive, e.g. Hain Celestial (HAIN),
NBTY (NTY) and Whole Foods (WFMI). They should be considered
when their share pricing again intersects with reality
as demand for health foods and sustainable practices as part
of a healthy lifestyle will fortunately continue to grow.
Alternately, small caps such as Afund client Health Sciences (HESG),
while risky, are cheaper and may be worth a look.
turning to temps. We will not comment
on the obvious longer term social implications
of lower wages, lesser benefits and job
security. Instead, I will note how this trend
is likely to benefit employment agencies.
While Jupiter is in Virgo, temporary employment
agencies plus vocational training schools
stand to benefit. Four favorites to watch
and trading buy after weakness are: Manpower (Man) and
Teamstaff (TSTF) plus Apollo (APOL), Career Education
(CECO) and ITT Education (ESI).
- Jupiter moving into Libra will bring investing
in art back into fashion as an alternative to
the equity markets. This will obviously help revive
the fortunes of the likes of Sotheby’s (BID). We likewise
give out perform rating to Ann Taylor Stores (ANN), Tiffany
(TIF) and Shiseido (SSDOY). Elizabeth Arden (RDEN), Helen
of Troy (HELE), British health and beauty retailer Boots (BOOT.L),
China small cap LJ International (JADE), and luxury French retailing
giant LVMH may also out perform for the same astrological reasons..
- It is
hard to find a more apt astrological translation for
Saturn (security) in Cancer (Home) than homeland
security. Being SRI inclined, there is not too much
I wish to hold in this sector. Some possibilities include
Kroll (KROL), London based Securior (LSE:SCR), Ceradyne (CRDN) manufacturer
of lightweight-ceramic armor vests for military personnel and microcap
Command Security Corporation (CMMD).
- Our favored financial sector for 2004
is Insurance over Banking and Brokerage, given
our forecasts for both higher interest rates and
the specter of a stock market decline. Since 911, more
Americans see value in having insurance. Even though industry
pricing power is beginning to wane, throughout the world,
governments and private companies will also have to
spend a lot more on insurance. Our four favorite North
American insurers are: AFLAC (AFL), Allstate (ALL), Metropolitan
Life ( MET) and SunLife (SLF). Our five favorite foreign
insurers are Aegon (AEG), AXA, Legal & General Group (LGGNY),
RenaissanceRe Holdings (RNR) and Swiss Re (SWCEF). Given
that one astrological rulership of Libra is Law, the legal profession
should prosper and remain a growth industry into 2005. One potential
beneficiary is LECG (XPRT), which provides experts and consultants
for trials and legislative lobbying.
- In future, we hope to see SRI
favorite Fuel Cell, Solar and Wind companies
as suitable intermediate term SRI
investments. One reasonable long term play seems to Fuel
cell supplier Quantum TechnoTechnologies (QTWW) 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, which is forecast to grow 50% over the next five years.
more than double in the past five years. Growth has been spectacular in
a number of countries, with bottled water fast becoming the norm for in
home and on the move hydration. Big Euro food
groups, Dannone [DA] and Nestle [NSRGF],
own the largest brands and
remain conservatively profitable. The demand
for providing clean water and cleaning dirty water when that use is done
is surging. German RWE and French SUEZ are serious
global players, while American Stat Water (AWR),
Pentair (PNR) and Aqua America (PSC) are good alternative domestic
choices in conservative portfolios. Treatment
stocks Calgon (CCC) and Ionics (ION) are safe long term
- The Nanotechnology
Research and Development Act authorizes $3.7 billion
in federal funds for nanotechnology, the science of building
new prducts and devices by manipulating molecules and atoms.
Today, most Nanotechnology investments are
largely venture capital plays or early
stage R & D developments. However, the hype
will grow, if not the reality. The prefix "Nano"
in a company name will have a similiar effect to the suffix ".com"
- The cheapest
long term protection against a US Dollar
decline is GOLD. Geopolitical uncertainty, war,
global economic sluggishness and a weak U.S. dollar
are usually good for gold companies. The major factor
providing intermediate/long term support for gold is
that a further decline in the US dollar is practically inevitable.
However, as 2004 is a election year, don't be surprised
if Gold is "surprisingly" weak at times. These are the
times we like to buy. With gold under $380 in May, we still have a $425-$450
target rise possible by year end. Just as IBM and GE are DOW
bell weathers for DOW, so is Newmont (NEM) for gold in BIG
money portfolios. FYI: Last century, it was ABX, when hedging
wasn't such a dirty word. My favorite major is Placer Dome (PDG).
2004 will again be
more a stock pickers market, than a sector
based one. However, less important
will be the need to research closely for skeleton's
hidden in the closet. They have already been
my Moon in Libra, my
Stock Selection is both:
BOTTOM UP :
I like to begin with one or more of the following 4 criteria:
A: CASH RICH, WELL MANAGED AND PROFITABLE,
B: UNLOVED BUT UNDERVALUED,
C: POSITIVE MOMENTUM AND MONEY FLOWS
D: GOOD HOROSCOPE OR IN AN ASTROLOGICALLY
1) Jupiter in Virgo until Q4
when Jupiter enters Libra.
choice this Winter was cash rich
dividend paying global blue
chips. These are companies
that are prospering by gaining
market share and buying
"cheap" assets during this
economic slowdown over small
and midcaps. These
are companies that will become
far stronger in the long term. Our
game plan is to invest conservatively,
but due to recent high market
volatility and increasingly
compressed market cycles, we now advise
trading all accounts
more actively, at least 50% of portfolio
holdings! Note: European and Asian stocks
may NO longer rise and fall fully in sync
with US markets as currency trading brings more wild
short term swings, and when the US dollar resumes its secular
WSNW subscribers should periodically
our favorite blue chip long term investments.
Spring/Summer 2004's favorite
strategy will be Market Neutral Hedging:
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. Over the next
few months, we will not so much be investing as doing
short term trades such as shorting Nasdaq Internut-like
Seven selected Investing
For more and updates,
may visit our AFUND
1. The US dollar will fall
select Country I-Shares or Foreign
Blue Chip companies to hedge:
always like undervalued
stocks, especially if coupled
with a yield greater than
the classic value buy signal
of 5%. Given Saturn's entry into Cancer, we dramatically
reduced our previously favored REIT exposure
while we wait for more of a downward real estate price adjustment.
We also recommend stocks that
are 10% or more undervalued or potential M&A
acquisition candidates. WSNW subscribers may wish to read
our S: Income&
Dividend stocks post for more.
- Canada (EWC):
Accumulate late H2 2004.
Honda (HMC), Shiseido
(SSDOY), Sharp (SHCAY) and
- UK (EWU):
Pound outperformance for Allied Domecq (AED), BP (BP),
Cadbury Schweppes (CSG), HSBC (HBC) and International
Nestle (NSRGF), STM Microelectronics (STM)
and SWISS RE (SWCEF).
S: AFUND GLOBAL
3. S: DJIA
FAVORITE 2005 stocks is American Express
(AXP). The three newcomer Dow stocks: AIG, Pfeizer (PFE)
and Verizon (VZ) have relatively strong fundamentals and along with
IBM and Johnson
& Johnson (JNJ) will be rebought in H2 2004
after a significant market correction for long term buy and
hold investment portfolio allocations. However,
even Blue Chip stocks have to be traded, not
"buy and held" for better than 10% returns
in 2004. Fundamentally, with OpenOffice and Linux bringing
serious competition back to the desktop for the first time in almost
a decade, and new competition such as IBM's software technology client
‘middleware" offering large corporations alternatives to Microsoft business
software applications, Microsoft's prices have only one way to go: down.
4. STOCKS FOR BAD
Gold, entertainment and consumer
staples often outperform in bad times.
Such stocks are to be watched and accumulated on weakness
before market bulls become concerned. Also considered
traditional safe havens in times of uncertainty are
utilities and property trusts. However, deregulation and
future interest rate increases will make them less attractive
S: Stocks for
Bad Times is a defensive,
lower risk value oriented portfolio that
allows one to sleep better at night even if there is
more terrorism or the "recovery" takes time
and is not on "TV" time. Also included are income oriented
stocks as well as an SRI component to feel good about,
even if one is not making a ton of money. This,
along with Health care, are our two favorite
sectors to buy and hold
during market weakness.
Even before we became
one of the first Apple
dealers in NYC,
we historically have liked
betting on emerging
technologies. This we
recommend doing in a basket of stocks,
because this is a high risk-high return
investment that is best done in a diversified manner. Also
I don't like to pay too much of a premium
over value for longer term
Note: Given an inevitable
future boom-bust cycles, the "safe" play is the equipment
sellers who always make money. After the Klondike and
California gold rush, most miners went home broke. The real
money was made by freighters and merchants who brought and
marketed supplies. So too with Biotechs, the Internet and Nanotechnology
Our 2004/2005 favorite ET sectors
BIOTECHNOLOGY: e.g. BBH and IBB or heavyweights Amgen
(CEPH) and Genentech (DNA) can be trading
buys on strong pullbacks.
I prefer to invest in companies that have multiple
products in clinical development.
SUCCESSOR ENERGY: e.g.
Vestas,and Gamesa. Watch: FuelCell Energy (FCEL),
Hydrogenics (HYGS), Intermagnetics General Corporation
(IMGC), Mechanical Technology (MKTY) and Quantum Technologies
e.g. NNZ or Veeco Instruments (VECO) and FEI (FEIC).
6. SRI STOCKS
Given the increasing risks to global sustainability,
we believe there is a corresponding increasing need for increasing
exposure to SRI stocks in one's long term investing portfolio.
One list to refer to annually for an initial stock screen
is SustainableBusiness.com's annual list of the 20
World's Top Sustainable Stocks. Another is to periodically
check our Neptune Fund selections.
*7. AFUND CLIENTS
know that the best
way to predict the
future is to create it.
Disclaimers and with an informed but
obviously biased view,
I am doing my best to
help create investor wealth
for client companies we
consult for including
High Tech Industries
[IHITF], Health Sciences (HESG) and
May 2, 1988 I have established
primarily due to my knowledge
of financial astrology.
While not perfect as
some critics would demand,
my precision and accuracy
is appreciated by many professional
traders and investors.
As more of our forecasting is now
private and contracted to money managers,
it is my intention to have other financial
astrologers and money managers
contribute more on my web site in the
(c) 2000, 2001, 2002, 2003, 2004.
The Astrologers Fund.
No part of this report
may be reproduced or distributed
in any form or by any means,
except for brief passages
quoted for review without
the prior written permission
of the publisher.
ALWAYS CHECK WITH
YOUR LICENSED FINANCIAL
PLANNER OR BROKER BEFORE
BUYING OR SELLING ON THE
RECOMMENDATIONS OF THE ASTROLOGERS
RESULTS ARE NOT NECESSARILY
INDICATIVE OF FUTURE
OR PROFITABLE TRADING
At the time of this writing AFUND clients IHITF, HESG and KRMA are currently
paying $2500 monthly consulting fees.
The Astrologers Fund
Accepts No Liability
Whatsoever For Any
Loss Arising from Any
Use Of Its Report Or It's Contents.
Fund Or Its Clients Usually
Holds Positions In The Stocks
and/or Market Instruments
Mentioned And May Buy Or
Sell At Any Time Without Notice.
This Information Is In No
Way A Representation To Buy Or Sell
Securities, Bonds, Options Or