2004/2005 MARKET FORECASTS

FINANCIAL ASTROLOGY:
It is NOT WHAT you know, but WHEN you know it.

© Henry Weingarten Last Updated:

Much of the following material has been serialized in WALL STREET, NEXT WEEK and our subscriber premium channels
Notes: Hyper links that are prefaced with a S: are restricted to WSNW Subscribers.
This forecast is posted on our web site at least one month earlier in our premium channels for WSNW subscribers.


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 A DIVE?


While the internal Stock Market astrology, as in 2003, is mixed, the external risk potential is horrific!
Short term, If you were unhappy about markets March 2000 and September 2001, don't expect to be singing in the rain JUNE 2004!

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 US.

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 we warned:
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?

BOTTOM LINE:
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 H2 2004:


Global Stock markets in 2004 will be determined largely by answering three questions:
Q1:  How will Bush's military adventures affect Oil prices and help or hinder the War on Terror?
Q2:  Who 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 corporate growth?

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?

AFUND TRADING RANGES
DJIA: 7816 to 10848
SPX: 853 to 1160

NASDAQ: 1150-2150

VALUE WITH GROWTH
Capital Preservation is 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 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 2004. 
Trade more (50% of  portfolio) and take/protect profits at 10%-20% profit points for long term non-core holdings.

LEARN THE LESSONS OF 2000, THEY REPEATED IN 2003 AND 2004 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.
        

INVESTORS SHOULD BUY AND HOLD STOCKS IN 2004 THAT ARE:
1) 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 options.


I GLOBAL INVESTING
BUY JAPAN AND CANADA FALL 2004
ACCUMULATE EUROPE

TRADE THE UNITED STATES
HOLD SAFETY: BERMUDA, LUXEMBOURG, SWITZERLAND

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 or currency.

EUROPE - A global alternative 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.         


NORTH AMERICA - Traders paradise


ASIA/PACIFIC
- Intermediate term investment opportunities in Japan.

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.


OTHER- Opportunities for savvy investors ONLY .

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 different.

WSNW subscribers should periodically review our S: AFUND GLOBAL 12 - for our favorite global blue chip long term investments.


II TIMING
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 year's mantra:
VALUE plus GROWTH is BEST
and Trade for short term profit 10-20% moves.

PRE-NOVEMBER 2004
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 buying.

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 and businesses.

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.

LONGER TERM

2005: The fifth year of each 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. 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: Jupiter will 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: 5/27, 7/10, 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.


II SECTORS
Sector based investing, while no longer replacing country based approaches to global investing, still is very important.
Favorite 2004/2005 future themes are: Biotechnology, Hydrogen/Solar Energy, Nanotechnology/Robotics and Wind/Water. 
The themes of Technology, Communications and Health Care continue to matter.
WSNW subscribers: please note we update our coverage on the following industry sectors on our premium Silver posting area: S: COMMUNICATIONS, S: COMPUTERS, S: ENERGY, S: HEALTH CARE S: MINING, S: REITS and S: Leisure.            
Our 2004 favorite sector themes are:         

IV STOCKS
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 mostly discovered.

Having my Moon in Libra, my Stock Selection is both:

TOP DOWN: country/currency, bourse/sector, individual stock and
BOTTOM UP : strong astrological and/or fundamental/technical indications.

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 FAVORED SECTOR:   

     1) Jupiter in Virgo until Q4 when Jupiter enters Libra.
    

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 fantasies.

Our first 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 decline. WSNW subscribers should periodically review our S: AFUND GLOBAL 12 - for our favorite blue chip long term investments.
                                               
Seven selected Investing themes follow. For more and updates, WSNW subscribers may visit our AFUND premium channels.    

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

2. We 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.                                                
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 TIMES
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 in 2004.
Our 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.

5. FUTURE TECHNOLOGIES
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 holding. 
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 today.
Our 2004/2005 favorite ET sectors are:                            

BIOTECHNOLOGY: e.g. BBH and IBB or heavyweights Amgen (AMGN), Cephalon (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 (QTWW).
NANOTECHNOLOGY:  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
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 consult for including International High Tech Industries [IHITF], Health Sciences (HESG) and Karma (KRMA).


Since May 2, 1988 I have established a superior forecasting record 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 future.
Latest sample performance figures at AFUND Performance.
Henry Weingarten

(c) 2000, 2001, 2002, 2003, 2004.  Please read our Full Disclaimer:         
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 FUND.
DISCLAIMER: PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE FORECASTING ACCURACY OR PROFITABLE TRADING RESULTS.
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. The Astrologers 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 Futures .
 
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