© Henry Weingarten Last Updated:

Much of the following material has been serialized in WALL STREET, NEXT WEEK and our subscriber premium channels. This will next be updated in May after our 11th Astrology and Stock Market Seminar May 13-15, 2005 in New York City.
Notes: Hyper links that are prefaced with a S: are restricted to WSNW Subscribers.
This forecast was first posted on our web site in November in our premium channels for WSNW subscribers.

"The real issue for investors is whether the economy slows significantly next year, and how fast corporate profits grow." FT Lex Column

Intermediate Term, the 2004 US Presidential election is only One of Seven Market-Driving Forces in 2005. The others are Terrorism, Iraq, Oil, Valuation, Interest Rates and the Economy. Just as Democrats and Republicans were roughly and highly evenly divided, so are market Bears and Bulls today. The former see the cup as half full with continued worries about the three "I"s: Iraq, Interest Rates and Inflation that will result in further economic slowdown and reduced corporate profits overall in 2005. The latter, while acknowledging that there are many dangerous and difficult challenges ahead, view the post October 25 markets not as a bear market rally, but as the beginning or continuation of filling up a half empty economic cup.  The two sharply different worldviews are likely to continue to clash in 2005.  In such a yo-yo market, it is not so much macro economic views but the quality of individual companies and the individual prospects that should determine most stock buying in 2005. Furthermore, active trading and/or frequent profit taking is required in order to sustain portfolio growth.

Long Term, we consider the long term economic fallout of the US Iraq invasion quite severe and believe that global markets can retest or break their 2004 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.  We now recommend US investors in 2005 have up to 50% of their portfolio outside of US dollar denominated assets, or use gold and currencies hedges for similar protection.

Indexing will again be a loser in H1 2005. I therefore recommend increase use of Exchange traded funds [ETFs], which are passively managed, low-cost,  batax efficientskets of stocks that focus on countries, sectors, regions or indices. Even market bulls are concerned about specific asset classes and betting on individual sectors they prefer. My view remains that stock selection continues to be paramount and count more than sector rotation; it  is as important as market timing! Also, while the internal Stock Market astrology, as in 2003 and 2004, is mixed, the external risk potential continues to be abnormally high.
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.
 

BOTTOM LINE:
DON'T BUY AND HOLD. THE STOCK MARKET REMAINS A DANGEROUS PLACE.
I ADVISE KEEPING A BALANCED AND DIVERSIFIED PORTFOLIO, AVOID MARGIN DEBT AND BE CASH RICH.

There are five primary celestial and terrestrial phenomena affecting world events and global markets in 2005/H1 2006:

• The Inauguration of President Bush January 20, 2005,
• April 8 Total Solar Eclipse.
• Saturn moving into Leo July 16 and Jupiter into Scorpio October 26,
• Jupiter makes the first of 3 waning squares to Saturn December 17 and
• The continuing World War on Terror and the Iraq aftermath.

Four Big Investing Ideas

1. US DOLLAR  REMAINS UNDER PRESSURE     
Will the dollar stabilize, weaken or strengthen going forward? The long term structural problem of the US current account deficit has yet to be addressed.  The dollar should remain in a secular bear market for years due to its negative fundamentals. Unfortunately, for Americans, 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 today is under 85, with 82.80 to .81.20 lows probable and .78 possible in 2005! While there will be tradable (sellable) rallies, they will be only short term and not a long term trend reversal.  This will occur when either  the US changes its economic policies (unlikely), or the US dollar is trading below .85 with stability, i.e. .80-82 support seems likely to hold. There is also the lurking danger that the US will no longer be the world's sole reserve currency. This risk has increased greatly with the re-election of President Bush. To forestall or minimize this danger, 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. Given the US dollar secular decline, we continue to recommend that All investors need to diversify their investments globally. Additionally many blue chip foreign investments are more attractive investments with stock prices cheaper by most valuation measures: price to earnings, price to sales and price to book. 
Our recommended US equity portfolios international stock allocation remains 50%.      

2. A WAR TIME ECONOMY: GUNS AND CAVIAR REDUX

These are extraordinary times, where geopolitical risk and outlook continue to outweigh normal stock market . considerations trends.   As this will take money away from more productive areas of the economy, we are far from bullish intermediate term. Fears of deflation and interest rate cuts left US and UK government bond yields at multi-decade lows in H1 2004.  Today both suffer, 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. Next we could see a very nasty bear market in bonds.  Remember: Life jackets, Deadbolts, Smoke and Fire Alarms etc. do NOT provide you with Financial security. Liquidity, Global Diversification and hard assets such as gold DO offer some protection.

3. GLOBAL HOUSE PRICES and  THE US HOUSING BUBBLE

"The U.S. housing market has become a bubble which will burst in mid-2005, forcing the U.S. Federal Reserve to cut interest rates and exposing the economy to the threat of deflation once again. Prices are 10% to 20% too high and will take roughly five years to fall."  Ian Morris, HSBC Securities USA


Globally, property prices remain at very high levels. They have risen exorbitantly in relation to average income. A return to fair value could happen by 1) a fall in house prices or 2) by a rise in wages and rents.  A third possibility is that housing prices will stagnate for as long as eight years. 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) 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 robust housing sector.

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 6-12 months while Saturn remains in Cancer (Housing. Let's not forget what Saturn at the end of 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. Note: Optimists believe strong housing demand will mitigate things resulting in just a reversal of the McMansion trend of bigger housing, lower quality homes and 40 year mortgages eventually replacing 30 year ones. Pessimists believe positive factors such as population growth is already factored into housing prices. Either way, buyers will benefit more than sellers.


4. INFLATION AND THE HOUR GLASS OR BIFOCAL ECONOMY
US Bonds will take a small hit, unless there is more terrorism. Spin it as they may, the economy is not only slower than many Wall Streeters believe, but it will get slightly worse before it gets markedly better. Also the CPI has been significantly understating inflation for years. Bill Gross of Pimco is quite correct in pointing out the CPI con job. It understates inflation (the cost of living as well this year as well as last year). I recommend an allocation of of 25%-30% of one's US Bond portfolio into TIPS (Treasury Inflation Protection Securities) for non-taxable accounts and  I bonds for taxable ones and/or Canadian Real Return Bonds. Commodities, especially gold, is another appropriate hedge for many portfolios.  We expect to see $500 gold perhaps as early as July 2005.  We will continue to underweight REITS into H1 2005. The emperor has no clothes and is Alan Greenspan: Playing the Fool Or the Scoundrel? What would happen should the public lose faith in Alan's credibility? I shudder to think.

Global Stock markets in 2005 will be determined largely by answering four questions:
Q1:  Will the US Dollar remain the sole global reserve currency?
Q2:  Will Energy Prices Stay High?
Q3:  Who will be helped/hurt the most by the lower/higher US dollar?
Q4:  What P/e's will investors be willing to pay for modest corporate growth?

TWO BIG WILD CARDS:
1) The Financial Accounting Standards Board (FASB) requirement for expensing options is likely to result in a strong Nasdaq midyear fall, as it would reduce up to 44% the profits of a a number of Nasdaq high flyers.
2) The partial privatization of social security would result in a stock market bonus, but a US bond hit.

SHORTING AND MARKET NEUTRAL INVESTING FOR EXPERIENCED INVESTORS
In order to sleep soundly at night, I recommend a Hedge Fund style Market Neutral Strategy for much of 2005. This involves both buying under valued and selling short overvalued stocks. This is often best done in industry pairs: going long quality stocks and shorting lower quality ones, as it involves the smallest risk, but 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. For example, take our favorite November 2004-2005 short Google (GOOG), has a history very similar to Yahoo mania. A GOOG short could be paired with Buying another Internut like YHOO.  Or one could buy the Internet Index (INX), for possibly more profitability, Buy the Nasdaq 100 or SPX respectively, while maintaining a GOOG short (until well past 108).

If you are bullish, I would recommend a long/short ratio of 2-1 for market neutral strategies.
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.

 HOW HIGH IS UP? HOW LOW IS LOW?

VALUE WITH GROWTH
We would be glad to be less active traders and more traditional buy and hold cosmic value investors if only....
In 2005, we recommend holding some [up to 30%] Blue Chip dividend stocks which offer a greater  total return beyond cash in the bank. Additionally, we look to commodities [10%-15%], currencies [10%] and small cap trading [5%-15% depending on account risk profile] for double digit 2005 portfolio returns.

Capital Preservation remains important for global investors; hence, we stress caution. Flat and range bound market  favor quality issues. Alternately, Market timing is key to above average returns.

Today most investors realize classic "Buy and Hold" is passé: Stock picking and market timing will continue to rule in 2005.
Successful investing depends 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?

• We believe only 30% of a portfolio should use the investment strategy paradigm of  BUY and HOLD Value or Growth stocks with at least reasonable valuations based on current and future profits.
• Any and all investing profits need to be protected against future bear assaults in 2005. 
• 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 AND MAY AGAIN IN 2005:
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 real. Despite globalization, sophisticated investors today are rightly concerned about being overly invested in any one country or currency.

EUROPE - The global alternative to the US
Today, we are buyers of Euro's under 126, sellers above 131.50 to 133 the first and possibly second time.[Reached] Our Fair value is currently 126-128.50, but subject to upwards revision should the Yuan repeg to a basket of currencies or a similar move by other country to keep the US Dollar the sole world reserve currency. However, we also note that if Gold targets $500, the Euro is likely to target 140.  We plan to trade accordingly.         

• HOLLAND - Euro Market Out Perform.
• ENGLAND -Further City Out Performance over Wall Street will be largely due to  out performance of the British Pound.
• SWITZERLAND: The worst is over, slow accumulation.
  
  
Note: WSNW subscribers can review our favorite S: Dow Jones Stoxx 50 stocks.             

NORTH AMERICA - Traders paradise

• S: CANADA -CANADA IS FOR SALE:  WHY NOT JOIN THE PARTY? One major reason is that Canada's trade and budget surpluses continue to contrast with large US deficits. We are delighted to have our northern neighbor as our favorite G7 country in 2005. As US investors diversify away from US dollar assets, more US investors should look at Canada as one attractive alternative for at least 10% of their portfolio next year. Equities [EWC] are cheaper relative to US markets. This should also keep Canadian investors happy, at least relative to the US in 2005. Resource rich, it will be the target of significant M&A to the extend allowed by the government. Fortunately for Canada lovers such as yours truly, 2005 will be stellar for Canada, and the loonie will approach .85 or higher. Retail Return Bonds (equivalent to US TIPS) will benefit both from the increasing Loonie and Canadian interest rates. Also, I recommend researching Canada's Power Book of high dividend paying - 50 Top Income Trusts.
  
  
• S: MEXICO - Mexico sends 90% of its exports to the United States and its fortunes are increasingly tied to its northern NAFTA neighbor. The amount of money shipped to Mexican families from relatives in the United States today surpasses foreign investment as the country's second most important source of revenues after oil. In 2005, we continue to look for potential take over targets sporting reasonable valuations or companies that can compete in the US for the rising Hispanic consumer market share. 

• UNITED STATES - Unfortunately, the US remains a nation at war with terrorism concerns likely far into the future. GMI - WorldPoll shows that unpopular U.S. foreign policies threaten  revenue and global market share for many American based companies such as American Airlines (AA) and McDonalds (MCD). Today, 20% of international consumers are  less likely to travel to U.S. or purchase American products and services due to U.S. war in Iraq and unilateral foreign policy. This degradation of US brands may increase in 2005. Also record budget deficits makes further tax incentives for consumers unlikely. The enormous US twin trade and budget deficits make the US Dollar a potential time bomb: It is no longer as safe a haven given massive budget deficits and the War on Terror. US Bonds are by and large unattractive except for Treasury Inflation Protected Securities or a similar alternative I Bonds. Positively, thanks to the weaker US dollar intermediate term, select US exporters will benefit. Additionally, more American firms will become M&A take over targets. Ultimately, US stocks will appear to be global bargains when the US dollar has dropped further and/or the currency risk has been reduced. This could happen as soon as H2 2005. Still, overall, many former investor favorites will disappoint as investors sell rallies to "get even".  Corporate earnings are decelerating, energy prices are likely to remain high and interest rates are on the rise,  However, given one can trade stocks here for 10-25% appreciation/depreciation a day/week, this remains TRADERS HEAVEN.
  

• S: JAPAN - For too long, Japan has depended on the US consumer and is now partially substituting the Chinese consumer instead of domestic consumption. As forecast, there has been a recovery in the Japanese economy and the Nikkei reached our 12,000+ price target in early 2004.  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 (9800-10200) or after any strong global stock market drop.
• HONG KONG/CHINA - How strong will the Chinese market be to and after the 2008 Olympic Games in Beijing. More to the point, will its current slowdown end in a soft or hard landing? 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. Until this is rightly addressed and Chinese leaders make dramatic moves to reform the country's financial system, we continue to recommend great caution.  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. Abuses on China's stock markets are rampant and listed companies have long struggled with abuses by their controlling shareholders. Hong Kong is slightly more attractive, although 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, with the exception of world class computer maker ACER (ACEIF), unless compensated for potential "war like" conditions in the future.
• KOREA - Even though growth is slowing and a rising won is hurting exports, we continue to like blue chip giants Korea Telecomm (KT), LG Electronics and LG.Philips (LPL). We still anticipate a peace dividend in 2005 and a MAJOR benefit from Chinese Yuan appreciation. The easiest way for US investors to buy is through the Korea Fund (KF) or Country Ishare (EWY).  Like Taiwan, this is a largely a bet on the US technology sector.
• INDIA - This story is now known to 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. Still, for 2005, we have a new Underweight rating.
• AUSTRALASIA - Australia's growing trade deficit and the weakening housing market will slow economic growth
  in 2005. This augurs well for Australian bonds as we remain mildly bullish for 2005, 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. [We rebought at .70 and sold at .78.] If/when it reaches .72 or .82, we would do the same.
• OTHER TIGERS AND DRAGONS - We prefer Singapore, Thailand and Malaysia to 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 happens all too often. 
• S: LATIN AMERICA - Accumulate on weakness 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. There is always an uncomfortably large possibility of shocking negative "surprises."   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. By the end of this decade, many forecasters believe we will see greater economic growth coming from a combined India, China, Brazil and Russia than from the established economies of the US, Canada and Europe.

Until then, one can expect plenty of geopolitical risk. For example, the actions against Yukos and Khodorkovsky should be an investor red flag about Russia's commitment to rule of law and protection of shareholder and investor rights.
Current AFUND ratings on the BIG Four Emerging Markets are: Brazil (Accumulate on Weakness), China (Wait), India (Distribute) and Russia (AVOID). In 2005, 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.

• 2005: The fifth year of each decade has been positive since 1881. However, we believe we are still within a larger secular bear market cycle. Jupiter is in waning square to Saturn December 17 (with subsequent passes in June 22 and October 25, 2006.)
  
• 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. This "wageless recovery" in most G7 countries, economic growth has failed to raise worker's pay:  Consumers are still in a financially weak position with little pent-up demand. 2005 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. 
• A new 21st century pattern?
  March 2000 High, March 2001 low, March 2002 High, March 2003 low, March 2004 High, March 2005? If not, we are likely to have only minimal market exposure in mid Q2/Q3, especially to Nasdaq.
• There is a high likelihood of the 2005 market top in Q1 2004 or perhaps even January.  Be that as it may, unlike 2004, we believe the Dow will outperform the SP 500 in 2005.  A Buy Dow/ Sell SPX market neutral strategy should result in a positive, above cash in the bank conservative return on investment.

LONGER TERM

2006: In the 4 year presidential cycle, this is often a down year (e.g. 2002, 1998 etc.)  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 enters Aries and Neptune enters Pisces and a total Solar Eclipse July 11, 2010 and a Total Lunar Eclipse December 21, 2010. We also have a rare transit of Venus June 6, 2012.  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 midnight 12/20/2009.

• Aging, Biotechs, S: Healthcare 
• Art, Beauty, Cosmetics, Fashion & Jewelry 
• Homeland Security & Law
  
• Life Essentials: Energy, Food, Shelter and Water
• Nanotechnology 
• Natural Resources, S: Precious Metals

• People are living longer and there will be growing demand for health products and care. US health care expenses total more than 14% of the total U.S. economy. This is more than Americans spend on food, housing, or automobiles. The easiest way to play this sector is to buy the iShares Global Healthcare Sector Index fund (IXJ). Uranus re-entered Pisces in late December 2003, 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). Another way is our December 2004 Stock of the Month club pick Enzo Biochem (ENZ) which in addition to biotechnology has several other profitable health businesses. 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 , baby boomers will receive more attention and money as time goes by, e.g. Sunrise Assisted Living (SRZ), American Medical Alert (AMAC), Candela (CLZR), and Lifeline Systems (LIFE). These range from assisted living communities and medical alert notification to laboratory testing companies to companies that provide orthopedic care and dental products. 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 company Church and Dwight (CWD) is a safe and boring buy, but along with many natural food companies shares, are expensive, e.g. Hain Celestial (HAIN), Hansen (HANS), 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 riskier, is cheaper and  worth a look.
• Jupiter move into Libra focused investing in art back into fashion as an alternative to the equity markets. This obviously helped 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), Jacuzzi Brands (JJZ), and Italian eyeglass-maker Luxottic (LUX), China small cap LJ International (JADE), and luxury French retailing giant LVMH may also out perform for the same astrological reasons. Another classic astrological rulership of Libra is Law, the legal profession should prosper and remain a growth industry in 2005. One potential beneficiary is LECG (XPRT), which provides experts and consultants for trials and legislative lobbying. Another has been Getty Images (GYI) which supplies photo images for media
  
• 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 outperforming possibilities include L-3 Communications (LLL), LOJACK (LOJN), and Ceradyne (CRDN) manufacturer of lightweight-ceramic armor vests for military personnel. While expensive, Computer security companies continue to become more profitable:  Checkpoint (CHKP), Syamantec (SYMC) and Trend Micro (TMIC).
• 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 is Fuel cell supplier Quantum TechnoTechnologies (QTWW) One small cap watch is WorldWater Corporation (WWAT). As for shelter, we remain hopeful about our smallcap client International Hi-Tech Industries.  The number three and fastest growing beverage is Water. Growth has been spectacular in a number of countries, with bottled water fast becoming the norm for in home and on the move hydration. The demand for providing clean water and recyling dirty water when that use is done is surging. Unfortunately, disputes over water are possible causes for war in the 21st century. German RWE and French SUEZ are serious global players, while American Stat Water (AWR), Pentair (PNR), Vermont Pure (VPR) and Aqua America (PSC) are good alternative domestic choices in conservative portfolios. Treatment stocks Calgon (CCC) and Ionics (ION) are safe long term holds.[Nov 24 ION climbed 48% on GE buy out offer. Calling water "Blue Gold" as in Black and Yellow may not be much of an exaggeration.]   
• The Nanotechnology Research and Development Act authorizes $3.7 billion in federal funds for nanotechnology, the science of building new products 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 similar effect to the suffix ".com" last century.  
• 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.  These are the times we like to buy. We have a $500 target rise possible in/by July 2005.  Just as IBM and GE are DOW bell weathers for DOW, so is Newmont (NEM) for gold in BIG money portfolios. My 2005 favorite major was Placer Dome (PDG), while from Q4 on it is Barrick (ABX). Commodities may also do well as a hedge . While I do not favor the housing industry at this time, three related stocks that may continue to outperform are: Cemex (CX), Lafarge (LAF) and Plum Creek Timber (PCL).

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

     1) Jupiter in Libra
     2) Jupiter In Scorpio (Q4 2005).
    
Spring/Summer 2005'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. Until then, we will not so much be investing as doing short term trades such as buying January effect stocks or periodically Nasdaq Internut-like fantasies.

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

• Canada (EWC): Outperform. Canada Natural Resources (CNQ), Encana (ECA) Potash (POT), PetroCanada (PCZ), SunOptica (SKTL) and TransCanada (TRP)
  
• Japan (EWJ):  Shiseido (SSDOY), Sony (SNE),. Toyota (TM) and Trend Micro (TMIC)
• Korea (EWY)-   Lucky Gold Philips (LGL) and Samsung (SSNGF)
  
• S: AFUND GLOBAL 12                              

BIOTECHNOLOGY: e.g. BBH and IBB or heavyweights Amgen (AMGN) and Genentech (DNA) can be trading buys on strong pullbacks.  I prefer to invest in companies that have multiple products in clinical development.   Another is our November 2004 Stock of the month pick Enzo (ENZ), which also has a stable health business unit as well as undervalued IP (Intellectual Property) in addition to the usual potential risky biotech home run.
     
CLEAN AND SUCCESSOR ENERGY: e.g. The WilderHill Clean Energy Index [ECO], Vestas,and Gamesa.
Watch: DayStar Technologies (DSTI), FuelCell Energy (FCEL), Energy Conversion Devices (ENER), Hydrogenics (HYGS), Intermagnetics General Corporation (IMGC), Mechanical Technology (MKTY), Quantum Technologies (QTWW) and US Wind Farming (USWF).

NANOTECHNOLOGY: e.g. NNZ or Veeco Instruments (VECO), FEI (FEIC) and watch Altair Nanontechnologies (ALTI) and Lumera (LMRA).

Forthcoming in 2005/2006 we plan to add ROBOTICS coverage.

7. 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.