1. MARKETS
2. DEMOCRATIC CONVENTION EFFECT
3. FINANCIAL ASTROLOGY
4. QUOTES
5. LETTERS
PROFITS MATTER MORE THAN PROMISES
In 2000, there has been no large exodus from the stock market: THE
PLACE to put your money.
While investors have fled some countries, such as Japan, Indonesia,
South Africa, the key US market has yet to digest the meaning of the Jupiter-Saturn
conjunction this past May: Profits matter more than promises.
To date, we continue to see continual market sector rotation.
Almost daily, day traders seesaw between "old economy" DJIA blue chips
and "new economy" Nasdaq 100. Next year at this time, it should be
apparent what a strange aberration thisl really is.
In the meantime, Japanese investors are about to learn THERE IS NO
SUCH THING AS A FREE LUNCH
The above is a rather loose translation from Japanese of the BOJ lifting
its target rate for overnight lending to 0.25 percent, ending 17 months
of zero rates. A week ago Internet investor Softbank tumbled to 7,820
yen. It had shed 88 percent from its share-split adjusted peak of 66,000
yen in February. But was this Value? No! Perhaps 5000 may be.
Of course in a rational world, its "value" might be be closer to VALUE
USA [VUSA], than 5000.
With the DJIA closing over 11,000, can the TSE be far behind or is a double top in place? That was our bet last week as we recommended more selling of Nortel Networks [NT] and for the first time this year, recommended shorting it to some clients. Given next week's Democratic convention and the FOMC meeting on the 22nd, Summer apathy will soon be almost over. Still, if Alan does not raise rates 0.25 then, he will be forced to raise them much more after the election. I can't believe Alan really believes American productivity is surging at the fastest pace in 17 years while labor costs declined, the first time they have dropped since 1984. These labor reports befit a forthcoming presidential election race more than reality.
Last week, two successor energy companies came to market:
HPOW First trade: 8/09/2000 11:16:10 am and
DCHT First trade: 8/10/2000 10:00:51.
What were their astrologers thinking?
Finally, OIL is back over $30. Could "Big Oil" be voting Republican
in November?
KEY DATES: AUGUST 14, 15, 16
DJIA:
11,000 Ceiling testing; 10767 Support
NASDAQ:
S1 3750, S2 3666, S3 3520
EURO:
BUY 90 OB
2. Most analysts are looking to traditional sectors, e.g. buying in
the fuel cell sector and oil service/drillers (OSX), but watchful of BIG
Oil and drug stocks.
Still the REAL action is to be found by tracking the corporate sponsors
at the conventions. Forget about Bush Vs. Gore - the REAL fight is about
Coke (KO) Vs. Pepsi (PEP)!
The Iowa Electronic Markets are real-money futures markets in which contract payoffs depend on economic and political events such as elections. Chart the political fortunes of the candidates.
3. "The Party's Over! The DJ and NASDAQ take Severe Hits in August ...
and the Bear Market Begins ... The Decline in Unprofitable Tech and Internet
Stocks continues from August into September and October. The Dow
hold up until End of the Year. Both US Indexes turn down dramatically in
February 2001. But its from MidAugust 2000 the Bear Really Begins."
Rebecca Nolan, Editor, Financial Astrology
HW: If Gore wins. I agree that is the most likely scenario, but if
either Bush (or Nader wins), 2001 would play out in a more delayed (or
accelerated) fashion.
4. "It's time to lower expectations and invest in those companies that
have a chance of meeting or beating earnings expectations.''
Alan Skrainka, chief market strategist, Edward D. Jones & Co.
HW: Investors are slowing getting the cosmic value picture inaugurated
this past May with the Jupiter-Saturn conjunction in Taurus.
"The fuel-cell companies and the alternative energy companies will make
the dot-com bubble look like it didn't happen.''
Richard Schmidt, editor, Stellar Stock Report
HW: Investors, beware of having Internet-like wet dreams over the likes
of BLDG, PLUG, DCH, HPOW, MHTX etc.
This [VERIZON: VZ] is "the strike of the 21st century."
Gary Chaison, professor of industrial relations, Clark University
HW: I am rooting for the union on this one. Still, if offered the chance,
we will continue to accumulate Verizon (VZ) under 40 for a 46-51, intermediate/long
term price target.
5. READER: Is Verizon still a good buy from 46-40 in accordance with
your UP
STAR/DOWN STAR posting on it -- considering the current news on it?
HW: Yes, it is a first class telecom company and less overvalued than
most of its competitors. I believe a 12-18 month target of 52-55+ is conservative,
so an intermediate buy under 42 could make sense depending on the composition
of the rest of your portfolio.
READER: Hope your call on IHI is as good as the rest!
HW: That makes three of us. I am hoping that IHI and our new play [O.CCCA]*
should make my wife very happy by this Christmas.
READER: Why no chatter on MO?
HW: As SRI investors we cannot easily recommend MO. Yet on Oct. 21,
we "recommended" it as a [conscience-less] buy at 22 1/2 with a 42 price
target within 12-18 months. We also at the time wrote:
"As Philip Morris is NOT SRI, we gave a VERY SRI alternative: DCHT.
We also strongly recommended that if you bought MO, you also bought
DCHT to help save the earth in penance."
At the time DCHT (now DCH) was .31 we sold it between 9 and $15 a few
months later.
At the moment, we are neutral on DCH and but would still recommend
MO as an accumulation buy with a 6 month target of 41 as long as you don't
mind making money at the expense of others' lives.
PS I am happy to say none of my clients elected to buy MO, but all
made lots of money on DCHT.
******************************************************************************
Subscribers please send your comments, questions and suggestions to
Letters.
Silver Investing subscriptions $300 one year; $500 two years; new subscribers
3 month $99.
Gold trading subscriptions $1000 one year; $1500 two years; $300 Quarterly.
Platinum edition for money managers $5000 per year; $7500 two years;
$1500 quarterly.
Institutional rate is $2500 per month.
"Can you afford NOT to have financial astrology
in YOUR future?"
Stop reading Wall Street, Next Week, last week: YES,
I WANT TO SUBSCRIBE
************************************************************************************