Wall Street Next Week July 23, 2001

WALL STREET, NEXT WEEK

Financial Astrology for successful investors and traders"

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WALL STREET, NEXT WEEK: July 23, 2001
FINANCIAL ASTROLOGY FOR THE SUCCESSFUL INVESTOR AND TRADER

1. MARKETS
2. UP STARS/DOWN STARS
3. STOCK OF THE MONTH CLUB
4. ASTRONUT
5. QUOTES
6. ON THE WEB
7. LETTERS

NO RECESSION
The US economy is NOT going into recession (barely), yet it will obviously have a negative 3Qtr GDP. We plan on becoming increasingly liquid and defensive pre-Fall. Whether Alan reduces interest rates again in August is a non-event in our opinion. He already used up his six gun. Bush has also fired his two barrel shot gun [tax cuts and increasing allowable IRA contributions.] The use of Social security money into the stock market is a bad idea and likely to fail. Bush will increase government spending in 2003 for his re-election campaign, but we are getting ahead of ourselves here.

Some bearish technicians are hoping for a replay of October 98. Still, only a –2.4% decline in GDP 3Qtr (our forecast) is NOT that bad, especially since it will be followed by a positive 4th Qtr. At this moment we do not see the market taking out its March/April lows. The question is how close we get to them.
Will DJIA be in range for 10,000-11,000 and close 2001 at 10,800 as we forecast last year?
Will Nasdaq again break 1800? We think not. Still, IT IS NOW TIME to rebalance portfolios. Last week, we sold Motorola (MOT) and bought Nokia (NOK). We plan similar pair shifting, with an eye to reducing reduce US dollar exposure in our global portfolios by 10% this season.

M & A MONEY TALKS
Sanmina [SANM] is buying fellow contract electronics manufacturer SCI Systems [SCI]; MARS bought out Royal Canine and Comcast will “merge” with T. This is THE BIG investing game this Summer and Fall. Our preferred trading strategy is to identify companies that will exceed diminished expectations, i.e. whose results are better than analysts feared, e.g. Boeing (BA), NOKIA (NOK), PALM, etc., and book profits quickly.
RAISE CASH – TRADE MORE

KEYDATES:    JULY 30
DJIA: 10600 Pivot
NASDAQ: Resistance 2150
NIKKEI Continue long-term accumulation
EURO: Continue long-term accumulation

2. Now that they are under the threat of the hot seat, unlike last year, we are agreeing more with Wall Street analysts. For example, Goldman Sachs recently started coverage of independent oil refiners Sunoco [SUN], Tosco [TOS] and Valero Energy [VLO] with market outperform ratings. Analyst Arjun Murti wrote that Sunoco's key strengths include a "diversified and high-grade asset base with strong presence in refining, marketing, chemicals and high-return coking and logistics businesses; a disciplined management team with a contrarian investment style; and a strong balance sheet." I agree. He put a price target of $50 on Sunoco, saying a successful restructuring has not been reflected in the company's share price. I agree up to 41. We previously sold SUN at 38, but may rebuy under 32 for our P1 price target of $41. Thereafter I will reassess or place a 2-point trailing stop.
FYI: He put a price target of $59 on Tosco and $57 for Valero.

Salomon Smith Barney said on Thursday that it lowered investment ratings on seven real estate companies to "under perform" from "neutral," calling the first half of 2001 a "junk rally" driven by smaller, second-tier names with above-average dividend yields. "We believe the higher yielding REITs' stock price
performance will likely stall for the balance of the year while the blue chip or higher quality REITs will out perform," analyst Jonathan Litt wrote. Among the companies downgraded was AFUND favorite Sovran Self Storage. I believe commercial REIT’s should be downgraded. On the other hand, we are holding SSS until 30 OB.

3. Given a new market cycle, we have re-instituted our STOCK OF THE MONTH CLUB 2001.
Our July 16 pick was Nokia (NOK) at 17.17 with a trading target of 19.95 and an investing target of 24.

4. Ananova - Italians work better 'when having affairs' [http://www.ananova.com/news/story/sm_343317.html]
Researchers for the Women and Life Quality Association found 56% worked harder if they had an affair at work. The study found flirty e-mails and notes with double meanings were the most popular means of starting an affair. One manager told researchers: "Work should be erotic: It is a large part of our life and when you work without feelings the results are not so good."

Of those interviewed, 12% said they met colleagues outside of work time with the aim of having an affair. Another 12% said they remained at work longer in an attempt to meet a colleague who they had their eye on. The employees with the highest libidos were found in Milan, where 25% claimed they were having an affair at work. Is this enough to warrant an upgrade of the MIBTEL? The Italian economy is slowing, and government revenues are falling. Will Prime Minister Silvio Berlusconi be able to fulfill election pledges to reduce taxes while trimming its deficit to meet European Union targets? I plan to be in Italy next April, and may or may not report on what or who I find!

Ananova - US firm produces loo rolls without the hole [http://www.ananova.com/business/story/sm_348746.html]
Kimberley-Clark (KMB) is reportedly going to fill the space with tissue paper, doubling the amount on one roll. According to the BBC, running out of toilet paper is one of the commonest complaints faced by companies. Tissue product manager Tracy Mark said it costs a lot as a result to employ "refillers". We are therefore immediately upgrading KBM to an intermediate term Buy 55 OB with an 18 month price target of 62 for conservative portfolios. Co-incidentlaly, last Tuesday, Salomon Smith Barney Monday analyst Chip Dillon upgraded Kimberly-Clark [KMB] to buy from outperform, citing the 25 percent drop in the stock's price since early December.

5. "The U.S. dollar today is essentially what the Internet craze was a year ago. We believe it's a balloon waiting for a pin.
Seymour Schulich, chairman, Franco-Nevada
HW: That is a very serious risk indeed.

"For the third year running, 2001 was supposed to be the year the U.S. dollar finally took a fall against the euro and other currencies. But halfway through the year, the dollar remains strong and is widely expected to make further gains in the months a head. What gives?
The basic answer is that foreigners retain a nearly unshakable faith in the U.S. economy. They keep investing money in the United States; confident that returns there will be higher than most other places and that risks are lower.
Michael Sesit, London WSJ
HW: Unfortunately, that perception is likely to change by next year.

"We believe that we're at the beginning of a five-year bull market in gold"
Pierre Lassonde, President, Franco-Nevada Mining
HW: I won’t bet against you for the first two years at least.

6. Din of Dollar Bears almost deafening [http://www.bloomberg.com/feature/feature995062400.html]

Brainstorms- Ten Rules for Investing in Gold [http://www.tocqueville.com/brainstorms/brainstorms.php?id=97]

6. READER: Do you agree that with the upcoming Saturn Opposition Pluto Transits -- starting August 5th through May, 2002 -- that the Dow and NASDQ will be down quite severely? And that the best strategy for conservative investors would be to stay out of these markets and wait until June of 2002 to re-enter?
HW: No, as stocks markets anticipate several months in advance of economic recovery, you should re-enter the market in late Winter/early Spring. Going fully to cash is one option this month, NOT next. Also, I would begin to raise cash levels either by selling any overvalued stocks or by placing close stops on 1/3- 1/2 of your portfolio.

READER: One quick follow-up question: Would agree that from now on (even with the Saturn/Pluto Transits) that holding GOLD STOCKS is the right thing to do?
HW: Yes, from 5%-10% of the portfolio, depending on your portfolio objectives and composition.

READER: STEM looks very interesting. A +10% gain yesterday while most markets were dropping.
HW: Yes. We plan to sell it soon; hopefully, it will pop to close to 10 on favorable Bush news.

READER: What is your current view of IBM.
HW: We sold it previously at 118. However, it continues to be our favorite DJIA stock. We are hoping to be able to buy it again the first week of August, ideally at 98-102.

READER: It's hard to think a company with good fundamentals, like NOK, could get so wiped out by this market. NOK is [now] lower than your stop. Is it still safe to buy today or should I wait until Monday or Tuesday of next week?
HW: Don’t forget its stock was ridiculously over priced before. Please note our stops are end of day, not intraday. Tomorrow morning Nokia reports. If you are cautious, wait until tomorrow. If you don’t care, as I don’t (I will buy more if “bad”), then buy. The correct course of action depends upon your investing risk tolerance and/or how much trading excitement you desire.

READER: You have done it again! As per your email confirmation, I loaded up on NOK at $17 per share. I was very pleased to hear the pre-market trades of NOK at $19 per share and futures are up strongly. Thank you very much and keep up the excellent work!
HW: My pleasure.

READER: Gidday from Australia. Yes news of IHI and its potential has reached the bottom of the earth. Could you please give me your view on the following?
When do you see the stock significantly rising, say ABOVE $1.60?
When and do you expect the stock to reach A)$5 B)$15 C)$50 D)$100 E)$150?
What would be the dividends associated with the above figures, and do you see $100 or $150 as a real possibility?
HW: THE IHI STORY Part XV includes our latest EPS estimates. Yes, I see $100 or $150 a real possibility, especially when its Bermuda horoscope (Future NYSE listing?) becomes active. As to the timing of its move, that is an open question. However $5-$10 is achievable short term. When exactly? Whenever other analysts see the same potential for IHI* that I do. I see its technical stock pattern improving with positive money flows and its current price above its 200 MA. Most important, positive astrological indicators, both short and intermediate term, are now being activated.
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PAST WALL STREET NEXT WEEK REPORTS
Thursday, listen to our ABS radio program TRADING BY THE STARS. ( c) 2001 All rights reserved. The Astrologers Fund "Always a Stellar Performance"
wsnw@Afund.com 212/949-7211 Fax 212/949-7274 370 Lexington Avenue, Suite 416 New York, N.Y. 10017-6503
Author: INVESTING BY THE STARS, THE STUDY OF ASTROLOGY,TRADING BY THE STARS (01)
May 17-19, 2001 Tenth Annual Astrology & Stock MarketConference NYC

DISCLAIMER: PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE FORECASTING ACCURACY OR PROFITABLE TRADING RESULTS.
INVESTORS ARE REMINDED TO PERFORM THEIR OWN DUE DILIGENCE BEFORE MAKING ANY INVESTMENT DECISION. ALWAYS INDEPENDENLY INVESTIGATE AND FULLY UNDERSTAND ALL RISK EFORE MAKING ANY INVESTMENT.
The Astrologers Fund Inc. Accepts No Liability Whatsoever For Any Loss Arising From Any Use Of Its Report Or It's Contents. The AstrologersFund Inc. Or Its Clients Usually Holds Positions In The Stocks and/or MarketInstruments Mentioned And May Buy Or Sell At Any Time Without Notice depending on market conditions and personal financial conditions. This InformationIs In No Way A Representation To Buy Or Sell Securities, Bonds, Options Or Futures. This information is not intended to be used as the sole basis of any investment decisions, nor should it be construedas advice designed to meet the investment needs of any particular investor.
ALWAYS CHECK WITH YOUR LICENSED FINANCIAL PLANNER OR BROKER BEFORE BUYING OR SELLING ON THE RECOMMENDATIONS OF THE ASTROLOGERS FUND Inc.
* IHI is an AFUND client.
** We will be reporting on Cancall (O.CCCA) over the summer. This is a company that I received 2 million shares (free) with 10 million additional shares optioned at .02. I have also bought in the open market for clients and myself. Naturally I am MOST eager to see them become VERY successful.
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