WALL STREET, NEXT WEEK

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WALL STREET,   NEXT WEEK: August 13, 2001
FINANCIAL ASTROLOGY FOR THE SUCCESSFUL INVESTOR AND TRADER

WALL STREET, NEXT WEEK August 13, 2001
FINANCIAL ASTROLOGY FOR THE SUCCESSFUL INVESTOR AND TRADER
 
1. MARKETS
2. UP STARS/DOWN STARS
3. ASTRONUT
4. QUOTES
5. ON THE WEB
6. LETTERS

FINALLY I UNDERSTAND- INVESTORS ARE IGNORANT!
From the Financial Times August 2 by Peter Spiegel and John Labata:
“Most US investors are seriously uninformed about the risks they face in a sinking stock market and there is widespread belief that their losses will be covered by federal insurance according to a SIPC survey. ….84% believe stock market losses would be repaid either the SIPC or the FIDC.
HW: It ain’t so.

DON’T ADD TO LOSERS
Many TMT stocks like Nortel [NT] and Hewlett Packard [HWP] are down. Should you “Double Up”?  Why? Are you afraid to admit a mistake or an honest belief that these companies will outperform their competitors in the next market cycle?  Consider the opportunity cost. Every investor is sometimes wrong (except newbies, liars, frauds and fruitcakes).  Don’t buy a stock only because it is cheap; this alone does NOT mean it will be a good investment. The primary decision in holding, buying or selling should be the answer to the following question:
Would you buy the stock today at the price it is selling, with the belief that it will be higher than market perform? If your answer is yes, then consider buying; if the answer is no, don’t add to losers.

MANIC TO PANIC?
The U.S. economy and corporate profits were expected to turn around in the fourth quarter, but Wall Street analysts now forecast U.S. companies will report flat earnings in the period amid a sluggish economy and lackluster sales, according to market research firm Thomson Financial/First Call.
US layoffs reaching record highs in July does NOT bode for a strong, quick and painless recovery. Will there be safety in owning defensive stocks? Proctor and Gamble (PG) posted its first loss in 8 years. On the bright side, US consumers “unexpectedly” cut back on their borrowing in June, marking the first decline in consumer credit outstanding since 1997. Expect further pullbacks this summer. Csco’s estimate for 0 to –5% growth next Quarter will be on the HIGH side for many struggling companies.
IT’S NOT OVER; IT’S JUST BEGINNING: Saturn-Opposition Pluto is over May 2002!

KEYDATES:   AUGUST 16, 20, 21
DJIA:               10,400 PIVOT
NASDAQ:       2000 PIVOT
US BONDS:    Continue distribution
EURO:             Continue long term accumulation

2. Deutsche Telekom [DT] CFO Karl-Gerhard Eick said in a press interview Friday that Telekom's share price is "massively undervalued."  We agree!  Taking advantage of Merrill’s downgrade of DT Wednesday and our August 8th B-Day call, as planned, we recommended Deutsche Telecomm (DT) as our August Stock of the Month Club pick between 16.75 and 17.25. We used the money raised by selling ATT last week.  While we expect stocks to both stumble and rally slightly into Alan’s August FOMC meeting, we are keeping cash and margin mostly for trading, as we expect markets to be relatively neutral in September.

3. In July, Canada became the first country in the world to allow people suffering from chronic illnesses to legally grow and use Marijuana.  "It is very courageous for the Canadian government to do this," Roger Pertwee, a leading expert on cannabis from Aberdeen University in Canada, told Reuters. "It is the first country that has legalized cannabis for medical use, so in that sense it is very groundbreaking. It will certainly make other countries take it seriously," said Pertwee.
Possessing, growing and selling cannabis for recreational use is still a crime in Canada but patients whose doctors write a certificate saying they need it for medical reasons will be allowed to grow it for personal use.  However, straight south, the United States Supreme Court has ruled there could be no exceptions to the illegality of cannabis. However, this is not the only reason Canada is now the number tourist destination of Americans.  But it may be as good as any to be “high” on Canada!  The Astrologers Fund, maintains its buy rating on Canada.
WSNW subscribers should periodically review our S: AFUND CANADA 25 .

Japanese stamp-lovers can now buy postage stamps with their photos on them. The vanity stamps were put on sale for the first time at an international postage stamp exhibition in Tokyo. Postal officials hope the stamps will encourage letter-writing as an alternative to email. The 1,000 sheets sold out within half an hour, the South China Morning Post reported. Misao Itaya, who posed with his children for the photograph, got up at 4am to make sure he arrived in time. "I want to use this when I send pictures of the kids to my relatives", he explained. This new entrepreneurial spirit in Japan, along with accelerated bad debt write offs by Japanese banks is why we rate Japan INC. a global out perform in 2002.
WSNW subscribers should periodically review our S: Japan 8 .
 
4. "I have never seen in recent years as much frustration as I see now in investors. Everybody knows that this market is going to recover somewhere along the way. Everybody knows we are in a valley and we are going to come out, it's just a question of how we are going to come out."
Stanley Nabi, managing director, Credit Suisse Asset Management
HW: If everyone knows it, that information cannot be that valuable for investors or traders.

"Earnings announcements and warnings have carried the day. We should be looking past the bad news, but it's difficult when you get the reality" of more disappointing results day after day."
John Davidson, chief investment officer, Circle Trust
HW: The “reality” is that Saturn first opposed Pluto last week, and this cycle will last until May 2002.

"People do think that the Fed is either done or has one more and is done."
David Ging, Treasury market strategist, Credit Suisse First Boston
HW: I agree that the Fed magic is almost gone.

5. Looking Ahead-Check Copper Prices [http://custom.marketwatch.com/custom/earthlink-net/mw-news.asp?GUID=%7B94A6727B-D732-4356-A4C8-D48C786EDD5C%7D]

6.  READER: Great calls. I shorted the QQQ, IBM, AMAT and bought puts. I made a lot of money to pay for your subscriptions until I am 2000 years old!! Thanks again.
HW: My pleasure. 

READER: I saw the program on TLC on  08-02-01 on prophecies and several astrologers had things to say. One man said that the stock market would crash on the 25th of some month (I did not get the month) of 2002. Do you have any feedback on this?       
HW: That was not our forecast.  Effectively many markets such as Nasdaq crashed in 2000. The question is when in 2002 or 2003 will there be a recovery?  If you are not a WSNW subscriber, just visit www.afund.com for our public views on the markets.

READER: Henry, thank you for your great insights on NOK and CHKP.  I was able to make very successful trades based on your GOLD subscription "DAILY MARKET COMMENTARY" and "STAR PICKS & PANS".  Great work!
HW: Thank you.

READER: Are you covering on Aug 8th or are you holding out for Cadbury's dates Aug 10 & or Aug 17th?
HW: It depends on what the market does, what the news is, and most important, what I own is doing! You misunderstand CADBURY SHORT TERM OUTLOOK- those are weekly price projections; he has already met it!! We email updated projections to Cadbury subscribers 3x a week.

READER: Any respectable broker in USA doesn't like OTC and Vancouver market so when IHI* gets onto a better exchange I can't see how that isn't going to be a bigger positive factor than maybe factored in at present.
HW: Agreed.

READER: Regarding the accumulate on Nikkei, what is it that one accumulates? I am still in learning phase regarding investment/financial areas.
HW: Slow buy on weakness quality stocks  such as Sony (SNE) or Honda (HMC).  As to “the learning phase”, for the best professionals, that phase lasts their entire investing career.

READER: Glad people are eating less donuts... hee hee... been lots of insider selling in KKD lately.... I remember Dunkin Donuts... no donut stock deserves a p/e of 100.
HW:  You miss the point! What do you think people will be spending their tax rebate on? New homes? Too expensive! However, $600 can buy a lot of Donuts! J

READER: Henry, I bought MOT and ATT last year as a long term investment in OCT as suggested...are you now advocating to sell them and not keep as a long term investment any longer and also sell LU at $10-11 and not keep long term anymore either?
HW: Motorola could be held longer term, but we sold it for its better Euro-pair Nokia which I believe was a better buy. We could have held it, but then we would have had too much telecom exposure as well as no money to buy Nokia. We may buy MOT again under 16 if/when given a chance.
ATT was initially targeted for 32. With AWE shares that becomes 25-26. [AWE we are selling at 20.50 but could be held long term to 25 as it is currently a well managed and run company, although its stock is expensive.]  However, unlike Motorola, which should start to do better in 2002/3, I don't believe in the ATT company management whatsoever and prefer to take a small loss (plus a big loss in opportunity time) and invest in better run, more profitable companies.
Whether you should do the same, depends on 1) your view of the markets in the next few months 2) what else you own and 3) the risk profile of your portfolio and its composition and 4) the tax consequences, if any, of selling/buying an equivalent but better sector pair.

READER: A subscriber?
“Strategists at Dresdner forecast that Wall Street could see a 20% crash next week, reported by Die Welt newspaper.  Their chief economist even goes as far as to suggest that August 7th could be the day it all kicks off.  This is the day the next set of US productivity figures are published, and importantly, they will be issued on new calculation methodology.
Dresdner predicts that the data will indicate that the non-inflationary rate of productivity expansion is only 2.5%, not the 3.5% that is expected.”
HW: If a WSNW subscriber 1) They would have forecast August 8 and 2) They would not have forecast as much as 20% drop. :)
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(c)   2001 All rights  reserved.  The Astrologers Fund  "Always a Stellar Performance"
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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.
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* 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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