WALL STREET, NEXT WEEK

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WALL STREET, NEXT WEEK: October 1, 2001
FINANCIAL ASTROLOGY FOR THE SUCCESSFUL INVESTOR AND TRADER

1. OCTOBER ASTRODATES
2. OCTOBER MARKETS
3. UP STARS/DOWN STARS
4. ASTRONUT
5. QUOTES
6. ON THE WEB
7. LETTERS

1, October 2 Harvest Full Moon 9:49 am
10/16 New Moon 3:23pm
10/17 Neptune S
10/22 Mercury SD 8:23pm
10/23 Sun enters Scorpio 4:26am
10/30 Uranus SD

WILL OCTOBER BE THE CRUELIST MONTH?
Pre-911, we thought so, but now we are not so sure.  Will markets react negatively after the October 2 FOMC meeting? We believe this is simply another buying opportunity. A 2001 bottom is likely to be in place within two weeks, if indeed it did not occur on September 21, as we believe. We recommend accumulating cash rich blue chips and high [>6.5%] dividend yielding stocks. If you are a long term investor, be stingy with P/e’s: a maximum of 22 for TMT stocks and 18 for the rest - after December, eliminate the premium for TMT stocks.

PANIC INVESTING AND TRADING
You can profit from trading or investing buys when stocks are dumped. Last week, we recommended buying a number of Hotel and Oil industry stocks such as FCX, MHX, PKD, which can still be bought and traded for quick profits or held long term. Upcoming will be a war action/reaction. This is likely to present yet another opportunity for quick trading profits or long term investors dream buy lists. Remember, the Dow Jones Industrial Average dropped 2.9 percent on the first trading day after the Japanese bombed Pearl Harbor in December 1941. The index was down just 0.9 percent a month later.  Still, a terrorist counter-attack is likely to do the most short term market damage. Have your buy list ready, should it occur.  Conversely, any undue, over-enthusiastic war celebrations are times to take trading profits.
 OUR VIEW: Global markets are targeting pre-911 levels, e.g. DJIA 9605 and NASDAQ 1695.

DOUBLE GOOD NEWS
There is no need for a capital gain cut this year: sell highly profitable long term holdings and wash them against more recent losers.  Of course, only sell stocks you don’t want to continue to hold long term, but “couldn’t” previously for tax reasons. 
According to one Citibank advertisement, another upside of the new, new economy is “now you know she is marrying you for love” ;)

KEYDATES:    October 1, 2, 3
DJIA:                8430-9070
NASDAQ:       1500 PIVOT
XOI:                 Continue long term accumulation

Now there is LIGHT AT END OF THE TUNNE: Saturn-Opposition Pluto does end May 2002!
POSITIONAL TRADERS: Markets will be HIGHER in November than now.
INVESTORS: FALL 2002, the markets will be HIGHER than now.

2. We watching to rebuy on dips both Valero (VLO) and Sunoco (SUN) as intermediate investments with targets of 42 and 38 respectively.
While we continue to sell our trading gold, we are still holding gold as a long term investment and/or as a currency hedge. Next distribution at $304 and stock selling at XAU 68.

Mexico's major banks recently started a credit card war when Spanish banking giant BSCH (STD)  offered credit cards with a 24% annual percentage yield, well below the 50% market rate. Archrival BBVA (BBV) rose to Serfin's challenge announcing a credit card with an annual percentage yield of 25%.  I bet you can’t wait until NAFTA makes us more like Mexico!  We continue to rate Mexico an Avoid except for special situations i.e. takeover candidates by US hungry giants such as Citibank and GE. Our one exception is Cemex (CX) which we continue to rate a long term accumulate at 21 OB.

3. There is "less than a one in a billion chance" of Concorde crashing again when the supersonic jets return to the skies more than a year after a catastrophic accident, a British aviation official said pre-911. Still, I don’t like those odds, and have been negative on almost all airline stocks for some time for reasons ranging from weakness in business travel to extensive fare discounting. The only exception will be the IPO float of JET BLUE. Until then, we hope you will avoid both the environmental destruction of the Concorde as well as buying most airline stocks.  While the worldwide outlook for tourism leaves little room for optimism according to a recent NY Times article, it is always a question of location, location, location. The worst affected area is naturally the Middle East, while the least affected, according to this article, is Serbia, “There has been no difference in tourist arrivals since September 11, according to Lubica Milojevic, national tourism director. However, we prefer the USA and we recommend the accumulation of a number of high yield Hotel REITs like FCH and MMX, which we believe will offer a total return of 25% in less than one year.  We are also watching cruise lines, especially Royal Caribbean (RCL), which we believe is currently undervalued by more than 25%. 

October 1-5 is the 29th National Wine Week . Given that advertisements in the NY Times suggest you cancel your afternoon meetings and enjoy 10 wines for $10 with lunch, we think afternoon stock trading could be less rational than usual.  Is this the right time to buy wine and beer stocks?  We believe it is logical to assume that any further increase in terrorism will increase consumption of the hard stuff still more. Given these are “sin” stocks, we don’t cover them; ask your local bartender during the next bomb scare for advice.

4. In response to the tragedy of September 11th, America the Beautiful Fund is providing $1,000,000 worth of flower, vegetable and herb seeds to plant "Freedom Gardens" all across America.   America the Beautiful Fund President, Nanine Bilski, said, "Just as Victory Gardens helped us to win World War II, and Memorial Day was started to plant flowers for the Civil War casualties, Freedom Gardens can give people something practical to do in their own community in the wake of this tragedy.” Anyone who wants to sponsor or start a Freedom Garden in their community can receive a grant of 100 to 1,000 free seed packets.  Information can be found at www.freeseeds.org .

5.  "You're starting to get some really good values. We're trying to position ourselves now for what will be a lot better a year from now."
Dirk van Dijk, portfolio manager, C.H. Dean
HW. We agree 100%.

“GDP was a little better than expected. It looks like no recession yet, but obviously all this is for the second quarter, which predates by a long way the summer months as well as the Sept. 11 events.''
Peter Blatchford, head of proprietary trading, Miller Tabak
HW: Actually, we believe the government’s final revision of .03% was an under-estimate by .01%.  Be that as it may, the question is how close to our forecast for -2.4% for 3Q 2001, the government will report.

6. If it's the tech bottom, don't play old favorites .

The Recession won't last long.

7. READER; Thanks for your morale -building message this week-end.  We have dealt with wars in the past, and the markets soon reacted positively, but we have never before had to deal with such terrorism.  Are you as optimistic as you sounded about the beginning of a turnaround within weeks, when just on today's news was accounts of terrorists learning to fly crop-dusting planes, and the whole nation scared to death that we will always have to endure from time to time the type of life that has unfolded within the past two weeks?
HW: Yes, we foresee a late Fall rally- however, it may not last beyond Winter 2002.  After the spring, we do forecast another Fall rally for 2002.

READER:  I was wondering your thoughts on something that has bothered me for sometime... the extreme short seller community has a very simple battle cry. I'm sure you've heard it before, they say that P/E valuations around the 1987 crash were approx 15 but are 26 in the S&P, higher in the Nasdaq and that if they were in line, the Dow would be sitting at 3000 and the Nas at 800. I know they totally discount American ingenuity to change gears, wartime economy, government influxes, etc., yet can you comment on this. What is fair evaluation in this market? Is it actually possible to ratchet down to those levels?
HW: I tend to discount the idea “that is different this time.”  P/e’s levels are still too high. In 2002, we are reducing  acceptable investing levels to 17 or 18.  This extra 10% to 15% I believe takes into account the computer productivity gains of the past decades.  While I don’t foresee a DOW at 3000 or Nasdaq at 800, we certainly could see lower lows in 2002 than we had in 2001.  One obvious possibility is the October 1998 lows of DJIA 7399, SPX 923 and Nasdaq 1357.

READER:  BA- Current price $ 34. Long term - two to three years target $ 60. Flattish on the charts. Fundamentally it has to evolve from a combo of Civil and Military Aircraft Co. to a pre-dominantly Military Aircraft Co. It has the means to do so after the acquisition of MD. A good bet but should enter into this stock only in 2002 end!
READER: I disagree with your view about Boeing. It will not become primarily a defense contractor, but will continue to be a world leader of civil aviation as well as other sectors. I see your $60 target being reached sooner than late 2003.

READER: Noticed IHI* is way down.  Is there something negative happening, or would this be a good time for my son to throw a couple thousand into the company?
HW:  I believe it is an excellent time to add to your position, which is what I did on Friday.

READER: I’m considering buying (more) IHI *and am wondering a couple things:
1) What time, lat, & long do you use for the 17 May 93 chart (I’m assuming you DO use the 17 May 93 chart)?
2) Do you view the slide through the support area of ~$0.58 as just a reflection of the broad market, in the absence of any news save the 11 sep release that was subsumed by 911/WTC?
HW: 1) I don’t pay a lot of attention to first trade charts on the CDNX as I do for senior exchanges.  I use the 9/12/1990 and Roger’s horoscope for its current fundamentals and the 10/04/1994 Bermuda chart for its stellar future.
2) I view it as the last gambits of rather desperate short sellers (5+ million shares is our estimate) whose time, like Ben Laden, is almost up. I don’t believe any reasonable investor who is closely tracking the company, and its steady progress, would sell now, but only add to their long term investments in the company

READER: I own SLB and APA in one portfolio, and OIH (oil service holders) in another.  They're all down about 10 points from when I purchased.  What is the prognosis for this sector?  Recession? Lower oil prices? Is there any hope for a recovery in this area?
HW: Yes, there is reason for hope. While we sold Oil stocks some time ago, we now believe the XOI is near long term support and recommend the gradual accumulation of quality oil companies especially drillers and refiners.
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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                      
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