Wall Street Next Week DECEMBER 22, 2003

WALL STREET, NEXT WEEK

Financial Astrology for successful investors and traders"

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WALL STREET, NEXT WEEK: DECEMBER 22, 2003
FINANCIAL ASTROLOGY FOR THE SUCCESSFUL INVESTOR AND TRADER

1. DECEMBER MARKET PULSE
2. UP STARS/DOWN STARS
3. ASTRONUT
4. QUOTES
5. ON THE WEB
6. IM OF THE WEEK
7. LETTERS
8. AFUND LETTERS

CAN THE RALLY CONTINUE IN H1 2004? INTO H2 2004?
2003 will be the first up year since 1999. The next key market event will be the fourth quarter earnings season mid-January onwards. Until then, shopping malls remain a key focus: 3-5% more shopping will not justify current lofty price levels to most value investors.

Zembei Mizoguchi, Japanese vice finance minister for international affairs said the U.S. economy still looked relatively strong despite its trade and budget deficits. "The U.S. economy is being supported by high productivity. It’s very competitive. Companies are making greater profits," he said. "Therefore I don't think the trade and budget deficits should be viewed with the same concern as they used to be."
HW: I wonder if he would be interested in buying the Brooklyn Bridge from me?

Market analysts do not expect the U.S. Federal Reserve to raise rates before May. That will be true only if the currency markets do not decimate the dollar before then. The spin-doctors are now hard at work educating the public that when a rate hike does come, it will be good for the U.S. stock market because business conditions are improving. After all, inflation is still low and…
HW: If inflation is so low, why did my coop board just raise my maintenance 10% to cover their higher operating costs: Real estate taxes, insurance, fuel costs and employee expenses?

IN CASES OF EMERGENCY, IS YOUR PORTFOLIO PREPARED FOR A DISASTER?
STOCKS & BONDS No! REAL ESTATE? No. COMMODITIES? Maybe CURRENCY? Yes. ART? Yes.
Last week bulls charged after Saddam’s capture was announced. Is your portfolio risk protected against terror attacks or a precipitous US dollar decline? We recommend cash and between 25 to 50% hedging long/short stocks, and owning TIPS in addition to US Bonds and corporates.
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I like that and am offering the same to all new and current WSNW subscribers. Subscribe or renew before 12/31, mention “Two for One” and your friend’s subscription is our holiday present to you.
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TRADERS: Last down day of the year could be Monday. Thereafter, with investors in holiday mode until the New Year, expect thin trading and potentially wide erratic price swings.
INVESTORS: We could close 2004 above 10,000, due to recent positive astro and seasonals. There is a slight short term Al Qaeda risk until Mercury changes direction January 7. We recommend being balanced in both trading and investing accounts.
Note: When not partying, you may find year-end holidays an excellent time to enter and exit positions.

KEYDATES:       DECEMBER 22
DJIA:                   10K Support 10224 Pivot
NASDAQ:           1950 Pivot
EURO:                SELL
TIPS:                   ACCUMULATE

Current Market Marker: The "Good" News is known: Light Profit Taking, then some Buying.
DON’T BUY AND HOLD. THE STOCK MARKET IS ON BORROWED TIME. ELIMINATE MARGIN DEBT, BE HIGHLY LIQUID, AND KEEP A BALANCED AND DIVERSIFIED PORTFOLIO!    Gold FV 386
DIJA FV 8200        4 DJ Stocks offer 4%+ Dividends.
Trading targets:         SPX   970 DJIA 9288 NASDAQ 1725.
12/31/2002 EOD:    SPX   879 DJIA 8341 NASDAQ 1335.

2. STOCK BUY BACKS: Pfeizer (PFE) has joined many other companies by announcing a buyback of up to 5 Billion (B) dollars. SBC is raising its dividend 10% and plans to repurchase 20% of its common stock. Coke (KO) will buy up to 2B of its stock. All three companies stock prices are likely to outperform short term because of this. While most investors and bullish stock traders will be happy, I believe there are better uses for company cash such as developing long term business strategies. Ah but I am thinking beyond the next quarter again!

Confessions of a Serial Microcap Investor
WSNW are being emailed our five choices, plus two alternates for our 2004 AFUND 5 microcaps. As previously announced, these selections are diversified among Biotech, Entertainment, Gold, Home Security, Successor Energy and the Technology sector.

3. Switzerland's Cozy Slump May Be Europe's Future
Neutral Switzerland did not support the US invasion of Iraq. Therefore Swiss companies, along with Canadian, French, German, Russian, Swedish and Austrian companies have been banned by the Bush administration from bidding on lucrative reconstruction projects in Iraq. Our current favorite four Swiss companies: Novartis (NVS), Nestle (NSRGF), STM Microelectronics (STM) and SWISS RE (SWCEF) are not likely to be negatively impacted by this ban. Furthermore, the Swiss Franc continues to gain strength against the US Dollar. However, we periodically recommend selling/hedging its currency, which offers an even lower interest rates than the US FED.

4. "Coming to the year-end, there's always a risk the market is going to succumb to profit-taking, it's just a matter of when."
Martin Mayne, associate director, NM Rothschild
HW: Monday?

"The big risk is on the downside but the market is ignoring a multitude of things they should be concerned about, such as the deficits and the weak labour market,"
Steve Previs, U.S. share dealer at Jefferies International
HW: Party pooper!

“There are two things at play in this market. You’ve got fundamental conditions in the economy improving, but on the other hand you have the very human response of mangers, who are facing the year-end and trying to position their portfolio after two or three down years.
Kevin Caron market strategist, Ryan, Beck & Co
HW: You betcha!

5. Bugs proclaim bear market dead Bullion above US$400 for first time in seven years.
“What everyone wants to know now is: Will the bull market continue to charge ahead? The consensus seems to be no. A survey of 15 gold analysts in November found their average price forecast for 2004 was US$380 an ounce. On the other hand, there is the system used by the late Harry Bingham, a famed U.S. fund manager. He used to say the value of an ounce of gold should be the same as the price of a good suit. According to the Brooks Brothers Web site, a two-piece suit sells for just under US$600.”
HW: Gold is just below its early February 1996 peak of $417.70. While gold can easily trade up to 420 or 450 in 2004, above 400, we plan to trading sell it, as often as buy it, next year.

Income Stocks, With a Kick
“Blind yield hunting can do considerable damage to your portfolio. Some companies pay out dividends just to keep investors buying while their core businesses are eroding.…
Two strategies can help you avoid such high-yield heartaches. First, treat dividend-paying companies like you would those that pay nothing. View the relationship between price, earnings and the rate at which earnings are increasing as the most important consideration. That means you should make liberal use of the price/earnings-growth, or PEG, ratio, which is calculated by dividing a stock's P/E by its earnings-growth rate…
The second strategy is to consider companies' payout ratios, or the percentage of their earnings that they pay out as dividends. Mature companies need less money to reinvest into their businesses, and can thus pay out larger sums to shareholders. Nevertheless, payout ratios of greater than 0.75, or 75% or earnings, should generally be avoided. (REITs and closed-end bond funds are exceptions.)”
WSNW subscribers may visit our premium post S: 11 Stocks for Dividends and Income 2004-2005 for more discussion.

6. Henry: Damn G is GOOD! Market up am to 68-72. He is both bullish on the US stock market and thinks US dollar drops to 82 next year.
J: Dollar to 82?
Henry: That is my P3 trading target on the US dollar index, although I am not sure we will see it. I presume he is predicting a situation like Mexico with its record low Peso and record high IPC Bolsa.
J: I don’t understand. Then the Euro would be way up, and market way down.
H: His view is the Euro moves to 126, dollar to 82 but market is up

7. READER: Your email prompted me to take profits in PDG yesterday [12/10] - this market has had amazing strength
HW: Yes.

READER: [T] Has given downside target min 16.00.
HW: We are doing our first buy at 18.50 with a price target of $21.50 OB. IF/when the stock market corrects, 16 could be seen. Whichever price comes first, we believe T will greatly outperform the DOW in 2004.

READER: Bear Stearns Companies downgraded the rating for AT&T to 3.0 - PEER PERFORM from 1.0 - OUTPERFROM MRKT Zacks average rating, is 3.7 - SELL.
HW: And your point is?

READER: On your Global 12 list, you have SBC listed as BellSouth. BellSouth is BLS.
HW: Yes, thank you for pointing out the listing error. SBC was our choice, as BLS is not a DJ Global Titan. Also SBC has a higher dividend payout as well as lower P/e than BLS.
Note: I will be updating our S: AFUND GLOBAL 12 listings for 2004 shortly.

8. HERE WE TALK ABOUT AFUND CLIENTS:
OVER THE NEXT MONTH, WE WILL BE BUYING MORE IHITF AND GYR-V.

READER: Will IHI finally report on order intake, or will they wait until stock is trading below 2/3 year lows? Or is this just the regularly December selling pressure?
HW: I believe this is the standard December year selling, to be followed by January effect buying.
PS Yesterday, our traders were selling gold and Euro's.

READER: I want to buy some more and wanted to know what your thought is on when orders will be produced and if that will get this stock moving. Also why do you think it has been going down so much lately if things are expected to start happening the beginning of 2004. I look at it this way the company is better positioned now than it has ever been in the past but the stock is the worst it has ever been, why is that? Do you think it is possible if things start progressing at a normal pace not like the past is it very likely for IHI stock do reach around $25 a share in 5 years? I watched Taser and it went from $4 to $85 in one year. I believe IHITF has that potential do you. Please respond to help me keep positive on this stock.
HW: Yes. I continue to believe IHI has a potential sky high future price target. This seems to be seasonal tax loss selling. This explains why small cap stocks like IHITF often go up in January as they are sold too cheaply (IHITF is currently priced well under book). I am buying more for clients and suggest you consider averaging down your positions. I hope to update my website with fresh IHI information any day now.

READER: IHI appears to be taking a swan dive
HW: If you are long term investor, just relax.
READER: Yeah, I know. I acquired most of my stock before my son was born - sure would be nice to see it back above the price I paid before he gets married... :-)
HW: Understood, but you can always add a little more here and average down. Don’t forget your grandchildren!

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PAST WALL STREET NEXT WEEK REPORTS
FRIDAY 11 am listen to our Internet radio program TRADING BY THE STARS. (c) 2003 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 14-17, 2004 Eleventh 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 has been an AFUND client since 1994 and is currently paying monthly $2,500 consulting fees and $500 for banner ads on our website. May 15, 2002, an affiliated company, Susan Hahn & Associates became IHI’s media representative with a monthly fee of $1500.
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Please read our Disclaimer for more information and note that my clients and I are shareholders and may act in the open market.
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