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1. COSMIC SENSE
2. INVESTING
3. TRADING
4. INVESTING WITH WSNW
5. LETTERS
The BIG ONE next week? Since before November, I have maintained that investing in the US in 1998 was like investing in Asia in 1997. I forecast that Hong Kong would fall BEFORE the end of August 1997 and that the US would correct in the March/April 1988 option period. No much longer to wait. Assuming the market closes below 8060 next week as forecast, I am taking a vacation. Even in our favorite Big 3 market Europe, we suggested profits on one full position (1/3, up from previous 12%). ahead of next week. So while buying on dips has worked to date, we prefer to sing "bye bye market" to "buy buy market".
ASTROLOGY + COMMON SENSE = COSMIC SENSE
U.S. equity funds took in an estimated $3.05 billion in the three days ended February 26, for a monthly rate of $19.7 billion. Equity fund assets grew to $2.20 trillion from $2.14 trillion in the prior week.
Bottom line, it now takes $13.51 billion (up from 13.4) to keep the market even, so far so good for the bulls. But money flows can be fickle. All it could take is one more eclipse and presto, negative money flows. On Friday, investors mindlessly bought on rather bad new to push the market up 125 DJIA. Now just imagine how far and fast it can fall?
We expect a number of major US companies to report earnings as disappointing as Intel and Motorola did last week and have FULLY positioned ourselves accordingly until the end of March and April options expirations.
Key Dates: March 9, 10, 11, 12, 13
DJIA: 8060 or less!
2. INVESTORS - Too afraid of Taxes to sell?
A) This should not apply to stocks held in your IRA.
B) Go through the numbers with your financial planner. It might not pay to sell a $100 stock you bought years ago at $35 for only a 20% correction, but one you bought at $80 may. Warning: pie in the sky tech stocks can easily drop 50% or more in a moderate correction. Please remember, you don't collect if you buy Fire insurance AFTER your house has burned down.
C) Even if there is no correction, there will be rotation. Are you comfortable with ALL of your current portfolio? If you would not buy a stock you own today, why not sell it?
3. TRADING advice: SHOOT ANYTHING THAT MOVES, but RUN WITH TIGHT STOPS.
Buy Internet stocks? They have no earnings and none are expected in the near future. Therefore they can NOT have earnings disappointment!!! Right? NO!!!
Choice short targets next week: Bank and Technology/Internet Index/stocks. We continue to like the relatively low risk of IBM and HWP, both which were DOWN Friday and Chase Manhattan Bank (CMB) with its Asian exposure. Higher Risk and Reward is offered by YHOO with April puts. Of institutional interest is Indonesia, which has an 83% probability of retesting its lows (another 30%+ fall). Unfortunately, there is no Indonesian Webb for retail customers and I wonder if the major Dutch banks have smoking gun exposure there?
NEXT TIME HOW NOT TO TRADE WITH WSNW
4. INVESTING WITH WSNW Part I
Often I am asked I bought XX on your advice, and wonder whether I should sell it. I do not give this information for reasons I will shortly explain. But if YOU buy or short a stock, you should decide IN ADVANCE whether it is a trade or an investment, and whether short term, intermediate term or long term.
I don't buy and sell stocks. I advise portfolio management. When trading, I mostly use technicals and astrology; when investing, I primarily use fundamentals and astrology. For me investing is mostly a time - how long question; trading is mostly a price question. A few factors I consider when deciding to sell are: why I bought the stock in the first place, whether it is still performing according to plan and most important, whether it is expected over time to continue to outperform the general market and cash, and to a lesser extent, the tax consequences of selling. When to sell will be the subject of a future posting.
To repeat: I not recommend buying and selling of stocks but maintaining portfolios according to one's view of forthcoming markets. I may recommend buying and selling the same stock or market at the same time to two different investors. For example, I could be Long Italy and Short US, but at the same time Long US/Short Canada. Further, we may currency hedge Long Lira/Short US Dollar and Long US$/Short CD$.
(1) Money management is more important than market forecasting.
(2) Set realistic investing goals. If it is 15 - 20% a year, don't expect every stock to appreciate that much. Some will do more and some less or even lose money. Have stop losses calibrated to your time horizon and profit objectives.
(3) Read my newsletter and cross it with your own work or those of another advisor with a different discipline. If you prize safety to risk/reward, use consensus thinking and triple screen three disciplines. At a later date, we will expand this into a web post. Your feedback is appreciated. to help make this happen.
PS We are hoping to make a long awaited announcement regarding Astrologers Fund portfolios at our May 15 1998 seminar in NYC!
5. Do I have the right investment letter? Bought Oxford in October of 1997 shortly after you recommended it. I calculate it to be down around 40%. Now you say it reached it's 25% target. Is there bull in that Bull's Eye? Do tell.
HW: 1. We maintain multiple portfolios. Each is designed according to different risk/reward criteria. Some bought Oxford at 26, others at 15 and in the Stock of the Month Club (SMC) pick performance table you are referring to at 17.5. It reached more than 20% (25%), its SMC target. See STOCK OF THE MONTH CLUB for details.
Note as to your purchase in October. The FIRST day it was up 10% and then retreated. Day trading portfolios sold, but most portfolios held it until our Feb 23rd WSNW change of heart. Some sold then at 20 1/8 for a profit, others for a loss and others like our UIT continue to hold it. As we expressed above, it all depends on the total risk/reward, stop loss parameters. and individual portfolio account projections. I hope this answers your question, and clearly proves no bull in this cosmic value (aka current bear's) heart.
One comment: after extensive research on key words, I feel that it is Mercury, not Neptune, which rules rumors. Neptune rules flimsy things, or actions which have no substance, but if you want a "rumor" which is intended to do or against something with ideas being formed, it is best to use a Mercury rulership.
HW: Well perhaps there are two types of stock rumors: Mercury and Neptune, the former with substance, the latter without?
I don't see Australia as part of your world market. I did search your site and apologize if its (AUST) there.
HW: It is not a major market, and while we cover it institutionally, we do not on our public web site. Besides you not only sold 2/3 of your gold reserves, but aligned with Asia at hardly the best time! Sorry.
All huge mergers should carry financial health warnings - don't they know we are headed toward Pluto in Capricorn and down sizing???
HW: Maybe, but don't YOU know that you just buy stocks and hold them for 25 years or more and forget about EVERYTHING else? :)
Q: Assuming that you are correct on a substantial correction occurring for the market during the next two weeks, would it not be prudent to hold off on any purchases, even IHI, until after at least a good portion of the 2,000 point drop you envision in the DJIA has occurred?
A: As to IHI or any other stock, we never recommend purchasing any stock in our capacity as newsletter writer, but only that you investigate buying. Recently, we are 3/3 in our Stock of the Month Club. Even during the depression some stocks went up. Personally, I would only buy fallen angels (Compaq under 24) or special situations stocks like IHI in the next two months. Whether to buy ANY stock depends on a variety of factors. I expect to wake up one day soon and see IHI flying. The possible pain of missing that is too great for me to bear. As for other investors, there are always many opportunities in EVERY market and you should choose ONLY those you feel comfortable with after doing your homework.
INTEL JUST WARNED-BAD-BAD NEWS LOOKS LIKE TOMORROW YOUR SHORTS WILL DANCE MAZEL TOV
HW: They did rather profitably to say the least.
"Yesterday was completely overdone," said Nick Moore, portfolio manager at Orbitex Management. "The market is actually a bit savvy about the idea that this is the fourth consecutive quarter Intel has had trouble and how long has it been since Motorola had a good quarter?'' Moore added." Now you see, everyone already knew Intel and Motorola were crappy stocks :)
HW: Hey you don't happen to know the other crappy stocks do you? I would sell or short them immediately if ONLY you would tell me which they are. Please? :)
"Can you afford NOT to have financial astrology in YOUR future?"
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