1. MARKETS
2. VALUE
3. QUOTES
4. REUTERS TV
5. LETTERS
BUY AND HOLD AT ANY PRICE?
Now that 300-500% gains in one day are becoming more commonplace, how
long before DJIA 100,000? As long as the myth of strong growth and
NO inflation continues to be believed. That could be until tomorrow or
as long as December 22 or even May 2000....
But do YOU believe there really is No inflation? Oil is up - but food and energy don't count. Air fares are up and so is real estate - my office rent doubled in the last five years. I informed my landlord that the government SAYS there is no inflation, so why increase my rent? He didn't agree, so naturally I am moving! Wall Street bonuses may be up 18% from last year, but much of this does not show up in compensation as it is paid in cash and shares. There is no inflation, right? Yes, of course, you can use the Internet and find cheaper prices, but Quality of Life Inflation was more than 6% in 1999. As is well known, you can fool some of the people all of the time, and all of the people some of the time, but you can't fool all of the people all of the time. Or can you?
Japan's economy contracted in July to September from the previous quarter,
as government investment and consumer spending fell. I can't decide if
Japan or China has poorer fundamentals and is more overvalued. Joseph Yam,
head of the Hong Kong Monetary Authority, told the Financial Times that
the euro's weighting in Hong Kong's reserves will rise to 15 percent from
10 percent because of worries about the U.S. balance of payments deficit
and stretched equity values on Wall Street.
"I'm afraid more and more people are focusing on the vulnerability
of the U.S. market and will start moving out."
HW: Yes, Joseph, Be afraid, very very afraid; I believe 20% would be
more prudent.
KEY DATES: Dec. 13, 15, 20
DJIA: Down
2. Yahoo and now Lnux are modern day tragic comedies of wildly insane market greed. Whether the Fed acts in time with a .50 basis point increase in February is doubtful. I no longer believe their current plan for the next .25 is enough.
However, on a positive note, we are beginning to find value! For
example, our November stock pick SSS, reached our P2 target of 18 last
week due to institutional dumping. Naturally, we were big buyers. (If it
ever reaches 16 our P3 target in a market meltdown, we will buy more.)
We have a $25 target in 12-18 months and it currently offers a 12% yield.
Late Friday, Xerox (XRX) reported a potential 40% profit shortfall.
It may open Monday around 20, and if you are not as bearish as I am, you
could buy there. I prefer the 15-18 area to begin accumulation.
3. "Short term it will continue -- it comes down to nobody knows where
it will end but you have to jump on the wagon. It's a momentum and earnings
oriented strategy and it's paying off very strongly. My advice is to stick
to momentum -- if you go against it and look for value, you will lose a
lot of money.''
Peter Wind analyst ING Barings Amsterdam
HW: Is that how you played Tulip Mania? Those who ignore history
are condemned to repeat it!
"We're nearing the end of the first century where man is no longer earthbound
and a goodly number of stocks, particularly on Nasdaq, appear to be reaching
for the stars as well.''
Alan Ackerman, market strategist Fahnestock.
HW: Remember the story of Icarus Alan?
4. We are being interviewed live on Reuter's TV Tuesday December 14 on their Technical Outlook Show 10:am EST.
5.READER: FYI - in case you have missed the details on the upcoming
full moon - this solstice/full moon occurs on the same day as the next
8.6 month turning point on Princeton's Economic Confidence Model.
It should prove a major turning point - in what and high or low can't tell
yet.
HW: It is the day after a "surprise?" FOMC announcement. BTW this moon
is in perigee and so will appear enormous and also occurs on the day of
the winter solstice.
READER: Who or what is Bradley you talk about in the USA?
HW: He was an astronomer who hid his astrological studies under the
pen name Donald Bradley. He wrote STOCK MARKET PREDICTION in 1950 proposing
a financial astrology model derived from the current planetary positions.
Today, we refer to them as Bradley dates. The last 3 dates were 10/18,
11/11-12 and 12/2 - Two out of three turn points to the day!
READER: Although technology and telecommunications mutual funds are
still doing well, do you think now is a good time to sell out and hold
cash until early next year?
HW: it is my belief that they are unbelievably risky. For my
clients we sold, albeit early. We have few positions in those sectors,
but would buy on a REAL dip. I would rather avoid and be more conservative.
READER: Have been reading your reviews for a while. Being a bear, I've
agreed with your predictions but they aren't being proven in the marketplace.
What are your thoughts? Wait? Also let me know more about your services.
I am not a sophisticated investor.
HW: I would recommend either direct Money
Management services or a silver
Subscription. Gold/trading is appropriate only for the experienced.
As to missing the market here, we believe over the long run, it is always
better to be safe than sorry.
READER: How can you tell us to sell technology when it is certainly
THE future? Even if there is a severe correction that sector will revive.
Do you take the natal chart plus first trade chart of companies when predicting
a trend?
HW: That is like saying you never should have sold Rockefeller Center
Properties (RCP), because "Real Estate ALWAYS goes up and it is the best
property in the world." You are simply paying too much.
Ideally, one should look at both the natal and first trade chart as
well as planetary sector cycles, in addition to Fundamental and Technical
Analysis.
READER: I have just read your WSNW and fell compelled to comment.
I can't believe the way some of your critics are behaving. Firstly some
of them may as well just give someone else their money to manage. At the
end of the day we are all individually responsible for our decisions.
HW: They are not clients or generally not even subscribers, but readers
on the net. I like to show the zeitgeist of my mail. I am comfortable
with what I do or I wouldn't publish it.
READER: Are you still bullish on this stock (IHI)?
HW: I am holding it with cautious optimism and buying for a few clients
at these bargain basement prices.
READER: Why is IHI not moving? I guess I know. I have a
problem with the way they have published their view of the facility progress.
HW: Yes factory progress is abysmally slow. Well I suppose
good things take time. :)
READER: I believe you are harming others more than helping others....
HW: I do not agree that recommending caution in insane times
is harmful. I am proud of our superior Stock
Picking. I doubt avoiding the financial and technology stocks is bad
advice. Time will tell how much harm is being done, but I will continue
to make those recommendations. We always hate to lose an old time subscriber,
but hope you will do well in the next years financially and otherwise.
READER: I was surprised and happy to see Corel [CORL] as one of your
Tech Stars. I only have as good gut feeling about Corel and was hoping
you could supply more info on why you like Corel.
HW: I like Linus, but would have sold CORL at current prices.
Alternately, Corel is one of the reasons our conservatively balanced 1998
UIT was up more than 170% if held to date.
READER: I think us readers may have been ambushed at Credibility Gap.
At some point, the stock market will decline, but could you tell me when
the stock market experienced a correction in the month of December or in
a presidential election year? NEVER. The stars imply, they do not
lead.
HW: How about 1899 when the Dow sank 21.2% from 73.03 on December 7th
to 58.27 on December 18th? Also, in the last 176 years, the market
has been a loser in 6 out of the 7 final years of the second terms of lame-ducks
presidents.
It is my opinion that the stars LEAD, but man does not always follow.
Subscribers please send your comments, questions and suggestions to
Letters.
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in YOUR future?"
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