© Henry Weingarten Last Updated:

Some of the following material has been serialized in our newsletter WALL STREET, NEXT WEEK and our premium channels.  It was posted first to WSNW subscribers on 11/14 and will be updated publicly at our 9th Annual Astrology and Stock Market Seminar, May 17-20, 2001, in New York City.
Note: Hyper links that are prefaced with a S:, G: or P: are restricted to WSNW Subscribers.

There are 3 new primary phenomena affecting world events and global markets in 2001:

• January 20 inauguration of a new US president.
• The Solar Eclipse on the Summer Solstice June 21, 2001.
• New Stock Exchange (new Bourse horoscopes) to be born such as Euronext, Jiway, International Nasdaq and LSE alliance mergers.

Continuation of three BIG TRENDS begun in 2000:

1. MORE REALISTIC STOCK VALUATION (Jupiter/Saturn)

• Short term out performance of value stocks/funds vs growth stock/funds. Intermediate term best performance will be value stocks (Saturn) that also are growing (Jupiter).
• Lower P/E valuations, but higher than historic norms which are slightly above DJIA 6000 and 2000 for Nasdaq.  This picture started changing due to the Jupiter/Saturn conjunction in May 2000. Earnings and real business prospects now matter. Hence stock forecasting will become easier and somewhat more rational.


2. DOLLAR DECLINE ACCELERATING IN 2001
The secular US$ rally is over, having ended with two peaks, one in May 2000 and one 6 months later.  If you liked $10 Oil, then you will love the Euro .87-90!

3. JUPITER/PLUTO and SATURN/PLUTO
These aspects plus new FASB rules forecast more failed mergers and corporate break ups. Politically more anti-globalization protests.

Fundamentally, for the stock market in 2001 to reach their 2000 highs is unlikely for Nasdaq. DJIA may close slightly positive on the year, especially if there is talk of future permission of some social security and/or greater tax sheltered funds into the market.

Capital Preservation will continue to be important  for global investors for most of  2001.  2001 investing demands extensive portfolio evaluation, diversification and more frequent trading in order to obtain very positive results.  Global money flows will no longer exclusively favor the US.  Eventually, however, the markets should have a year end rally above 10,000 and Nasdaq above 3000. 

VALUE WITH GROWTH
Just as stocks with 200 P/E are taboo now, so too will the 100 P/E stocks be next year.
We don't expect a single "parallel" market crash, but continued sequential ones - with more overpriced stocks dropping 20-30% in a day on "bad" news.
Our advice: Buy good stocks AFTER bad news, NOT before.

INVESTORS SHOULD BUY AND HOLD STOCKS IN 2001 THAT ARE:
1) Profitable,
2) P/E under 33 for TMT (Technology, Media, Telecommunications); 22 for others,
3) Less than 25% over Morningstar Value.

The Horoscope is a MAP of TIME and PLACE - here is a brief overview of selected global markets:

EUROPE - Relative strength in North Euroland & Euro strengthening by 2002

• GERMANY -  Blue Chips [EWG] outperform as German behemoths domestically split up and merge/acquire globally. [Pluto/Uranus in 2001 followed by Jupiter in 2002.]
• HOLLAND - Continues to be one of three favorite countries in 2001.  Strongest positive influences and the Euro rallies will make this the star performer we have long been talking about. By 3rd quarter of 2001, we may begin selling into strength.
• ENGLAND - We find better value elsewhere.  Our rule of thumb is that we must find at least a 10% premium to domestic stocks, e.g. Pearson (PRSNY) while a good media company is no better than the NY Times (NYT).  However, our view of the city  changes for the better in 2002 and perhaps sooner depending on the new iX horoscope.
• AUSTRIA [EWO], due to economically sound government policies, will outperform.

NORTH AMERICA - Traders paradise

• S: CANADA - Invest here for increasing prosperity in 2001-2002! The Canadian Dollar is a great bargain and will outperform US Dollar by 2002.
• MEXICO -  While certain international stocks, e.g. CX, will perform well and it continues to benefit from NAFTA, we prefer to wait and see how its new president performs.
• UNITED STATES - Generally overvalued versus global counterparts. Top stocks having value will perform, many others will disappoint. US Bonds attractive mid 2001 and stronger in the Fall. (Foreign investors may wish to hedge the US currency.) The US Dollar remains a ticking time bomb before January 2002: It is no longer as safe a haven with new competition forthcoming from the EURO in 2001 and perhaps even gold.  However, since one can trade stocks here for 10-25% appreciation/depreciation a day/week, this remains TRADER'S HEAVEN.

 

• We are beginning to like Japan and will start buying [EWJ] on dips, especially if/when the Yen is weaker than 111-115. We prefer exporters e.g. Sony (SNE),  Matsushita (MC). Ideally we are hoping to see the Nikkei 225 at 12,222.  If so, we will buy with both hands, as JAPAN INC may be one of our favorite 2002 countries.
• HONG KONG/CHINA -  Political problems/potential violence in 2001! Add to this the fact that most of the mainland's industries are a mess and China's horoscopes are "challenged". Therefore, we continue to recommend AVOID.  Despite a good economy, we  would reduce any exposure to Taiwanese markets unless fully compensated for the extra risk.
• KOREA- Buy select, non-bankrupt :), companies such as Samsung Electronics (SSNGF). A MAJOR peace dividend is expected in 2001/2002.
• INDIA- The most money to be made by insiders.  Buy bargains if/ when you find them.

OTHER- Opportunities for savvy investors ONLY.

• AUSTRALIA - We are neutral until 2002, however, eventually the Aussie dollar will appreciate.
• ISRAEL - Israel's technology sector will continue to outperform given its highly skilled labor force and favorable tax treatment.  However, like the US, it remains overvalued and bargains are hard to come by. Unfortunately it is best to buy only when there is blood in the streets.
• RUSSIA - If/when there is a rule of law, many attractive high risk/high reward opportunities will present themselves.

As long as it remains an open question whether a "soft" landing can be engineered or whether a "hard" crash is inevitable sooner or later, we continue to recommend avoiding emerging markets.  In 2002, the global investing landscape may be dramatically different. 

Despite the fact that we do live in interesting times, we continue to repeat our mantra:
BORING IS GOOD and VALUE plus GROWTH IS BEST.
Old-line technology companies such as IBM, Rockwell (ROK), Texas Instruments (TI) and United Technologies (TUX) will be relative safe heavens in 2001 and generally outperform.
Traditional safe heavens such as Real Estate and Utilities are tradable, but may give occasional sleepless nights.

Cosmic markers that began in 2000 that will finish in 2002:

• The final pass of Jupiter opposite Pluto is May 6, 2001 for new M/A accounting rules and zeitgeist.  This is midway between the Jupiter/Pluto conjunction of December 94 when "whales first started swallowing whales" and December 2007 when retiring baby boomers are forecast to exit markets en mass.  Sectors such as Biotechnology, Robotics and Successor Energy will continue to march forward to center stage.
• The first two passes of Saturn opposite Pluto are August 5 and November 2 in 2001 and May 26, 2002.  In addition to increasing opposition to merger mania and globalization of the World Bank and IMF, how many pieces can ATT, BT, etc., split themselves into?

INTERMEDIATE TERM

An early [December] and late [February] "January effect" in the Technology sector even more than small caps.  Nasdaq is likely to both outperform AND underperform the DJIA depending on which months you are looking, i.e. more Traders Heaven.

We recommend high cash positions for the 2nd quarter of 2001. Post tax time April will be punishing indeed for aggressive portfolios. We expect that tax revenues for both individuals and corporations will disappoint budget surplus calculators.  Consider yourself warned and act appropriately.

We will discuss the post summer solstice Solar eclipse markets in our May 2001 update.

LONGER TERM

No one can postpone the date of the next total eclipse of the Sun, which will take place on June 21, 2001, in turn followed by Saturn opposite Pluto on August 5, November 2 and May 26, 2002 (Key Pivot month).
As we move to 2003, Saturn goes over the US Sun and the low point of the nodal cycle is reached in 2008.  December 2007 we have Jupiter conjunct Pluto, followed by Jupiter conjunct Neptune in 2009 and Jupiter conjunct Uranus in 2010.

• Construction
• Consumer Non-Cyclical
• Defense*
• Education
• Utilities
• Bonds**

 
• * A clear money manager favorite, but our SRI leanings do not incline us to buy for clients. This Saturn/Pluto theme may also be played with Safety stocks such as LoJak (LOJN).
• Jupiter enters Cancer in July 2001. It will help "boring" consumer noncyclical (IYK) as food companies such as Ahold (AHO) or Hain (HAIN). Other potential Cancer themes include Home Depot (HD) and ocean hospitality such as Carnival (CCL)
• There is still some relative value in transportation stocks such as General Motors (GM), Volkswagen (VLKAY) with its Euro kicker and Honda (HMC) for its strong SRI pro environment products.  Internet beneficiaries Fedex (FDX) and UPS should be bought near value.
• ** We believe there will be at least one more US interest rate hike early next year, so we are relatively cautious to negative on US Bonds for the First Quarter 2001. Thereafter we recommend some accumulation, but  foreign investors may need to hedge periodic US Dollar under performance in 2001-2002.

I begin with one or more of the following 4 criteria:
A. FALLEN ANGELS: 68-90% from 52 week HIGH or near 52 week LOW
B. CASH RICH, not stock rich (Survival of the Fittest)
C. UNDERVALUED using Business Appraisal methodology e.g. Morningstar
D. GOOD HOROSCOPE or in upcoming COSMIC SECTOR Theme:
    1) Jupiter/Saturn conjunction (Value plus Growth)
    2) Jupiter in Cancer
    3) Saturn/Pluto opposition

FAVORITE 2001 STRATEGY HEDGING:
BUYING STRONG STOCKS/MARKETS and SELLING WEAK STOCKS/MARKETS

• Positionally, we hedge by shorting the SPH and buying strong stocks/sectors or by buying the SPH and shorting specific stocks/sectors  which should do poorly both from an astrological and/or technical viewpoint.
• Initially, European stocks will rise and fall in sync with US markets. However, later this year, as Euro appreciation becomes a secular trend, global outperformance will result in Euroland.

1. The S: Netherlands remain a favorite 2001 country as it is the single best European country to prosper in a borderless Euroland.  This is due to both historic reasons AND the horoscope of the Dutch Stock Exchange, as well as the individual charts of Phillips, Amro, Unilever, etc.
Buy EWN (Netherlands I-Shares or Webs) or select companies:

• Netherlands (EWN) : Unilever (UL), Philips (PHG) and Ahold (AHO)
• Germany (EWG) : Deutsche Telecom (DT), Deutsche Bank (DTBKY) and Bertelsmann (BTGGga.DE).
• Japan (EWJ): Upon weakness, accumulate Kyocera (KYO), Matsushita (MC), Sony (SNE) and Honda (HMC).

3. S: DJIA FAVORITE 2001 stock, i.e. hold/buy on an intermediate-long term on a relative basis is IBM.  As we expect relative mediocre performance of Dow Stocks and Diamond Index (DIA), Blue Chip stocks will have to be traded, not bought "buy and hold" for better than single digit returns in 2001.  Possible exceptions are: General Motors (GM), T  [Best performance for both likely in first quarter].  Second quarter on weakness, we plan on buying  Home Depot and possibly General Electric (GE).

• (1) High possibility of a Philip Morris break up in 2001 will do wonders for its stock price. We maintain our 2001 price target of 42. Longer term trends, however, are disturbing, e.g. Air France banning smoking on its flights.
• (2) Microsoft (MSFT) continued battles until next year's conference, although a strong buy by Fall 2001.
• (3) T is sad, but we maintain our 12 month price target of 42, although perhaps as a buy out candidate. :(
• (4) Most likely replacement for Honeywell is Cisco.

S: APPLIED ROBOTICS: e.g. Int. Hi-Tech Industries (IHITF)* and Robotic Vision (ROBV)
BIOTECHNOLOGY: e.g  Celsion (CELN) and StemCells (STEM)
SUCCESSOR ENERGY: e.g. Nuvera (NVRA) and Evergreen Solar (ESLR)

*5. AFUND CLIENTS
Business Astrologers know that the best way to predict the future is to create it.
With strong disclaimers and with an obviously biased view, I am doing my best to help create investor wealth for companies we now consult for, e.g. International High Tech Industries and Cancall Communications.