Coming Year Appears Star-Crossed

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The New York Sun

Wall Street’s bulls, as most investors know, vastly outnumber the bears. The problem, though, is that the heavens are making it loud and clear the bulls are going to be gored.


That’s what I get from a fella who made a series of uncanny market calls this year. He’s Henry Weingarten, skipper of the Astrologers Fund, a 27-year-old New York-based private advisory service for professional investors that tracks planetary movements. Also factored in are fundamental and technical market trends. Here are some of his forecasts:


* On March 7, with the Dow at around 10,950, Mr. Weingarten predicted a major market decline. He was right on the mark. About six weeks later on April 21, the Dow tested the 10,000 level.


* On April 21, with the Dow hovering around the 10,000 level, he predicted a sizeable May rally. Bullseye! May boomed as the Dow rose about 500 points.


* On April 21, with gold in the $400s an ounce, he reiterated an earlier forecast that the precious metal would be the year’s major investment play. It was another home run. As gold subsequently topped $500 an ounce, in the process surpassing a 23-year high.


How did he manage to make such uncanny forecasts? “I saw it in the stars,” Mr. Weingarten says.


The obvious question: What are the stars saying about 2006? Wall Street, as I’ve reported before, is overwhelmingly bullish on next year’s prospects, as is the public. Up-to-date indications of such investor sentiment can be seen in the latest mutual fund numbers. In the past couple of weeks, investors, clearly on an ongoing stock-buying binge, snapped up $11.1 billion worth of equity mutual funds, about 30% more than they did in the prior two weeks.


A pretty dumb thing to do, according to Mr. Weingarten’s calculations. He projects a hellish 2006 market, especially so in the first half. In this period, he sees the Dow, which closed yesterday at 10,889.44, falling well below 10,000. Likewise, he expects the Nasdaq, which closed at 2,246.49, dropping well below 2,000 in the same period.


“To buy aggressively now is not dealing with reality,” he tells me. “You’ll be able to buy a lot more cheaply in six months.”


Astrologically, the picture is very negative, he says, with the two business cycles, Jupiter and Saturn, at a 90-degree angle of each other and currently clashing. While this may sound like gobbledygook, Mr. Weingarten’s recent forecasts have been so on the money that he merits a respectful hearing on his planetary predictions. Currently, some of his other disturbing predictions run as follows:


* With the economy and earnings growth weakening, a recession in 2006 or 2007 is highly likely.


* A crisis, in the form of a debt bomb, is on the way, maybe triggered by a hedge fund, General Motors, or a municipality.


* The dollar should soon weaken again, led by the cessation of interest rate increases, a tremendous trade deficit, and insufficient taxation. “We’re spending money we don’t have; it’s a fiscal irresponsible policy,” our bear says.


* Look for a rash of real estate bankruptcies across the country.


Adding to the market’s woes, Mr. Weingarten figures, is the plight of the incoming Federal Reserve chairman, Ben Bernanke, whom, he thinks, is in a pickle. “If he raises rates, the real estate market will fall apart,” he says. “And if he doesn’t, the dollar will fall apart.” It’s a case, he adds, that “he’s damned if he does and he’s damned if he don’t.”


To our bear, the game plan for investors is clear: They should strive for liquidity and safety. This means, he says, raising cash, getting out of margin, and reducing debt as fast and as much as possible. He also thinks they should protect themselves against a skidding greenback by buying foreign stocks and taking a 10% to 15% stake in gold and silver. Gold, he reckons, though recently struck by some profit taking, is still in a rising trend and should hit $800 an ounce in two years.


Mr.Weingarten, it should be pointed out, is by no means predicting the sky will fall, rather that it’ll soon turn black.


The New York Sun

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