1997 Stockmarket Forecast

The first Quarter of 1997 is an astrological delight with a major astronomical event each month: January 9th: Jupiter conjuncts Neptune February 15th: Jupiter conjuncts Uranus March 8th: Solar Eclipse The first is most responsible for the speculative bubble of current markets (Neptune keyword: unrealistic, Jupiter: Optimism). It celestially marks the beginning of this end. Specifically its rulership extends to the extreme valuation of Drug stocks and Entertainment stocks which I believe will decline. Jupiter/ Uranus (High Tech) will likewise begin to reduce the extreme technology sector multiples. Investors will less often hear such post IPO frenzy as when one analyst no long ago projected Netscape to soon become a $1000 stock. The March Eclipse, well this is the key trigger for our date March 11th call. (For a preview of the next major market paradigm, (Jupiter/Saturn conjunction in 5/28/00) see my book INVESTING BY THE STARS). In 1972 the DIJA first reached1000; 25 years later it is more than 6 times higher. Many money managers believe a 10,000 DIJA is inevitable by the year 2000. "Bears" foresee a 15-25% correction first, and then the next inevitable rally. I find that very scary; Why? Do you remember the Real Estate mantra of 1980's : BUY BUY BUY; Real Estate never loses, always goes up 10-15% a year. IT IS NOT DIFFERENT THIS TIME!!!!!!! The BUY AND HOLD STOCK/MUTUAL FUND MANTRA will meet the same fate! In 1997, Investors will learn: 1. To sell on rallies, instead of buying on dips. Markets can go down -- First quarter worst but rest of year no clebration. 2. Money managers don't only buy and hold -- they also rotate stock holdings merciliously. Last year's winners often become dogs in the future and vice versa. Similarly, many of the best performing stocks and funds of 1995/96 (eg, index funds, hign tech momentum stcoks and the new nifty fifty) will perform poorly in 1997. Imagine the effect of negative Cash inflows (redemption's) in today's overvalued market. Couple that with some poor profits in the next earning reporting period and what have we? Well, I would predict another recession (having called the last one- beginning/end perfectly and documented by Barron's) except the new "1984" government reporting will not substantiate it. So lets just forecast under 1% growth first half of the year. There are two potential caveats that might delay but not postpone the inevitable: 1.Replacing social security with compulsory private savings that could be invested in stocks and bonds. 2. The "1984" revision of US inflation numbers to keep Bond holders happy as the Japanese begin to exit. So here are my six potentially winning investment strategies for 1997: I. Sideline for value. II. Hold and defend. III. Diversify IV. Hedge V. Short like Hell VI. Trade don't invest If you would like more information on each of these strategies, please see my 9 page 1997 forecast posted on our website Naturally the SEC and I must advise you to do your own research and also to check with your licensed financial advisor or broker before enacting any of them. However, hopefully in 1997, the Astrologers Fund will be offering our Jupiter (growth), Saturn (value and income) and Pluto (Hedge) funds publicly by which time you may fully profit from all my cosmic wisdom.