Overview of Forecasts

08.09.2002

So, as can be confirmed by checking the Archives, the following announcements were made in the monthly "News" on :

31 December 2001

• Upward trend, prior to the 11 September 2001 attacks, for shares in sectors such as :
  
  
  • Defence, for instance Northrop Grumman Corp., Lockheed Martin
  • Construction, for example Caterpillar
  • Banking, with Morgan
  
  
• Private investors maintained the same patterns of choice of shares both before and after the 11 September 2001 attacks, in the Netherlands, Hungary, Italy, France, Sweden, and the U.S.A.

This prediction was borne out by events !

27 January 2002

• The principal tendencies for the next few months would rely on "military shares", favouring stocks in companies in the American defence sector, such as:
  
  
  • Northrop Grumann Corp., Lockheed Martin, Boeing (military), L-3 Communications Holdings Inc.
  • Raytheon Corp.
  • Rolls Royce (civil and military), in Europe: satisfactory results
  
  
• Growing problems for Telecommunications Companies over the course of 2002.
• A fall in Japanese markets

This happened as predicted !

28 February 2002

• Good returns, particularly in the leading sectors, essentially :
  
  
  • Industrial products
  • Financial services
  • Mines and metals
  
  
• A moderate upswing in the economy, despite the 11 consecutive rate cuts decided by the American Federal Reserve (FED) during the course of 2001, leaving interest rates at their lowest level for 41 years.
• A decline in world tourism, already visible in 2001 (WTO), continuing.
• An increase in the price of gold, from US$285 an ounce. It reached US$323.90 per ounce in July 2002, with the year 2002 far from over.
• Major economic and geostrategic events expected for the months of April-May-June 2002. No comments needed !

These predictions came true !

One that has not so far:

• Shares in Nortel Networks would climb back to the US$15 to US$20 level by the end of 2002. However, 2002 is not over yet.

30 March 2002

• "Structurally strong" companies :
  
  
  • Northrop Grumman Corp.
  • Lockheed Martin
  • Caterpillar
  • Microsoft System
  
  
• "Structurally weak" companies :
  
  
  • Nortel Networks
  • Sun
  
  
• A drop in investments by telephone companies.
• A fall in telecommunications equipment manufacturers and telecommunications operators (decreased investments)
• Uncertainty in the telecommunications market
• Imminent Western military action or reprisals against Iraq (American and British raids)
• Joint occurrence of the majority of explanatory factors that would permit conflicts to appear.

Predictions confirmed !

30 April 2002

• "Collapse" of stock markets, all round the world.
• The economic upturn in the United States would have a very cautious feel to it, especially as household wealth was tending downwards.
• Fears of disruption of supplies of crude oil from the Gulf.
• The present level of crude oil prices would certainly encourage a sort of tacit tolerance of flouting of quotas by oil-producers that are members of the Organisation of Petroleum Exporting Countries (OPEC). The real out-turn of this prediction can be noted - on 6 September 2002 the Energy Information Administration (EIA) stated that the OPEC quotas would be exceeded by October 2002, even if OPEC decided not to increase these production limits during the current month of September 2002 (19 September 2002 meeting, more to follow). This grouping will over-run its official limit for production by nearly 2 million barrels per day (bpd) in October 2002. OPEC should continue to step up production in order to prevent prices from topping US$28 per barrel.
• Reinforcement and development of basic computing and of computer-based decision-making.
• Growing problems for the Telecommunications Industry, affecting firms like :
  
  
  • Ericsson
  • Lucent Technologies
  • WorldCom Corp. (bankruptcy)
  • Qwest Communications
  • AT&T Corps.
  • BellSouth
  
  

All these predictions were borne out by events !

31 May 2002

• Declining profits among American businesses.
• Major American indices showing "red numbers" since the start of 2002.
• Collapse in NASDAQ share prices.
• Growing external debt of the United States.
• Rise in share prices for companies such as :
  
  
  • Northrop Grumman Corp.
  • Lockheed Martin
  
  
• Price of an ounce of gold nudges US$320 on 23 May 2002, confirming February prediction.
• Investors bale out of hi-tech shares, taking an interest in stocks relating to raw materials or basic supplies.
• Climbing unemployment rates in the U.S.A.
• Appearance of new critical economic and political situations in Argentina, Venezuela, Colombia, Brazil, Peru, Ecuador.
• Stock markets strapped for cash.

Predictions confirmed !

30 June 2002

• Financial scandals in the United States, Canada, France, Japan, and elsewhere.
• Downwards spiral in prices on stock markets worldwide.
• American upswing lacking vigour, with no inflation, but not creating new jobs, and with a drop in retail sales.
• Crisis of confidence among investors.
• The price of many shares going lower and lower.
• The Euro, often outperformed by the U.S. dollar since the former's birth in 1999, could well get back to parity with it by the end of the year 2002.
  This has already happened !
• Increased production of crude by the OPEC cartel envisaged before September 2002. This is actually happening now, because the amount over quota was 1.5 million barrels per day (bpd) at the start of 2002, but OPEC will exceed this official production limit by around 2 million barrels per day (bpd) in October 2002, if not before.
• A climate of uncertainty reigns in international affairs !
• Relative calm between India and Pakistan over Kashmir.

All the predictions have come true !

31 July 2002

• Crisis in the Middle East.
• Terrorist threats.
• Abysmal profit performance by businesses.
• Lack of confidence in the banking sector, affecting both lenders and borrowers.
• The inexorable decline in share prices on the stock markets will cause a slowing-down in the economic recovery.
• Investor confidence shaken in the aftermath of accounting irregularities and misappropriations of funds in a number of high-profile companies.
• The price of an ounce of gold hit US$323.90 on 8 July 2002. (A "safe haven" for investments)
• Good tone in the area of Information Technology (For example: Taiwan)

Borne out by events !

31 August 2002

• Accumulation of unfavourable economic indicators, in step with the dropping share prices on American and European stock markets.
• Fears of a relapse in the American economy.
• Shaky prospects for the world economy and company results.
• The American economy in the doldrums.
• The FED kept its base rate at 1.75% on 13 August 2002, as predicted in the "News" for 31 May 2002 (See report N° 17).
• The Japanese economy remains weak and heavily dependent on exports.

Once again, predictions confirmed !

Since the first OMG/GWO S.A. Inc. website came on stream on 6 January 2002, the Feast of the Epiphany, 254,000 hits have been recorded to date. Many thanks for the interest you have shown in them !

08 September 2002

Marc LAMBINET, Ph.D