February 26, 2002

Investor Profile: Savant Crawford reads cosmic tea leaves

By Haitham Haddadin, Reuters.com

NEW YORK, Feb 26 (Reuters) - Like any market watcher worth his salt, Arch Crawford checks out pie, bar and line graphs. But the veteran financial wizard parts company with Wall Street when he charts the stars.

Crawford is a financial astrologer -- who marries tenets of market analysis with the alignment of the planets and their impact on humans, and ultimately stock prices.

"The only fundamentals I look at are P-E (price to earnings) ratios, and I keep a lot of technical indicators," he told Reuters from his Tucson, Arizona, home. "But when the market is not following technical priorities, I immediately look at the sky."

By many accounts, the 60-year-old Crawford, who has published his monthly "Crawford Perspectives" newsletter since 1977 and runs a hotline for stock tips, is the best of the bunch. After all, he is credited with prescient calls like forecasting the October 1987 crash.

Don't laugh! That 1987 call was partly pegged to a rare stellar formation the savant saw: the sun, moon, Mercury, Venus and Mars clustered tightly. To astrologically-savvy civilizations like the ancient Mayans it spelled trouble. Crawford promptly warned the sky would fall over Wall Street.

Ditto for his inspiration for another accurate call, the current bear market. That came from a huge planetary alignment in May 2000: Saturn opposite Pluto. This pointed to a decline in economic activity and Crawford warned his readers "a Bloody Bear Market will be evident" six to 18 months forward.

"The astrological stuff that I do is all statistical, it is as scientific as any non-astrological work that I do," Crawford said in the Southern drawl of his North Carolina roots.

DELIVER IT TO MY HOME, PLEASE

The bulk of Crawford's advice is "market timing" -- when to be in or out of stock, bond and commodity markets and identifying major turning points based on technical indicators.

Crawford also has made good calls on individual stock picks. He recommended investors buy into gold mining stocks such as Newmont Mining NEM.N in April 2001 -- the stock rose from about $16 to nearly $24. The pundit is bullish on the shiny metal itself, believing its long-term bearish cycles have turned and will be up for years.

Top rated financial publication Barron's has called this stargazer the "Best astrologer on Wall Street" and Kiplinger's Personal Finance magazine has raved about his track record. Timer Digest magazine, which tracks scores of market timers, named him the 1992 Long Term Timer of the Year and put him on its June 2001 cover.

"He has not beaten the market but there was a five-year period when he was one of the better (market) timers," said Mark Hulbert, publisher of Hulbert Financial Digest, which tracks newsletters and has eyed Crawford's work for more than 12 years.

Some 2,000 people, including top Wall Street hedge fund managers, subscribe to Crawford's $250 a year newsletter. The astrology bit is why many subscribers prefer to receive it athome, not the office.

"They don't want people to know that they take the newsletter because of the esoterica," Crawford laughed. "They don't want people to think they are some kind of nut cases."

HOOKED ON THE STARS

Crawford, born in Oxford, North Carolina, got interested in stocks by watching his father reading the newspaper page to see what his Reynolds Tobacco profit-sharing was doing. He bought his first stock, insurance firm Allegheny Corp. Y.N , in 1957, and turned a nice profit.

He worked at Merrill Lynch in Raleigh, North Carolina, marking the chalk board with stock prices, and moved to New York in the 1960s. There, he worked as a sidekick to Merrill's legendary technical analyst Bob Farrell, and got a solid footing in market analysis on the basis of stock price action.

"His reputation is as a stargazer, but I find he is just a good market timer," said Larry Wachtel, the veteran analyst at Prudential Securities. "To say that if the planets are of a certain alignment then the market will do this and that, I fail to see where he has demonstrated anything along those lines. But I find some of the calls he makes are very prescient."

Crawford got hooked on astrology after reading a Wall Street Journal article about U.S. Navy World War Two veteran financial astrologer Lt. Commander David Williams, author of the 1982 book "Financial Astrology."

"He was predicting the market using astrology and doing a very good job of it," Crawford said. "I was young and impressionable and I was looking at anything that had to do with predicting the stock market."

Crawford has no formal university degree but has seven years of higher eduction in physics, math, finance, accounting and psychology at three universities: The University of North Carolina, New York University and DePaul in Chicago.

"It's like slipping off into outer space with the astrological stuff," Richard Dickson of Hilliard Lyons, vice president of The Market Technicians Association said, adding that Crawford is a good technician. "He is very unorthodox but he started at Merrill Lynch, so he is well grounded as a technical analyst."

BEWARE LATE MARCH

In early September 2001, Crawford told his readers to get out of stocks, warning the market may crash by Oct. 5. Stocks sank to three-year lows by Sept. 21, in the wake of the devastating Sept. 11 attacks on the World Trade Center.

Now Crawford is a market grizzly of the extreme kind. He warns investors the bear market ravaging Wall Street is here to stay for years. That's partly due to the unprecedented bull run in the 1980s and 1990s and stocks are likely to be pushed to bear market P-E ratios, he said.

The market is ready for a fall near the quarter's end, Crawford said. The reasons: it marks the fiscal year's end in Japan, which many see as teetering on the edge of financial disaster, and the stars are not aligning well.

"We PREDICT some kind of MELTDOWN as we approach the quarter's end, March 27-31!," Crawford wrote in a recent newsletter. "Mars conjoins the Saturn opposing Pluto while Mercury squares them all, completing a very dangerous T-Square."