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Sunday, January 2, 2011

Closing out 2010

Well, 2010 is here and gone. Lets see how I fared in my "2010 predictions" post.
I have reposted the content below, and made the original text italic. My comments are added below.

By my own judgement, out of 8 calls, here are the results.
1 Complete fail
4 Correct calls
3 Partial correct calls

Not too horrible. And honestly, how many readers thought What I wrote would happen?
Onto 2011 predictions in another post!
See 2010 summary/analysis below.

2010 Predictions

I made quite a few very specific predictions last year. This year I want to try something different. That is, to make a few general broad statements of where I think the markets will be 1 year from today.

This serves two purposes. One to provide a clear, concise view with less confusion in the predictions. Two to mimic what most people are trying to do, and that is pick a place to put some savings into.
  1. 2010 will reach a crisis in the US bond market. Interest rates will (if not already) become a concern and will need to be put in check. Rates will over all drift higher, squeezing the life out of the US government and economy. Rising rates will apply downward pressure on housing.
    a) Disclaimer: US rates will NOT be a concern if the US stock markets collapses in 2010. We are talking down for the count collapse.
    >> Complete FAIL on this prediction
  2. US stock market will be lower on 12/31/2010 than 12/31/2009. Guesstimate is a wide range, SPX 1,000 to as low as 500. Since that is pretty ridiculous range, I'll choose 750
    >> Partial correct. the 2010 low was 1,010. I'll call that a hit, (I said 1,000 as top end).
    >> But the market ended higher. Started year about 1125, ended 1257, for a 11.8% gain.
  3. Inflation, despite everyone's concerns will NOT manifest. However, Currency devaluation is possible, and that would be reflected in higher commodity prices. US Dollar gains strength first half of 2010 in general, and loses strength, in general towards end of 2010. US Dollar remains above the lower trend line, as depicted here (click) for 2010.
    >> Correct call. Dollar rallied, then pulled back hard. And it remained in the trend area.
  4. Precious metals (gold) will have major valuation issues between Q1 and as late as Q3, but should firm up between Q2 and Q4. I am very sketchy on time line, since precious metals valuation turn around will depend on US dollar, interest rates, and stock market fear.
    >> Correct call. Gold firmed up in August, and has made a huge run up
  5. With that said, Gold will end higher at the end of 2010 than current levels or at the very least rising rapidly to surpass current levels. (from it's low)
    >> Correct call, kinda duplicate to #4.
  6. US economy will NOT rebound, and will be in a quagmire of problems straight through 2012 and beyond.
    >> I believe this is a correct call, despite the pundits. Official unemployment is about 10%, real is closer to 20%. The Federal Reserve bank has announced more fiscal recklessness of printing, banks still don't have honest accounting. Government is over-spending to hold things above water. This is hardly a rebound, more like a drug fix to give pain relief.
  7. There will be major crisis in 2010, including, but not limited to: State(s) faulting on debt, counties failing (avoided in 2009), more countries failing, and in general, increasing unrest in the world (wars, terrorism, etc)
    >> Partial correct. We have seen Ireland, Greece under severe pressure. We have seen California and other states insolvent. Recently, we have seen states like Illinois call for bankruptcy of cities. However, we haven't seen a blow out like I expected. Band aides are holding back the dam from breaking. So no major crisis in 2010 per say.
  8. Protectionism will continue to rise (tariffs, refuse to trade, etc)
    NOTE: This is one potential event to destroy stock market valuations.
    >> Partial correct call. For the most part, to my surprise, it is mostly China starting to do this. I did expect more countries. China is hitting with various quote limitations on exports of commodities, but mostly concentrated on rare earth minerals.
this list is pretty broad. But it covers 8 specific points that can be judged on. Items 7/8 are a little squishy, but I should be able to look back to judge.

Feel free to put in the comments your own 2 cents, and I'll try to add them to my end of 2010 summary.

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