Last year I predicted:
1. Housing would recover in 2012. I was right and housing starts jumped by 21% from 708,000 in November 2011 to 861,000 in November 2012.
2. I predicted interest rates on the 30-year would increase 20% by the end of 2012, and be at 3.60%, up from 2.98%. The 30-year ended at 2.95%.
3. I predicted Romney would win, the Democrats would retain the Senate and the Republicans would retain the House. Two out of three isn’t bad!
4. I saw a good, but volatile year for the S&P in 2012. The S&P ended up 10% from 1,300 to 1,430.
5. I thought Facebook (FB) would be the stock story of the year and would perform well. It certainly was the stock story of the year. As for its performance, its closed 2012 at $26.55 down 30% from its IPO price of $38.
6. On the sports front, I was sure Green Bay would win the Super Bowl and LSU the BCS. I’m glad I wasn’t in Vegas, since who could have predicted the 9-7 Giants would run the table and Les Miles would coach the worst game of his career. (Only to be topped by the recent LSU debacle at the hands of Louisville. Who calls two pass plays on 2nd and 2 when you’re trying to run out the clock?)
7. Finally, I predicted a major scientific discovery. I am going to take a push on this one, since I believe I am right, but don’t want to let the cat out of the bag. I believe there is a Company that may have a breakthrough in cancer diagnosis.
With 2012 in the review mirror, here are my predictions for 2013:
1. Housing will continue to recover. Some markets will see a significant jump in activity. I expect housing starts to top the 1 million mark by the end of 2013.
2. I am taking a mulligan on interest rates and again expect the 30-year to be above 3.60% and wouldn’t be surprised if they hit 3.75%.
3. Since there are no elections in 2013 (thank God), I predict that Obama will actually move a little closer to the center and Congress will narrowly avert crisis after crisis, with little or no long term solutions being accomplished.
4. The S&P will again have modest but less volatile year, and will end up at 1,544.
5. The story stock of the year will be the small and micro caps. Despite the Russell 2,000 (RUT) 14% gain in 2012, many of the smaller stocks have vanished into oblivion in recent years due to lack of liquidity and overall market concerns. Money will come off the sidelines and into equities, which will help the smaller less followed names.
6. The BCS is over and you will have to believe me that I did predict a 34-14 win by Alabama (I just didn’t get this published in time). As for the Super Bowl, I think San Francisco will meet New England and the Pats will win by 27-17. Also, Jadeveon Clowney (#7 DE for South Carolina) will win the Heisman Trophy, and every other major award in college football. He will be ranked as the consensus #1 NFL draft pick for 2014.
7. I am taking a push on last years #7 prediction. In 2013, there will be a major scientific discovery in the battle to fight cancer. Lets all pray I am right.