will review the 2001 predictions and soon will post the 2002 predictions this tradition began in 1998 and no matter how poor the predictions are will continue. mainly for fun.
not bad in the stocks 6 positive 5 negative returns, not bad for this market, that is my spin
like last year will have updates on the stocks in the 2002 thread, at least a few.
comments are in ()
also appreciate all the positive feedback I have received since starting these predictions in 1998.
thanks
selkirk
1. The US will have little growth but no recession.
growth goes from 4% to 1%. but for a recession need negative growth for 6 months. will not happen
warning: an IMF study recently found out that out of 60 recessions in countries around the world only 2 were predicted a year before they happened. so this one is not certain.
(3rd quarter was negative and the fourth quarter will probably be to, will have to wait and see, the economy would have probably slipped into recession even without Septmber 11,2001, which caused hundreds of thousands of layoffs.)
2. Cdn. dollar will rise compared to the US dollar. now at 66.69
3. the Euro will rise compared to the US dollar
4. the australian dollar will rise compared to the US dollar (there is a theme here, the Euro rising is the best one).
( I suck at currency speculation, some of these currencies had their run, starting to believe the US$ dollar is overvalued but it still seems to be the strongest and the one that people buy in troubled times. while dumping others. next year only one currency prediction)
5. Berkshire B will (now $2354) will go over $2800 US.
Warren is starting to use his cash hoard, insurance is coming back. and people are following his every move, he is starting to be weekly news. stock climbs and soon will trade at rich premium to NAV. will add to my position if this continues ( 2 shares will be added) as soon as the first share shows a profit (another rule)
( okay it only went to $2515,closed at $2477 still a 5.2% gain, not bad considering nasdaq -19, dow-6,TSE -14%. when I wrote this owned 1 Berkshire B share was going to add to it when it showed a profit, sold the stock, my goal is a 20% year return. Berkshire is a good holding company and well run but its size and large cash component make me feel it will be hard to achieve 10%+ returns, even Warren believes past growth will be harder because of the size. good for conservative investors. who are happy with 5% growth )
6. The Fed lowers rates 75 basis points on the year.
(correct; they lowered rates a great deal more, the economy was weaker and they moved aggressivley, also the events of 9-11 caused the fed to lower rates even more than normal.)
7. the states go ahead with a missile defense program, in the years ahead it will be seen as a waste of $60-$80 billion dollars. should really double it, goverment program.
(stated before that the money would be better spent on conventional armed forces, and security. still believe that, this missle program would not have stopped 9-11. also North Korea does not have the technology yet to hit the US, maybe Japan. still not a complete waste they did a few control tests and most passed. also the technology could be deployed in surface to air missles. these missles need to be improved a great deal to be effective. still should be spent on security and conventional armed forces. note: interesting that this was the first prediction about US defense item.)
8. oil will go below $25, bonus points= below $23.
comment= you may now expect $40 oil since I have not gotten oil correct yet in these predictions. good case can be made for $40 oil. but US economy will slow and demand should ease and supply increase.
basing this on a supply and demand situation, may be wrong. the US I now realize have no control ( and no influence over Saudis and Kuwait??)
(correct; when I wrote this people were talking $40 oil, supply and demand is the golden rule to follow, more supply and less demand, caused weaker prices.)
9. Sear Canada hit $30 a share in 18 months. now at $21.55.
note: bought 300 at $22.50, if a recession hits this will take 3 years and you will be able to buy shares at $18 maybe even $16 a share.
(wrong; stock is at $18.75 high $26.95 low $12.50 low was hit after 9-11. at $18.75 not much downside but not much upside, retailing is tough in Canada would not be a large position in my portfolio.)
10. Texas intruments comes back $47.375
note:bought 200 at $42.50, in this market do not chase, after I bought some it went to $39.50. made some good announcements and barely increases. may be able to get it below $42-$44
(wrong twice I bought this stock only to lose both times, should write a book (How to lose $2.50 a share trading Texas intruments.)
stock is at $28.66US, will come back but would wait for now.)
11. I am not a gold bug but gold goes up to $300 ($272). the US dollar weakens gold goes up. not great but better than most years for gold.
(correct; okay gold never hit$300 however $295 is close; also if you bought a gold fund out of the 19 precious metal funds in Canada 1 year return (nov 30) 16 funds had returns over 18%, only one had a loss. gold stocks for the most part had a good year, mainly picked the sector because gold bugs were sounding bearish. I am not a gold bug, do not believe in it long term, still a good year to have had some exposure to the sector.)
12. CNR comes to an agreement with CP, on partnership or a merger of CP rail. then they will look to the states after the 18 months wait on mergers is over.
I still will never understand that decission, and it was gutless, they killed the merger with BNSF without coming out and saying that. A merger can not be put on hold for a year and a half.
(no major agreements for CNR, however who cares the stock did great; as a CNR shareholder it was great to hold the boring but profitable railway in 2001.)
13. Nasdaq may go lower, before it comes back. but by the end of the year it will see 3000. nasdaq may fall to the low 2000 and even with a 1800, that would be a worse case scenario, but in this market must be considered. it does come back.
(wrong nasdaq bounced twice off 1800 but broke through, was closer to the downside than the upside. was never close to 3000 and making a run, may take a while, when people lose large amounts of money on sector it takes a while to come back to it, should have figured that in to the prediction.)
14. make it 15% gain for europe, Japan no comment, their economy is a mess. US dow 10% plus. nasdaq does 15% plus. TSE 300 5-20%. it all depends on nortel says in mid jan when they report. the market is in a bad frame so they will have to report great numbers.
(wrong; basically, Japan is still a mess, put negatives instead of pluses and you would be closer, thought a rebound would come in late summer or fall, never happened.)
15. banks, still like them, like TD and Royal Bank the best but the prices are starting to look rich, if you get a 5-10% pullback will add to my positions.
CIBC- is the bank we will track this year.
$46.50.
(correct: Cdn. banks held up and perfromed well in these declining markets. CIBC was not a bad stock to track +22% gain counting div. closed at $55.45 cdn.)
stocks (will have PE,yield, comments later)
1.CIBC +22% stock did well this year, will have to pick a good stock next year.
2.Texas Instruments buying at $45. for this.
($28.66 stated before how I lost around $5 a share on two seperate trades, believes it comes back but for now I will wait.)
3. sear canada ($21.55) $18.75 not a bad (stock but would not own to much of this slowing economy and brutal competition for the retail dollar, (watch it double next year) own a very small position.)
4. MGI $9.15 (volatile could see $7, in another forum I said like the stock not the market, it dropped, starting to like it below $10.
(well it dropped to $9,$8,$7 and it just continued started losing interest as it dropped continued, every report was just weaker on revenue, and management had no plan other than having a high cash burn rate. next year these stocks will go in a spec forum, thought techs may rebound, never did this was poor selection. stock was taken over at just over $1cdn. good thing to saved them from going broke. updated stated was avoiding this stock around $7, another reason you set stop losses and you never dollar cost on a losing position.)
5. QQQs will wait a few weeks but will start to dollar cost at this price not a bad time.
(did buy some QQQs not much, would wait until Nasdaq can go over 2200. still a good way to play the leading tech companies, did not have a great year but many big tech stocks lost a great deal more.)
6. Chase (will buy if it hits $44US
(closed at $36.55, counting div a loss of 13.8%, stock looks cheap but I have reduced my position, worried about the quality of their loans, probably will move higher still when in doubt; so I reduced the postion.)
7. Royal/TD Royal if it goes below $45 cdn. (currently $50.80) TD it goes below $40 ($46)
both are great long term holds, TD at $42.50-$45 is not bad to begin a position.
(Royal bank is up 15.88% not counting div and TD is up around 5.7% (counting div), not bad for a weak market. both are good stocks, Cdn. banks may pull back they have had a good year in general and are not that cheap.)
8. Nexfor $7.10 cdn. buy at $6.80 yields over 5.6%,
who would be stupid enough to buy a lumber/OSB company when US is slowing and tarrifs, you guessed it.....
(Nexfor closed at $7.35 and pays .40div (.10quarter) so the stupid indivual would have had a return of 13.9%. not bad high 8.45 low 6.30.)
9. Noranda base metals play buy at $14.80 yields over 5%.
note: prefer Alcan but it is up over 10% from when I bought it at $44.25cdn. hope to sell it around $55-$60 range. currently at $51.35cdn. perphaps should sell some now but will wait, if you think a recession will hit avoid Alcan and noranda.
(sold most of my Alcan above $60 ($60-$65cdn) high $73.88 low $47.25cdn closed at $57.88 still a good way to play Aluminum, have a small position, feel it could go below $50 or to $80, and that is fairly valued currently still own a small position since the company will cut $200+ million more in costs and is generally well run.
Noranda closed at $14.88 counting div a return of over 5%. high 18.15 low $13.33. if you like base metals copper, zinc, however I prefer other companies, and do not currently own the stock. thought was a decent buy at $14.80 and still has great mines, but would avoid for the next 3-6 months. would rate it a hold/sell. may be able to buy the stock below $14 next year. maybe even $12.50 cdn.)
10. Sleemans $6.55 will buy it at $6.25 not a large position. good beer company trading less than 12X earnings. worse plays. higher debt than I would like. so some risk, will post info on this interesting company.
someone I new had a sleemans honey brown and that is now their favorite beer, must hope for HOT summer.
(Sleemans was a stock I have owned for two years did not buy much this year (low 6.40 high 11.35 closed 8.55) sold most of my above the current price when they came out with weaker than expected numbers. if bought at $6.55 still over 30% return. do not own it but anymore but that may change if it drifted to $7.)
by the way on the markets:
1. the more bearish articles I see, magazine covers,
2. heard on CNBC where an oil analyst was predicting $40-$45 oil (and higher) with half million american freezing to death in the north east do to the cold weather, and heating bills.
3. posts on forums are bearish in tone, ie runs for the hills, 1973-1974, bail at all costs, recession, great depression. ect.
4. Bears who predicted a crash in 1996 are coming out the woodwork and being hailed as experts.
was a worried bull since 1998, not anymore.
(the BEAR decided to stay around but the BULL will come back next year, hundreds of thousands did not freeze to death (scare tatics),)
best wishes for a great 2002,
thanks
selkirk
not bad in the stocks 6 positive 5 negative returns, not bad for this market, that is my spin
like last year will have updates on the stocks in the 2002 thread, at least a few.
comments are in ()
also appreciate all the positive feedback I have received since starting these predictions in 1998.
thanks
selkirk
1. The US will have little growth but no recession.
growth goes from 4% to 1%. but for a recession need negative growth for 6 months. will not happen
warning: an IMF study recently found out that out of 60 recessions in countries around the world only 2 were predicted a year before they happened. so this one is not certain.
(3rd quarter was negative and the fourth quarter will probably be to, will have to wait and see, the economy would have probably slipped into recession even without Septmber 11,2001, which caused hundreds of thousands of layoffs.)
2. Cdn. dollar will rise compared to the US dollar. now at 66.69
3. the Euro will rise compared to the US dollar
4. the australian dollar will rise compared to the US dollar (there is a theme here, the Euro rising is the best one).
( I suck at currency speculation, some of these currencies had their run, starting to believe the US$ dollar is overvalued but it still seems to be the strongest and the one that people buy in troubled times. while dumping others. next year only one currency prediction)
5. Berkshire B will (now $2354) will go over $2800 US.
Warren is starting to use his cash hoard, insurance is coming back. and people are following his every move, he is starting to be weekly news. stock climbs and soon will trade at rich premium to NAV. will add to my position if this continues ( 2 shares will be added) as soon as the first share shows a profit (another rule)
( okay it only went to $2515,closed at $2477 still a 5.2% gain, not bad considering nasdaq -19, dow-6,TSE -14%. when I wrote this owned 1 Berkshire B share was going to add to it when it showed a profit, sold the stock, my goal is a 20% year return. Berkshire is a good holding company and well run but its size and large cash component make me feel it will be hard to achieve 10%+ returns, even Warren believes past growth will be harder because of the size. good for conservative investors. who are happy with 5% growth )
6. The Fed lowers rates 75 basis points on the year.
(correct; they lowered rates a great deal more, the economy was weaker and they moved aggressivley, also the events of 9-11 caused the fed to lower rates even more than normal.)
7. the states go ahead with a missile defense program, in the years ahead it will be seen as a waste of $60-$80 billion dollars. should really double it, goverment program.
(stated before that the money would be better spent on conventional armed forces, and security. still believe that, this missle program would not have stopped 9-11. also North Korea does not have the technology yet to hit the US, maybe Japan. still not a complete waste they did a few control tests and most passed. also the technology could be deployed in surface to air missles. these missles need to be improved a great deal to be effective. still should be spent on security and conventional armed forces. note: interesting that this was the first prediction about US defense item.)
8. oil will go below $25, bonus points= below $23.
comment= you may now expect $40 oil since I have not gotten oil correct yet in these predictions. good case can be made for $40 oil. but US economy will slow and demand should ease and supply increase.
basing this on a supply and demand situation, may be wrong. the US I now realize have no control ( and no influence over Saudis and Kuwait??)
(correct; when I wrote this people were talking $40 oil, supply and demand is the golden rule to follow, more supply and less demand, caused weaker prices.)
9. Sear Canada hit $30 a share in 18 months. now at $21.55.
note: bought 300 at $22.50, if a recession hits this will take 3 years and you will be able to buy shares at $18 maybe even $16 a share.
(wrong; stock is at $18.75 high $26.95 low $12.50 low was hit after 9-11. at $18.75 not much downside but not much upside, retailing is tough in Canada would not be a large position in my portfolio.)
10. Texas intruments comes back $47.375
note:bought 200 at $42.50, in this market do not chase, after I bought some it went to $39.50. made some good announcements and barely increases. may be able to get it below $42-$44
(wrong twice I bought this stock only to lose both times, should write a book (How to lose $2.50 a share trading Texas intruments.)
stock is at $28.66US, will come back but would wait for now.)
11. I am not a gold bug but gold goes up to $300 ($272). the US dollar weakens gold goes up. not great but better than most years for gold.
(correct; okay gold never hit$300 however $295 is close; also if you bought a gold fund out of the 19 precious metal funds in Canada 1 year return (nov 30) 16 funds had returns over 18%, only one had a loss. gold stocks for the most part had a good year, mainly picked the sector because gold bugs were sounding bearish. I am not a gold bug, do not believe in it long term, still a good year to have had some exposure to the sector.)
12. CNR comes to an agreement with CP, on partnership or a merger of CP rail. then they will look to the states after the 18 months wait on mergers is over.
I still will never understand that decission, and it was gutless, they killed the merger with BNSF without coming out and saying that. A merger can not be put on hold for a year and a half.
(no major agreements for CNR, however who cares the stock did great; as a CNR shareholder it was great to hold the boring but profitable railway in 2001.)
13. Nasdaq may go lower, before it comes back. but by the end of the year it will see 3000. nasdaq may fall to the low 2000 and even with a 1800, that would be a worse case scenario, but in this market must be considered. it does come back.
(wrong nasdaq bounced twice off 1800 but broke through, was closer to the downside than the upside. was never close to 3000 and making a run, may take a while, when people lose large amounts of money on sector it takes a while to come back to it, should have figured that in to the prediction.)
14. make it 15% gain for europe, Japan no comment, their economy is a mess. US dow 10% plus. nasdaq does 15% plus. TSE 300 5-20%. it all depends on nortel says in mid jan when they report. the market is in a bad frame so they will have to report great numbers.
(wrong; basically, Japan is still a mess, put negatives instead of pluses and you would be closer, thought a rebound would come in late summer or fall, never happened.)
15. banks, still like them, like TD and Royal Bank the best but the prices are starting to look rich, if you get a 5-10% pullback will add to my positions.
CIBC- is the bank we will track this year.
$46.50.
(correct: Cdn. banks held up and perfromed well in these declining markets. CIBC was not a bad stock to track +22% gain counting div. closed at $55.45 cdn.)
stocks (will have PE,yield, comments later)
1.CIBC +22% stock did well this year, will have to pick a good stock next year.
2.Texas Instruments buying at $45. for this.
($28.66 stated before how I lost around $5 a share on two seperate trades, believes it comes back but for now I will wait.)
3. sear canada ($21.55) $18.75 not a bad (stock but would not own to much of this slowing economy and brutal competition for the retail dollar, (watch it double next year) own a very small position.)
4. MGI $9.15 (volatile could see $7, in another forum I said like the stock not the market, it dropped, starting to like it below $10.
(well it dropped to $9,$8,$7 and it just continued started losing interest as it dropped continued, every report was just weaker on revenue, and management had no plan other than having a high cash burn rate. next year these stocks will go in a spec forum, thought techs may rebound, never did this was poor selection. stock was taken over at just over $1cdn. good thing to saved them from going broke. updated stated was avoiding this stock around $7, another reason you set stop losses and you never dollar cost on a losing position.)
5. QQQs will wait a few weeks but will start to dollar cost at this price not a bad time.
(did buy some QQQs not much, would wait until Nasdaq can go over 2200. still a good way to play the leading tech companies, did not have a great year but many big tech stocks lost a great deal more.)
6. Chase (will buy if it hits $44US
(closed at $36.55, counting div a loss of 13.8%, stock looks cheap but I have reduced my position, worried about the quality of their loans, probably will move higher still when in doubt; so I reduced the postion.)
7. Royal/TD Royal if it goes below $45 cdn. (currently $50.80) TD it goes below $40 ($46)
both are great long term holds, TD at $42.50-$45 is not bad to begin a position.
(Royal bank is up 15.88% not counting div and TD is up around 5.7% (counting div), not bad for a weak market. both are good stocks, Cdn. banks may pull back they have had a good year in general and are not that cheap.)
8. Nexfor $7.10 cdn. buy at $6.80 yields over 5.6%,
who would be stupid enough to buy a lumber/OSB company when US is slowing and tarrifs, you guessed it.....
(Nexfor closed at $7.35 and pays .40div (.10quarter) so the stupid indivual would have had a return of 13.9%. not bad high 8.45 low 6.30.)
9. Noranda base metals play buy at $14.80 yields over 5%.
note: prefer Alcan but it is up over 10% from when I bought it at $44.25cdn. hope to sell it around $55-$60 range. currently at $51.35cdn. perphaps should sell some now but will wait, if you think a recession will hit avoid Alcan and noranda.
(sold most of my Alcan above $60 ($60-$65cdn) high $73.88 low $47.25cdn closed at $57.88 still a good way to play Aluminum, have a small position, feel it could go below $50 or to $80, and that is fairly valued currently still own a small position since the company will cut $200+ million more in costs and is generally well run.
Noranda closed at $14.88 counting div a return of over 5%. high 18.15 low $13.33. if you like base metals copper, zinc, however I prefer other companies, and do not currently own the stock. thought was a decent buy at $14.80 and still has great mines, but would avoid for the next 3-6 months. would rate it a hold/sell. may be able to buy the stock below $14 next year. maybe even $12.50 cdn.)
10. Sleemans $6.55 will buy it at $6.25 not a large position. good beer company trading less than 12X earnings. worse plays. higher debt than I would like. so some risk, will post info on this interesting company.
someone I new had a sleemans honey brown and that is now their favorite beer, must hope for HOT summer.
(Sleemans was a stock I have owned for two years did not buy much this year (low 6.40 high 11.35 closed 8.55) sold most of my above the current price when they came out with weaker than expected numbers. if bought at $6.55 still over 30% return. do not own it but anymore but that may change if it drifted to $7.)
by the way on the markets:
1. the more bearish articles I see, magazine covers,
2. heard on CNBC where an oil analyst was predicting $40-$45 oil (and higher) with half million american freezing to death in the north east do to the cold weather, and heating bills.
3. posts on forums are bearish in tone, ie runs for the hills, 1973-1974, bail at all costs, recession, great depression. ect.
4. Bears who predicted a crash in 1996 are coming out the woodwork and being hailed as experts.
was a worried bull since 1998, not anymore.
(the BEAR decided to stay around but the BULL will come back next year, hundreds of thousands did not freeze to death (scare tatics),)
best wishes for a great 2002,
thanks
selkirk
