2015 Investing Prognostication

2015 prognostication on U.S. capital markets: equity investing in world wide market best analogized for 2015 with equity investing U.S. market place circa 1950.

For 2015:

1) Macroeconomic back drop remains unchanged:

a) 33 years favored fixed income allocations too risky for future passive investors.

b) Secular trend of world economic expansion suggests 100% equity allocations for 5 year+money.

2) Equity averages levels:

a) S&P 100 minimum upside move 5 months to 5 years (prior to reducing allocation) 1125.

b) DJI 30 minimum upside move 5 months to 5 years (prior to reducing allocation) 21,500.

c) S&P 500 minimum upside move 2160 inconsistent with a) & b) suggests possible short term correction with down side as low as 1650.

Favored shareholder friendly positions consistent with macroeconomic back drop:

VINIX, and/or (in alphabetical order);

AAPL – value* $157/share – Buy to $118

CL – value $61 – Hold

CPB – value $54 – Hold

EQR – value $64 – Sell

HSY – value $70 – Hold

LMT – value $228 – Hold

UTX – value $150 – Buy to $113

UNP – value $56 – Sell

VFC – value $71 – Hold

*capitalization rate 4%

Easy enough to construct matrix using above to yield somewhat better than averages with earnings power twice current no risk fixed rate.

Al McKinnis, unlicensed hobbyist 12/27/2014

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