1. AAPL will replace IBM in the DOW. Close. AAPL did join the DJIA but it gave T the boot, not IBM. I think IBM would have been a better casualty, but I digress.
2. GE will outperform the market by ALOT. Don’t make me do the math on this one. Search your feelings, you know it’s true.
3. Warren Buffet will announce a time frame for his departure of day-to-day operations of Berkshire Hathaway. Didn't even hint at it, to be honest. WRONG.
4. The Russel 2000 (IWM) will outperform the S&P 500 (SPY). Barring a small miracle, this was wrong. My theory was that if the market was to continue to rally, small caps would have to almost certainly lead. Well, there was no real rally, thus no leadership from small caps. WRONG.
5. No AAPL Watch until after Memorial Day. I’m giving myself credit for this and I’ll tell you why. I actually ordered during the wee hours of launch day and mine did not arrive at my door until AFTER Memorial Day. So while the event was held in “early 2015”, we all know the supply chain was not set up. The whole way this launch was handled continues to mystify me.
6. The Internet gets “blown up”. There were some interesting outages this year, airline websites, banks, but the Internet as a whole, was not brought to its knees. Happy to be WRONG here.
7. Industrials will be the best performing sector of 2015. WRONG. Healthcare looks like it will easily take the crown. Industrials were in the middle of the pack. WRONG
8. Twitter will not be sold and they will replace their CEO by Valentine’s Day. It took a little longer than 7 weeks into the new year. Twitter was not sold, but stay tuned for more on that.
9. The 10-yr yield on treasuries will not rise above 2.67% all year. Seems like a safe call now, but there were actually plenty of people calling for 3% rates in 2015, I swear.
10. APC is bought by XOM for $110/share. Not bought and won’t be now for $110, that’s for sure. Should have stopped at nine last year. WRONG
Now, as Bill Belichick would say, on to 2016.
1. Wal-Mart will outperform the S&P by at least 10%. I’m not even going to count the dividend here which is a nice 3%. This company is trading at about 1/2 sales, that’s ONE HALF. They’ve increased wages already and I think they see some of that goodwill payoff in 2016. I also think the consumer begins to believe that gas isn't heading back over $3 at a moments notice. They should benefit from this. I’m long already.
2. Facebook will trade to the 80’s. I get it, the company is amazing, everyone is on Facebook, they’re the only ones who get mobile advertising. That’s fine, I’d be interested 25% lower…maybe. That said, I don't short well run companies even if I think they are overvalued.
3. Kroger will fall at least 20%. Here’s another one people can’t get enough of. We shop at KR, it’s well run but they HAVE NOT raised wages yet like Target or Wal-Mart and it is starting to show. Fantastic run, taking most of its gain I imagine from Whole Foods’ hide, but it’s over. Totally rational 20% correction seems more than warranted. This one I will look to buy puts on when the momentum breaks.
4. The 10-yr will not trade above 2.67% for more than a week all year. Why not roll this one out one more year and see if we can get at least one right.
5. Microsoft ends the year trading above $60/share. I’d love to get long this again at some point. I sold a few months back on the breakout and haven’t pulled the trigger. This might finally get some real selling in January, it’s just been so strong over the past few months.
6. Solar stocks finally start to decouple from the price of oil. This has already started to happen, to a degree, thanks to the solar credits being extended a few weeks back. I understand the relationship that if traditional energy is less expensive then there is less need for alternative sources. At some point, that relationship HAS TO CHANGE because if we do become less reliant on oil (possible) something has to power everything running on electricity whether it be a a home or a car. Solar seems like the answer here. I like SunPower (SPWR) and am long.
7. The U.S. Dollar peaks during Q1 versus all other major currencies. This may have already happened, but I’m going to leave it in. Q1 will be the high water mark for the year. I don’t trade currencies, but I do recognize why the dollar is important.
8. Twitter is bought by Facebook or Alphabet. It’s pretty clear that Twitter would be worth more being managed by either of these two companies who are also, I”m sure, attracting and hiring better talent than Twitter. What a disaster Twitter is becoming. I actually think it may go away if it isn’t sold or a drastic shift in priorities doesn’t take place. HINT: People outside of sports and finance have to engage regularly. They seem to be incapable of making this happen. Side note: Alphabet is an interesting long on a pullback, I'll be avoiding the other two unless there's a drastic change in valuation.
9. The market has not one but two 20% pullbacks before ultimately finishing higher on the year. One of the benefits of QE that isn’t discussed enough is the lack of volatility it provided. Sure, there were plenty of boring days, but boring days can still lead to nice gains. That starts to change this year.
10. The MLP structure does not go away. There’s been a lot of bad information about MLP’s recently. The structure is not going away. Anyone who suggests that just wants a click or to appear on TV. Rich Kinder wasn’t some genius, he was good at PR. There’s a difference. Look to the MLP’s with organic growth and a good coverage rate on their distribution, avoid the ones lacking both. I am long EPD in this space.
Good luck to all in 2016!