S&P 5,250 – Dow 40,000

S&P 5,250 – Dow 40,000

December 13, 2021
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We were bullish in 2021 and bullishness obviously paid off.  As of the Friday close, the S&P 500 is up more than 25% so far this year.  Meanwhile, a 10-year Treasury Note purchased at the end of 2020 has generated a negative total return, as interest earnings have been more than offset by capital losses.

The reason we were bullish a year ago even amid widespread fears about COVID-19, is because we stick to fundamentals, assessing fair value by using economy-wide profits and interest rates, what we call our Capitalized Profits Model.  And, one year, later, we are still sticking with fundamentals.  Our year-end 2022 call for the S&P 500 is 5,250 (up 11.4% from last Friday), and we expect the Dow Jones Industrial Average to rise to 40,000.

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