Concur with you RAB (low $4's), but need to take into account...

Concur with you RAB (low $4's), but need to take into account that the big wide world is likely to be a more volatile and less predictable place in 2010 than it was in 2009. So any prediction for the whole year needs to increasingly have some health warnings, such as:

1. QE in the US is likely to be cut back as the year progresses. This will have the effect of pushing the interest rates on US treasuries up and treasuries and more generally bonds down. These movements will be reflected in the DOW/ general market falling. The ASX will tend to mirror what happens in the DOW, although it will be supported because of its positive exposure to China.

2. The economic recovery in the US looks like it is happening but will be tepid. The US economy is facing massive headwinds but asset markets in particular look like they will continue to get a tail wind from QE for the next few months. These offsetting winds look likely to be positive in the first 3-6 months but negative in the remainder of the year. Unless the economy can generate some of its own steam during the year the whole US economy could collapse in on itself and we will be phase 2 of the GFC later in 2010, with far fewer options to work with.

3. A lot of our fortunes for 2010 will depend on the Chinese attitude towards the US and also American attitudes towards China. For the last few years the mutually beneficial but parasitical relationship has recently been mutually beneficial and consequently benign. For example it has been good for China to concurrently export to the US while loaning the USA the money to pay for those goods. It has been good for Americans as they have been able to live beyond their means. During this time the pricing of the Chinese goods sold to the US has been well below what a free market would have generated, but so to has the pricing of US treasuries. The re-pricing of either Chinese goods by way of American tariffs or the re-pricing of American treasuries by way of Chinese buyers pulling-pack as a result of either Chinese or American attitudes hardening could rattle the markets somewhat.

4. The price of oil is likely to rise. The long term trend is up. The GFC has saved the economy from this trend during 2009, but the continued growth of the BRIC countries and the recent stabilisation of the US economy seem to have brought this dip to an end. A return to higher oil prices will bring back inflation and that will result in higher interest rates
5. Geopolitical stress particular in the Middle East looks like it will escalate in 2010. I think that one of the reasons for this is that Obamas aura is now fading and the hopes he bought for change are jading. It is as if the parties waited for Obama to weave some peace-magic and gave him time to do that. Those hopes have now fading and the parties look more and more likely to resume their confrontation. Geopolitical uncertainties will not be good for the markets.

Although the above discussion is relevant to most stocks, it is also relevant to CCP. The reason I gave a six month outlook for CCP, not a full year, was that it seems to me that the global outlook beyond the first six months of 2010 is too uncertain to say much withy confidence.
K