1. MEMO #2
DATE: Monday March 7, 2016
TO: Dr. Lawrence Souza
FROM: John Sakoda
RE: Industrial Stock Prices Forecast to Rise by 7% over the next 12 months
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We are tracking industrial stock prices. Based on our research, we forecast industrial stock
prices to rise by 7% over the next 12 months based on the following factors: The supply is at a
historic low because of unjustified construction and financing constraints that offer high upside
for new rents. Numerous tech cities have demonstrated growth in financial services and
technology. Therefore, we recommend the following 23 trades:
Indexes(2) ETF's (2) Stock (3)
 Buy Forwards  Buy on Margin  Buy on Margin
 Buy Futures  Buy Calls  Buy Calls
 Write Puts on Futures  Write Puts  Write Puts
 Buy Calls on Futures
Trades: 8 6 9
Tickers: MMM, AMG SPDR, IVV AES, SLX, ATD
Total Trades: 23
• All of S&P 500 sectors are forecasted to report
higher levels in 2016, expect for the energy
sector as it is expecting indexes EPS to fall by
10%.
• Since S&P 500 isn’t as expensive compared to its
long term value the index forward historical
average has tended to rise. Goldman Sachs
economists expect 2% growth in domestic
GDP next year.
• S&P 500 is predicted to see a 13.8% rise in
price over the next twelve months. The energy
sector of S&P 500 will peak in 2016 before it
begins to fall. The risk because analysts have
overestimated by half a percent in recent years.
We are tracking industrial stock prices. Based on our research, we forecast the industrial stock
prices to rise by 7% over the next 12 months based on the above factors: The supply is at a
historic low because of unjustified construction and financing constraints that offer high upside
for new rents. Numerous tech cities have demonstrated growth in financial services and
technology. Therefore, we recommend the above 23 trades.