I am a retired Bank Owner , Real Estate Developer . I retired at 46 to spend time with family. I became bored in a year ,opened an Art Gallery in Manhattan at 65th & Madison. Weeks before opening I was diagnosed with a form of Bone Cancer. Now after seven years ,( life expectancy projected in 2007),I am looking to enter the economy again and live . I ceased and everything was Estate planning. Having a strong background in Finace Wharton MBA '87 in Finance ,Bank Director 20 years , I have begun to dissect and study markets ,Equity,& Debt and looking to create model Portfolio's and fighting to add the best Equities not just those that are easily accessed. My model for 2013 did super well, but a rising tide will help a drowning man. This year is the true test. I am a trader ,but have rules for the Portfolio: Sell at a 19.9% loss from book cost and Sell any annual gain over 25% to recover Capital. Seek yield and value . Learning to become more speculative with Gold Miners and small Cap ' high tech' Industirals.: XYL,HRDG,DXE,.Value stocks :VMI,ESV,UPL,Atlas Copco.and for 2014 specialty Insurers nimble enough to reallocate assets to increase their yield in a Bull Mkt and hedge their Insurance Risk: like RLI, MKL,RE. My top stock as of 1/1/2014 is a small car oil E&D Company. I am building a 10% position in my non core holdings. Core holdings are currently at 25%. That is typical to high. I add Tesco to a Core as I am weak on retail otherwise. I have That learned about from Alpha Pro article. CHINOOK Energy,and have been buying shares in ABX and and a few elite Small Gold miners. Also have picked up a few more Oil stocks ,SWT,DNR,VNR,SN and oil service Ensco is my single largest holding as of this date. Like Ondustrials but after 2013 much more cautios. Have core holdings: GE,Nestle,Roche, Google, Apple and Tesco. This provides a good mix of Industry,Currency,and reasonable values in this high P/ E market. Buy and hold is fine for these few stocks. Interested in agriculture,my new buy is CORN at these lows. For yield I have a few CEF's ,which if I was more aware should have formed in 2007 instead of retiring. Could have put 20 million in and raised another 80 and had a fine CEF that focused on Undervalued assets: Global Holdong Company's , Banks below Book. A CEF that seeks out value that is under priced ,most often out of lack of exposure. Foreign Holding Company's are difficult to value, are not easily manipulated and I know of no single company offering exposure to this non sector sector. My goals in 2014 atre to grow the base ,keep yield high, OIL TRUST's being valued at a 10% NPV paying 12% are great yield stocks . Just know that these Trusts need to be held for a year or until the shares gain 2X the yield. Hence, ROYT @ $13 is fine but sell @ $16.60. ROYT and SDRL TNH are all in my yield portfolio. I own JNK and BKKK and a few CEF 's under NAV : SWZ,SGL,EOS and HQL as who is better able tolay the Bio sector than a specialist. Same applies for DF a fund that is great ,well focused on German & Dutch mid to small caps. The most under valued security today I are Preferred Stocks. I am buying a Nuveen CEF at 87% of book that owns a diversified portfolio of preffered domestic stocks and the CEF has 35% leverage to justify non direct ownership. This is a smart model. Use the leverage to create arp duct the average Investor can not duplicate or it is not worth my effort anaylyzing the universe of Preffered stocks and NUVEEN CEF leveraged increases the yield ,pays for their costs and gives me an equity in a most under valued overlooked sector. There are a few preffered stocks out there not in the Finace sector but this is the best lace to gain exposure to my least favorite secor Banking. The rules of Banking strictly enforced limit any Bank's ability to make retirns over 4% of their asset base. By regulation bank earnings are capped since we have no private banking sector left in the US and nearly no Banks that are able to risk money ,but still not be venture Capitalist. This is hurting the economic recovery and expansion and is a long term structural flaw for an entrepreneurial nation like ours. I would never have been able to build my Real Estate business as I did in the 1980's if not for the S&L sector. I was finacially strong enough by the early 1990's to become a cBorrower at a local Bank and Trust company ,but that same Bank would not have loaned me money five years earlier. I know their is private equity for tech and other type company's but their is a lack of access and outlets for many new businesses that are too small or the borrowers are not sophisticated to access private equity or venture capital. I was lucky to build 8 separate Apartment Prpjects with ITT, and A local old line public REIT. Those companies today would either not be interested or would require such a large percentage I would question the risk reward. This trend to concentration and ever larger companies is not a good thing. We lack the Banking system to permit the flexability required to encourage the private small entrepreneur. I am a product f being able to borrow a very high loan to value that existed in the 1980's. The Fact that as& L industry was shut down by government fiat took away the main engine to small business lending. Commercial banks where neve able to compete with as& L 's and the Banks benefitted greatly from the mid 1990's but they collapsed again by heavily concentrating all mortgage lending through their doors. They dis a worse job than the as& L that were formed to lend locally against real estate. The collapse of the Finacial system in 2008 is proof that Commercial a Bankers lost all sence of purpose and the rules of banking and we would have been in a worse depression than 1931 if not for the massive government intervention. This government intervention has been a great luxury and only an academic would arue against this. Warren Buffet was on the path to becoming less than wealthy n 2008. Billionaires were going to go broke if the Federal Government did not take the drastic overnight steps they did. The proof is that rates are still at near zero and until this changes the best way to make money is to pkay the spread between high yields equities and debt. How you approach this arbitrage is the only option. Equities are now completely dependent upon Federal Bankpolicy and new businesses are all pinned to either new technology or non distant. The USA has two growth engines , Energy and Hgh tech. Energy is a business that requires tremendous capital to ener as a player. High tech is still an area that support the small entrepreneur. But one industry is not enough to grow a huge ,diverse economy like ours. This is a fact that must be considered as a investor. We live in an era that leaves Corpoartions with less completion than ever aside from the two industries noted, hence, a company like VMIthat is a diverfied maker of steel products has more room to grow and less completion. They are a large corporation but seperated into the sectors would be more vulnerable if we had an economy that fostered competition as it did before the 2008 crash. Everything we as investors do must now be seen through this lens. The positive and negative. I do believe it has created a great equity bull for a long time. The positive is that the Fed is now able to control inflation since they start at zero, Never before has the Fed held such power and this is solely because power resulted from their ability to thwart the systemic collapse of Capitalism and they gain the spoils unintentionally by becoming the only true power. Fed policy is more effective today as ther can on a percentage basis exert greater control. Hence, I believe the rules that I most ecpnomist and investors used for the past 30 years must be relooked. In my view asset inflation in equities will be a Natual product of the need for income. Either people need income via i,dividends or via growth. Bonds are soon to be hard to sell if the markets remain stable or rates stay low. Something must change drastically for anyone to invest in a Treasury Bond. That is an issue. It will create a Anger spread between the rich and poor. Only the rich are able to truly profit from a radical increase on equities. The old are damaged by this low rate high flying equity economy, this is a fact that must be confronted soon as the the baby boomers retire and move onto fixed incomes. I see many strenghths and many societal flaws a result upping fom this new era of equities and zero ntrest rates.Hence a company like Apple that now pays a dividend equal to a ten year treasury bill and is barely leveraged and has enough cash on hand to retain their current dividend for years just with the current surplus and whose stock sells for below the market average multiple is by every definition a must own company. Their balance sheet is the greatest thing anyone has ever seen. They have been disciplined too by not buying junk companies and using their capital to build a fortress around their company. The cash hordes they have and the cash flow they generate are something I never saw before. Only big oil could generate such profits before but then they had huge Cap ex and depletion and commodity price risk. Hence,to be a specialty retailer and manufacturer, Apple has become a new type of Corporation. They are also the safest place to invest as they have access to cash ,cash flow and a nations GDP siting off shore in cash. Amazon,which is valued at a multiple 1,000% over Apple's selling price is a different situation. But, with interest rates at near zero investors are willing to risk their money and forego any thought of a dividend Int he hope that they turn profitable. I do not see this happening. I see the company as becoming a hybrid postal company with the government. Or they need to exchange their stock for shares of UPS or FedEcx. But at least they are not loosing money. Once they got amazon to such a scale that it afforded all the Chairman's grandious ideas it was safe from bankruptcy. I would not buy the stock as they do face ever increasing completion on the internet and have yet to make a dome. If the company was not funded by the customers up front they would be on need of more cash than anyone would lend them using bank lending metrics. . I think these realities are part of the thinking that must be present on a Invesyors mind in 2014, we livein an age pf P/ E growth and it is a function of ya infa currency hinged to nothing and a freak period of slow monetary velocity that has kept inflation low . Inflation will or has returned just look at the ape multiplier from 2012 to2013. That is a huge percentage I crease. Like 2008 was deflationary with the fall in real estate values and then equities the wealth destruction is now wealth creation though little has changed aside from Oil and Gas technology . The high tech sector is better , is more mature ,and therefore being incorporated into individual lives as well as corporate lives. But only the energy side is meaniful in the effect on every individual as the country steps to be a natural gas empire. This is the mission that must be completed to pay off the debt and retain our sloppy energy policy. in its change of the fabrict of te economy. Hence, in 2014 we just need to watch inflation and how the markets react to it report. I believe the equities will top 20,000 as they are just by time. The world will accept a 20 PE if the books are rift and inflation remain at 3%. This changes how we allocate money send what risks we should take, the fact is the dollar declines about 2% annually which means an ancestor must Earn vet 5% to account for inflation and the constant currency decline. Therefore to earn 10% is a 5% real return which is again the just twice the real nflation rate and decline on cirrency rate. This is now part of the valuation wether people admit this or not. The world Oops at our market as a dynamic market but the growth or yield must be their to compensate anyone for putting their money into GDollars. If their is ever I believe in hard Assets being approximately 50% of anyone's wealth with Assets over 6 million dollars today. Part Real Estate, part Commodities, Art,Land,Gold,Jewels, and Soveriign Bonds are included. The balance is 40% diversified Equities and 10% Cash in Swiss,Norwegian, Singapore, Hong Kong and Sewdish currency. I even diversify here to hedge the one hidden wealth erosion we do not see nor calculate,the Dollars's long Bear run since the Euro really became a rival currency in 2001/2. The $ will remain weak for many years,it is the only way short of severe austerity to repay the debts . A stronger currency back by some form of hard asset is a long term goal ,after energy independence ,enviornmental clean up and preservation of open space. We need a national set policy of land use that is neutral over the longer term of acreage per 100,000 people of impervious coverage. This addresses water policy, energy policy, enviornmental policy and will help urban renewal and allow for vast improvements in our public transportation .the Euro another second rate currency. I do not see Gold as the true Fiat currency. I see earnings growth of multi nationals as the ultimate fiat currency. GE,NSTLY,ROCHE,XON are all fiat currency's ,that is one GE finally returns to being a true Industrial and shed Finacial to under 20% . If GE can shed the Finacial side in half it should sell for the highest P/ E of any Dow Stock. Apple is a best buy ,Google a must own and Tesco is my retailer. I have two packing companies in each industry that I feel is under valued or growing. packaging a fully valued sector I own Nampack and Bemis. Bemis is now a small holding after the great run it has had. Last, my area of specialization is Industrial or old industry company's that have a technological edge. A perfect example is Albany International. A specialty machine manufacture that has a new division . A new Paper composite material for use in Jet Props. This makes Albany a model for all Indusrial corporations and what I seek in when looking at a equity position that has conviction.The US must cut corpoate taxes and encourage more Cap Ex. The balance sheets today are so strong the risk tolerance so low it is hurting the velocity of money in the economy. We must encourage more R& D and Cap X to build a stronger base for the US economy. Forget the tax cut if politacally & economically a bad time. But ,encourage longer term corporate behavior by providing a credit for R&D & CAP X with a useful life over 5 yrs. last the new trend or fashion in corporate terminology is what I call the Employee Hapiness Meyer. This is ao satire trend that could be bolstered in a new mores implied tax code. The tax code must raise revenue and US colorations pay their fair share ,but the divdend policy has become too uniform and the retention of employees via keeping them' Happy' for lack of a better term. But, I do believe Corporate and Employee loyalty are positives for the bottom line and stabilizing for Society. I fear a downturn in this Bull could fond this great new age idea left on the cutting room floor. Use tax policy to reward a societal positive.