4. U.S. stocks will rise 5 percent to 8 percent.
Sure, we have problems, but the rest of the developed world has bigger issues and capital will continue to flow to, as one of my sources calls it, “the least dirty shirt in the laundry.” It won’t be a boom year for stocks, but continued solid earnings and expectations for a change in the White House should pushequitieshigher. (Last year, I predicted the Dow Jones Industrial Average would rise 8 percent to 10 percent and it's still possible.)
5. Gold prices will drop at least 10 percent.
I predicted the same for 2011 and have been spectacularly wrong so far. My rationale, however, remains intact: A stronger dollar will devalue everyone’s favorite speculative metal. Buying by emerging market central banks has propped up gold pricesmore than I thought possible this year, but cash and capital have better uses than a non-industrial metal, so I continue to expect a dumping of gold in 2012. That and a stronger U.S. dollar should drive the price down. Ignore the doomsday commercials. If indeed the Mayans are right, holding a heavy block of yellow metal won’t matter much anyway. Invest instead in a bunker and canned foods.
(Editor's note: Sullivan did not contribute predictions for 2011, although last year some were predicting his joining CNBC.)