Every day NYSE floor legend Art Cashin and I chat about the day's market action, which goes up on CNBC.com midday.
But once a year, the director of floor operations at UBS and I sit down at Bobby Van's Steakhouse across the street from the NYSE to remember the year that has passed and to look ahead to the coming year.
There was much for Art and I to talk about. It has been a record year for stocks: The Dow Industrial Average hit a historic high for the first time this year on March 5 and is up another 10 percent since then. The has rallied a stellar 24 percent alone in 2014. What's fueled stocks higher? Massive money pumping by the Federal Reserve, upbeat corporate earnings, and a slowly improving economy.
2013 key events:
—Jan. 1: U.S. reaches fiscal cliff resolution
—March 5: Dow sets record high
—April 4: Bank of Japan launches stimulus
—May 22: Ben Bernanke testifies before Congress
—July 18: Detroit files for bankruptcy
—Aug. 21: Syria chemical attacks
—Oct. 1: Government shut down begins, lasting 16 days
—Oct. 15: Fitch puts U.S. on "watch negative"
—Nov. 14: Janet Yellen testifies before Congress
(Read more: Don't expect big things from Washington in 2014)
When it comes to 2014, Art mentioned several hot-button topics: if and when the Fed tapers, Yellen's potentially short-lived honeymoon, and where interest rates may be in the next six months.
I asked Art what the defining event of 2014 will be. His answer: how the Fed handles tapering, adding that the Yellen honeymoon may not last that long.
"I think what you will find from her is a very, very concerted effort to clarify communications," Art told me. "I think she realizes that just a few simple words from Bernanke in testimony, spontaneously, threw us for a loop. So I think they will find that Yellen is far more cautious in what's going on, so we'll be slow to taper."
His biggest worry was for 2014: that the market might have a big problem if the economy does pick up notably and spending jumped. He worries that an improving economy and more spending could spur inflation.
"Now if money suddenly got velocity, if people began to lend and spend, the Fed would be very, very hard put. … If money got velocity, I would think you would see things begin to turn topsy-turvy. They would taper at the speed of sound."
(Read more: Will the Grim Taper be a body blow to the wealthy?)
Art is also skeptical that corporate America will continue to pull off the trick of increasing earnings solely by cutting costs. What's been missing is revenue growth.
"We haven't seen that," Cashin said. "What we've seen instead, and this is the reason Wall Street is doing well and Main Street's not really doing well, is the managers of corporations all around got very resourceful, and they found ways to do more and more with less and less."
Despite the 16-day government shutdown this year and threat of a possible default, Cashin thinks the U.S. may be the hot spot in 2014. If rates keep rising and the Fed tapers, emerging markets stand to suffer as they heavily rely on foreign investment.
"I think you may begin to see people coming back here, in house again [in 2014], saying: 'You know what? America probably is the safest place to put my money,'" Cashin said.
—By CNBC's Bob Pisani
