Everyone is out with their predictions for 2010 $twentyten and as usual, mine are just to assume most trends will continue. I like Amazon, Apple, Gold and Google because that is where the money is flowing. The right web, mobile, software and weapon stocks will also make you money. I never own airlines, even though we have three great ones flying our skies today (JetBlue, Southwest and Virgin) and I avoid hot ‘component plays’, generally semiconductors, who can shoot to the starts for a few quarters at a time.
Nobody knows the page 10 news that will disrupt the big trends moving our financial markets. Surprisingly, very few lists/predictions even mention the page 10 possibilities.
Here is what we know:
1. Apple, Google and Amazon are kicking ass and RIMM and Microsoft are sucking at their nipple but being carried along on growth in mobile and a global economy. To gamble outside this box is just speculating and unless you have inside information, you are just making investing harder.
2. The US has no dollar policy. The debt ceiling is THE MOON . It is page 10 and unfortunately….stuck. Trend chaging news would be a real change of policy and not something worth spending prediction time.
3. Housing can’t be saved with money. Exciting rallies may occur, but just look at the semiconductor index after the 2000 bubble and chill out. The government fiddles with demand issues, but supply is just as big a story
4. We know the fastest growing revenue sectors in the US are : 1. Internet Search; 2. Internet dating/matchmaking; 3. Tanks and armored vehicles (If you have money to invest and want growth, assume these won’t end in 2010 and just manage your risk).
5. Our Federal Government will backstop anything BIG financial that is still standing (Mish is always a great read).
6. America will get fatter AND unhealthier, despite ‘free’ healthcare and promises of weight loss without dieting . There are lot’s of stocks to catch this continuing trend.
7. It will get easier to start a web business, but harder than ever to build a brand and get attention.
What we don’t know 6 months out is how badly our government really slows us down or how many more sneaky taxpayer unfriendly maneuvers are unleashed. We don’t know how badly the state bankruptcy positions will alter migration patterns or the federal stance on all of the above.
We don’t know if IPO’s will return even though Paul Kedrosky says so in a well written piece . It is ridiculously expensive to be public and the page 10 news of 2009, is Russia is willing to do that service right now for Silicon Valley. I would bet on that trend over a resumption of the IPO trend.
The great thing about the stock market is you DO NOT have to call turns. You did not need to buy stocks on March 9th to have a banner year. You could have bought Google and Amazon mid November.
If you want to invest in the stocks market in 2010, focus on money management and the news won’t matter. I read Investor’s Business Daily once a week because it is the one newspaper that has NEVER missed a new leading stock. If a stock is a leader, they show up, generally without much fanfare on the front pages of the paper. There won’t be 100’s of articles about the company or stock, just a consistent picture of the numbers and the PRICE.
Tell yourself you won’t time the market. Tell yourself that you will only buy the best institutionally owned (not that they know anything) stocks and tell yourself you won’t let any stock take 15 percent or more away from your net worth. Follow Stocktwits Suggested Lists and I think you will see many reminders of these basic tenets through 2010.
I have had a great year of health and luck and hope you have a great 2010.