- Apple (AAPL) will replace IBM (IBM) in the DOW. I think it finally happens. One tech for another, why not? IBM isn’t exactly doing the DJIA any favors, it’s just been horrible over what has been two fantastic years in the overall markets. I guess we could calculate what the DOW would be at if this change occurred post Apple split, I’m not going to bother but we can all probably agree that the index would be well north of 18,000. Also, I think you buy IBM when they get the boot.
- General Electric (GE) will outperform the market by A LOT. I’ve been suckered into this belief before but I think this is finally the year. We’ve seen this movie previously, DOW component that trades 23-28 for what seems forever, nice yield, decent management, but plenty of buzz about how a CEO change could spice things up. I think Immelt announces his departure in 2015 and the stock responds after already getting to 30 by mid-year. Where have we seen this? A company that “missed” the boat and changed CEO’s? Oh yeah, Intel (INTC). That traded between 23-28 for years. Nobody liked it, the yield was solid. They shook up management, it’s up 44% this year…44%!!!!.
- Speaking of departures, Warren Buffett will announce a time frame for his departure of day-to-day operations at Berkshire Hathaway (BRK). He’ll never leave the company entirely, but he’s spent the last decade hand picking a solid bench. Recently, he’s been spending more and more time traveling (seen recently in a LeBron jersey at a Cavs game) and I think he wants to enjoy himself even more than usual. Look for something like Chairman Emeritus or something like it, but don’t look for him to disappear a-la Peter Lynch.
- The Russell 2000 (IWM) will outperform the S&P 500 (SPY)…I mean it kind of has to if the market is going to have another positive year right?
- No Apple (AAPL) watch until after Memorial Day. We’ve been hearing “early 2015” for Apple Watch for quite some time now. I don’t think it happens. It’s not necessarily an Apple issue, and I think there will be decent demand, I simply don’t think there’s enough sapphire glass for the watch faces. Think about it. They announced this product BEFORE GTAT announced their bankruptcy. I think this caught Apple off guard. Recall that the iPhone 6 was rumored to have a sapphire screen for months and yet debuted without it. Apple already uses a TON of sapphire glass just for the camera lens and home button on the iPhone. There just isn’t a lot of this stuff around. I think it could delay the launch.
- The Internet gets blown up…and not by Kim.That thing that just happened to North Korea, I think it happens to many if not all of us this year. Truth be told, we’re waaaaaay overdue for an issue like this. Why hack into an individual company when you can take the whole network down? This concern seems more legitimate than say a Russian and American submarine colliding in the middle of the ocean…if you catch my drift.
- Industrials will be the best performing sector of 2015. Everyone still loves big cap tech and banks, I’m just not sure how much more room some of these tech companies have and banks still seem like a regulatory nightmare. If I hear ONE MORE TIME how CCAR is going to be bullish for banks this year (and every year for the last 3), I might scream. I’m pretty sure none of the monoliths even know exactly what they own. Remember, the bigger the company, for the most part, the lower the P/E. The big banks are MUCH bigger than any other time in history. Meanwhile Boeing (BA), General Electric (GE), Honeywell (HON), United Technologies (UTX) etc all seem underpriced to me.
- Twitter (TWTR) is NOT bought, but replaces their CEO by Valentine’s Day. Upon the CEO’s departure, Twitter instantly pops 15% over the course of the following week on the way to a 50%+ gain for the year.
- The 10-yr yield on treasuries will not rise above 2.67% for more than a week all year. Despite an improving economy, global monetary easing keeps our rates…lower for longer.
- Anadarko Petroleum (APC) is bought by Exxon Mobile (XOM) for $110/share. I don’t think Anadarko wants to be bought and wouldn’t necessarily welcome a bid, but it makes a lot of sense for Exxon who will move into its new world campus in Spring, Texas, late next year or early 2016. Did I mention that it will be 10 minutes from Anadarko’s HQ in The Woodlands, Texas? Anadarko has some very nice assets that they are just sitting on, has a nice balance sheet and at about 10% of the market cap of Exxon, could be digested. It’s a long shot, but this could kick M&A in the energy space into another gear. With oil prices this low, the government will also be much more likely to “accept” such a merger as well.
As 2014 comes to a close, it’s that time again…..predictions for the sake of looking smart later. I need something to RT over and over again if I’m right about some of this stuff so why not consolidate it into one list…and then never mention this list again if I’m wrong on all accounts. I tried to have some fun here, I hope you enjoy it and all the best in the new year.
The expanded thoughts of Cramer's Shirt...micro blogger, contributor, average Joe....or Jim in this case.