4 Predictions for 2009: Revisited

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It's been six months since my "4 Predictions for 2009" column, so I figure a halftime show is in order.

After all, if I go out on a limb, it's not just for sport. I expect to be fully accountable. Just half of my 2008 predictions materialized, and I had no problem pointing out where I went wrong.

My crystal ball has been a lot clearer in 2009. Let's go over the four prognostications.

1. Yahoo! will trade higher in 2009
The world was crumbling around Yahoo! (Nasdaq: YHOO  ) last year. It had botched its potential acquisition at the hands of Microsoft (Nasdaq: MSFT  ) , and shareholders were clamoring for a regime change.

They finally got it this year. Carol Bartz came over in mid-January, bringing the grit and backbone that was missing from Yahoo!'s former chieftains. She has gone on to talk tough and make even tougher decisions.

Wall Street likes what it sees. Citigroup became the latest firm to upgrade the new-media giant yesterday. The end result is that Yahoo! shares are trading 34% higher than they were when they closed out 2008 at $12.20.

2. Sirius XM won't file for bankruptcy
There weren't a lot of believers in Sirius XM Radio (Nasdaq: SIRI  ) earlier this year, either. Shares were trading for nickels in early February, as the first of three debt repayment milestones loomed.

However, I wasn't the only one who didn't see bankruptcy in the company's near-term future. A February poll found just 25% of our Foolish readers banking on a Chapter 11 bankruptcy reorganization filing by the satellite radio operator.

It was around that time that EchoStar's (Nasdaq: SATS  ) Charlie Ergen and Liberty Capital's (Nasdaq: LCAPA  ) John Malone began wrestling for the right to be the company's sugar daddy. Malone won. Yes, the Liberty Capital deal is highly dilutive and comes with a brutal interest rate, but Sirius XM is still alive and kicking.

Perhaps most importantly for my 2009 prediction, most of its debt repayment obligations for this year are now spoken for. The company isn't out of the woods entirely, but any bankruptcy filing is now a year or two away, in my opinion.

3. Tech will lead the market recovery
"It will be companies like Apple (Nasdaq: AAPL  ) and Google (Nasdaq: GOOG  ) , which were smoking hot leading into the meltdown, that will regain their sizzle," I predicted in December. "The one sector that will lead the country out of recession is technology."

So far, so good. Apple and Google are up 59% and 35%, respectively, this year. The tech-stocked Nasdaq is also besting the other market averages. The Nasdaq Composite is trading 15% higher, year to date. It's way better than the 2% gain for the S&P 500 and the 2% decline for the Dow Jones Industrial Average.

4. Chinese stocks will outperform stateside equities
I shouldn't do any victory dances at halftime, but it appears as if I'm four-for-four so far. China's been on a roll this year. The Hang Seng Index is up 28% in 2009.

This can always change, of course. Chinese equities can be volatile. However, when you peek over at the 2% gain in the S&P 500 after the kind of roller-coaster year that stateside stocks have had, having a little exposure to China's equities is something that risk-tolerant growth investors should consider, if they haven't already.

Well played, crystal ball. Now let's get back out there, because there is another half to play.

Other ways to reflect on the past and the future:

Microsoft is an Inside Value recommendation. Google is a Rule Breakers selection. Apple is a Stock Advisor choice. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz doesn't mind taking out the crystal ball from time to time, if only to dust it for fingerprints. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

Read/Post Comments (4) | Recommend This Article (16)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 19, 2009, at 9:00 PM, xetn wrote:

    And the Shanghai composit is up nearly 50%.

  • Report this Comment On June 20, 2009, at 11:07 AM, burrowsx wrote:

    The lack of transparency in the Chinese market makes it as risky as credit default swaps.

  • Report this Comment On June 22, 2009, at 2:54 PM, wannainvestsmart wrote:

    Also, the Chinese government doesn't allow people to put money in foreign stocks. Therefore, they put it in real estate and stock market. It is a bubble in the making.

  • Report this Comment On June 22, 2009, at 2:55 PM, wannainvestsmart wrote:

    Also, the Chinese government doesn't allow people to put money in foreign stocks. Therefore, they put it in real estate and stock market. It is a bubble in the making.

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