5 More Predictions for 2010

I whipped out my crystal ball last week and made three predictions for the year ahead. It's time to go out a bit further on the limb and make a few more market calls.

1. Gold prices will fall in 2010
Gold bugs will be quick to point out that I only went 8 1/2-for-9 on my predictions for 2009. The fractional miss in the mix is that I called for oil prices to rise (which they did) and gold prices to fall (which they clearly did not).

Well, I haven't learned from my half-mistake. Gold's rise during the recession is tied to many factors, but one of the primary drivers was a flight out of distressed asset classes. Now that real estate prices are bottoming out and global equity markets have regained some of their luster, I see all of those "cash for gold" late-night infomercials -- so emblematic of a bubble -- going away.

2. Facebook will go public
Modesty has never been a Facebook trait, but it needs to check its pride at the door and go the IPO route in the coming year. Registrations are still growing nicely but showing signs of deceleration. Friendster's remains and the slow fade at MySpace are warning signs of what can happen to a social-networking site after it peaks.

Facebook was right to reject Yahoo!'s (Nasdaq: YHOO  ) advances while it was still in the crib and give Microsoft (Nasdaq: MSFT  ) only a taste, but it has to realize that employee retention and broader brand awareness are waiting at the other end of a public stock offering.

3. Netflix will be acquired
The rumors have been around for years, but 2010 should be the year that finds Netflix (Nasdaq: NFLX  ) being acquired. It doesn't have to be the obvious Amazon.com (Nasdaq: AMZN  ) doing the nibbling. There are more potential suitors than you think. The initial stumbling block will be Netflix's reluctance to cash out while it's still growing briskly.

As it stands, Netflix is trying to sway movie studios into offering hot releases through its online streaming platform. That's not going to happen. Netflix will run into enough resistance there -- and recognize that time is running out on optical discs -- to entertain an exit strategy.

4. E*Trade Financial will be acquired
Did you catch how E*Trade's (Nasdaq: ETFC  ) quest for a CEO replacement ended in tapping a board member as interim CEO? That's just one of the signs that the discount broker's next CEO will come from the company that acquires it.

E*Trade has made decent strides over the past year to separate its growing brokerage business from its slammed online banking unit, but it's also a golden opportunity for a larger financial services rival to step in before confidence swells.

5. Apple will go 4-for-4
Forget the tablet computing buzz, the health of Steve Jobs, or the iWhatevers that Apple (Nasdaq: AAPL  ) rolls out over the coming year. Earnings are what will ultimately drive the Cupertino darling's stock, and I believe that Apple will top Wall Street expectations in each of the next four quarters.

That probably sounds like a gutsy market call, but Apple has consistently been trouncing analyst targets for several years.

Play on, 2010.

I'll be back next week with even more predictions for 2010. It's your turn now. Share your market calls for 2010 in the comment box below.

Apple, Amazon.com, and Netflix are Motley Fool Stock Advisor selections. Microsoft is a Motley Fool Inside Value pick. Motley Fool Options has recommended a diagonal call strategy on Microsoft. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz may have his crystal ball bronzed after its 2009 performance. He owns shares of Netflix and is also a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its defiance. The Fool has a disclosure policy.


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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 December 30, 2009, at 2:50 PM, dolvlob wrote:

    "I see all of those "cash for gold" late-night infomercials -- so emblematic of a bubble -- going away."

    I respectfully submit that you are confused. These commercials are beseeching people to SELL gold. If there were a gold bubble, you would expect the commercials to urge people to BUY gold.

    In fact, the continuing prevalance of commercials that urge people to borrow money indicate that there is still a debt bubble (if you can imagine that). A debt bubble spells bad news for inflation and the dollar, which is good news for gold.

  • Report this Comment On December 30, 2009, at 4:58 PM, ThreeBulls wrote:

    $copper went from about 140 to 330 in the past year, but how much talk is there of a copper bubble? In the same time $gold moved from about 880 to a high around 1200. Consider the percentages. Furthermore, bubbles burst, they don't move sideways. Historically, a gold blowup is tied to a silver run, which is nowhere near its past highs. Gold might be in the doldrums now, but talk of a gold bubble isn't supported by history or current numbers.

  • Report this Comment On December 30, 2009, at 8:38 PM, xetn wrote:

    How can you say that there is a gold bubble when almost nobody owns gold? There will be a gold bubble when everyone is trying to buy, like real estate in 2006.

    By the way, gold's recent decline is due in large part to people taking year-end profits and the US Fed selling gold. Nothing goes straight up forever.

  • Report this Comment On December 31, 2009, at 3:57 AM, sofpan wrote:

    I disagree for Gold.

    Gold will keep moving UP.

    Because Gold is the absolute hedge: (a) for economic turbulence times like nowadays and (b) for super inflationary fiat currency ($) .

    It doesn't matter if we have an inflationary or deflationary depression. Gold is The Hedge for real value.

    Happy new year fools!

  • Report this Comment On January 11, 2010, at 4:11 PM, rfaramir wrote:

    Your gold prediction has already been properly discredited, but I'd like to add some clarity to it. The only way for gold to come down is for the dollar to strengthen. That's not happening. Its slide may slow if the spend-way-more-than-we-have party loses big to the spend-a-little-more-than-we-have party, but it'll still slide. Until we audit the Fed and then end it, we will have permanent inflation of the money supply.

    On AAPL, I think you're absolutely right. There's a chance Wall Street could fix its projections, but Apple will continue to perform well. The iTablet could be a hiccup (or a big hit), but Apple overcame the nice-but-overpriced G4 Cube, too.

  • Report this Comment On January 14, 2010, at 10:45 AM, Fool wrote:

    CHICAGO (MarketWatch) -- Lazard Capital Markets analyst Barton Crockett on Thursday downgraded Netflix Inc. /quotes/comstock/15*!nflx/quotes/nls/nflx (NFLX 52.36, -1.60, -2.97%) to sell from hold, saying there are "reasons to question Netflix's ability to meet expectations for continued torrid growth

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