The Best 11 Predictions for 2011

The end of the year is approaching, which means that everyone is busy making guesses about what next year will bring. Rather than crank up the pandemonium further with new predictions of my own, I thought I'd cull some of my favorite predictions from around the investment world (and beyond).

1. Facebook loves eBay!
A Wall Street Journal blog took its forecasting question to venture capitalists and company CEOs to see what they thought was ahead for 2011. My favorite headline they came up with? "Facebook Buys eBay (Nasdaq: EBAY  ) ." My fellow Fool Dan Dzombak recently pegged Facebook's informal valuation at around $56 billion, while eBay's current market value is just $37 billion. Will it happen? Probably not, but it's so off-the-wall that I'm definitely rooting for it.

2. Cyberwarfare
Computerworld ran a list of "10 IT-related predictions for 2011" and while there were a few of interest, "cyberwarfare becomes reality" jumped out. Early in 2010, Google was fending off attacks coming from China; more recently, we saw PayPal, Visa (NYSE: V  ) , and MasterCard (NYSE: MA  ) come under fire from WikiLeaks supporters. The Computerworld predictions suggest that these nasty virtual skirmishes will only increase in 2011. Might this mean that data security companies like McAfee and Symantec (Nasdaq: SYMC  ) could be back at the fore?

3. Panthers get Luck-y
Bleacher Report took a stab at predicting the NFL's 2011 draft and prophesied that the Carolina Panthers would use the No. 1 draft pick on Stanford's Andrew Luck. But didn't Carolina just draft Jimmy Clausen? Yes, but Bleacher Report didn't think much of that move: "Carolina made the mistake of drafting Clausen last year and they're going to make up for it by drafting someone much better." Ouch.

4. Gold gets pummeled
Admittedly, I like this one because I agree with it. As I've pointed out in the past, I just don't think that there's justification for gold at these levels, let alone anything higher. There are a lot of folks talking about a pullback in gold. CNBC's Bob Pisani made it part of his 2011 predictions, saying that gold will drop 20% even as other commodities rally, while TheStreet.com contributor Doug Kass said the metal will finish the year between $1,100 and $1,200 an ounce. Does that mean it's finally time to unload those SPDR Gold Shares (NYSE: GLD  ) ? To be fair to gold fans, who have probably already had enough of hearing this prediction, plenty of folks thought gold would fall in 2010 -- and that didn't exactly prove true.

5. Global blue light special
My fellow Fool Tim Hanson -- who runs the Motley Fool Global Gains newsletter -- called Wal-Mart (NYSE: WMT  ) his favorite international pick for 2011. Yes, you read that right: his favorite international pick. As Tim points out, the company has big plans for countries like China and Brazil, and its stock is trading at a bargain valuation. As a Wal-Mart shareholder myself, I'm giving this call two very enthusiastic thumbs up.

6. Income inequality will decline drastically
Or at least that's what scientist Michael Pupin predicted for 2011 in a New York Times article in 1931. He said:

This civilization is the greatest material achievement of applied science during this memorable period. Its power for creating wealth was never equaled in human history. But it lacks the wisdom of distributing equitably the wealth which it creates. One can safely prophesy that during the next eighty years this civilization will correct this deficiency by creating an industrial democracy which will guarantee to the worker an equitable share in the wealth produced by his work.

That hasn't exactly happened; the past few decades have seen income equality widen drastically. But who knows? Maybe 2011 will surprise us!

7. Bears treated for laryngitis?
Emboldened by the 2010 gains, many forecasters are predicting good things for the stock market in 2011. Estimates from 11 strategists that Bloomberg rounded up suggest another year of double-digit percentage gains for the S&P 500 -- and they're far from alone. BlackRock's Robert Doll sees the S&P closing 2011 at 1,350, Laszlo Birinyi is looking for 1,333, and Blackstone's Byron Wien thinks the index could go as high as 1,565.

8. The King of the Oscars
Entertainment Weekly blogger Dave Karger recently updated his Oscar predictions in the wake of the Screen Actors Guild nominations. His pick for best picture? The King's Speech, with The Social Network and Inception following at the No. 2 and No. 3 spots. Which reminds me -- I need to get out to the movies!

9. Another bite of the Apple
Sick of hearing about Steve Jobs and Apple (Nasdaq: AAPL  ) yet? Well, if IDC is correct, we'll probably be hearing plenty more about the company. Among the research firm's 2011 predictions, it forecasts that "non-PC mobile devices such as smartphones and tablets will outsell PCs within the next 18 months." Apple wasn't named specifically, but I'll go out on a limb and say that it will be a prime beneficiary if this pans out.

10. To the moon with oil
In his "4 Bold Energy Predictions for 2011," Motley Fool energy maven Toby Shute sees oil potentially catching a tailwind that could bring it back into the triple digits. The move will push investors to speculate on lesser-quality energy companies, and won't have a happy ending for investors that get too caught up.

Interestingly, Denmark's Saxo Bank, in its "outrageous" predictions for 2011, said something very similar: "Crude oil gushes above $100/barrel, then falls by one-third."

11. Pie
I love stocks and investing, but I also love to eat. And in the battle for my favorite 2011 prediction, the latter won out. In its 2011 predictions for food trends, restaurant and hotel consulting firm Andrew Freeman & Company had this to say:

If I had one trend -- one trend -- of the year that I could predict, that's why it's in the No. 1 position, this would be the trend for pie ... I think that we're going to make room for pie shops in the next year.

All I can say to that is... "Yes!" Am I the only one that's sick and tired of cupcakes? Besides, who doesn't love a good pie?

Think I've missed any of the great predictions out there? Head down to the comments section and fill me in.

I predict that investors will still be down with dividends in the year ahead and so The Motley Fool's free special report "13 High-Yielding Stocks to Buy Today" could make some rewarding holiday reading.

BlackRock, Google, and Wal-Mart Stores are Motley Fool Inside Value picks. Google is a Motley Fool Rule Breakers selection. Apple and eBay are Motley Fool Stock Advisor recommendations. Wal-Mart Stores is a Motley Fool Global Gains pick. Motley Fool Options has recommended a bull call spread position on eBay. The Fool owns shares of Apple, Google, and Wal-Mart Stores. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Matt Koppenheffer owns shares of Blackstone and Wal-Mart, but does not own shares of any of the other companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool's disclosure policy assures you no Wookiees were harmed in the making of this article.


Read/Post Comments (39) | Recommend This Article (65)

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 23, 2010, at 2:16 PM, TMFKris wrote:

    In terms of FB, and I'm sure this is just me, I am sick of it's willy-nilly changes and the info mining it does to line its pockets with advertiser dollars. Many of my FB "friends" are people from my past, and it was good to catch up with them, but I have no interest in reading daily about their children's sports glory or what vegetable they most resemble. I find myself logging on less and less.

    Kris - TMF copyeditor

  • Report this Comment On December 23, 2010, at 2:25 PM, TMFKopp wrote:

    @Kris

    I'm a zucchini... :)

    Matt

  • Report this Comment On December 24, 2010, at 12:17 PM, MisterBruce wrote:

    12. Zucchini Pie

  • Report this Comment On December 24, 2010, at 12:19 PM, hachmujt wrote:

    @ Kris

    Proudl to say never had FB never will. It is a hot topic with a few friends so thanks.

    J

  • Report this Comment On December 24, 2010, at 12:43 PM, PlanoFoolery wrote:

    I run into an increasing number of friends who refuse to get on FB. These are typically mid to upper middle class suburbanite men. While I have somehow acquired over 800 FB friends myself, few of them fit this description. Most of my FB friends - the ones that are not really "real lif" friends or family - are typically young, active, and female.

  • Report this Comment On December 24, 2010, at 12:56 PM, eanmdphd wrote:

    More listening, less watching and texting.

    Listening is easier on the brain, and no one can forbid you from listening in your car.

    If you are listening on your iPhone, you still have those calls coming in; on your iPOD, you have too many choices, and nothing new, and memory limits ...

    Just sit back and listen... like olden days

    If at work, the screen is going to be monitored, but who is going to monitor you headset; radio is already being played many places.

  • Report this Comment On December 24, 2010, at 1:11 PM, Bonefish100 wrote:

    As to point #6 and the "equitable distribution of wealth," can you say "communism?"

    If our current administration has it's say, we may be headed in that direction.

  • Report this Comment On December 24, 2010, at 3:38 PM, Ax7777 wrote:

    This article is a waste of time to read.

  • Report this Comment On December 24, 2010, at 4:00 PM, TMFBomb wrote:

    Really enjoyed these predictions.

    I'm bearish on cupcakes. Bullish on donuts. A hold to slightly bullish on pie.

    -Anand

  • Report this Comment On December 24, 2010, at 5:06 PM, TMFKopp wrote:

    @Ax7777

    Thanks for sharing your thoughts, very enlightening. Merry Christmas!

    @Anand

    Thanks! I'm very bearish on cupcakes, I think the fad has run its course. Or rather, I'd like to think that the fad has run its course -- I'm not a big cupcake fan. Besides, I think Starbucks offers us cake in enough various shapes and sizes (scones??? yeah, just cake by another name) that we don't need cupcake shops.

    Not sure where I stand on donuts... Love a good glazed on occasion and am a big fan of D&D chocolate munchkins. Though donuts are more of a staple like bagels than a flash-in-the-pan like cupcakes.

    As for pie... Mmmmmmm. I can only hope that if specialty pie shops start popping up they'll have some more exotic selections like shoofly pie -- a personal fav. I also hope that they'll be wise enough to know that there's nothing like a good cup of coffee and a slice of pie. And I would like to emphasize that it needs to be a *good* cup of coffee.

    Matt

  • Report this Comment On December 25, 2010, at 12:55 PM, langco1 wrote:

    ebay is years past its highs and facebook has missed its best chance at going public ..aapl is as anyone can see is played out and gold looks like the short of the year!!

  • Report this Comment On December 25, 2010, at 7:44 PM, rpyrce wrote:

    Well another on spot article. The biggest IPO of 2011 will be Dunkin Donuts

  • Report this Comment On December 26, 2010, at 5:04 AM, TMFAleph1 wrote:

    <<That hasn't exactly happened; the past few decades have seen income equality widen drastically.>>

    Matt,

    The past few decades, perhaps, but what about the past eight, which is the timeframe Pupin was referring to?

    Alex Dumortier

  • Report this Comment On December 26, 2010, at 10:44 AM, rk42 wrote:

    As for pie, I like it too.

    Does anyone else remember the series of pie shops that were built 10-15 years ago. Now long gone. Maybe ahead of their time - or maybe got what they desirved. Their pie wasn't all that great either.

  • Report this Comment On December 26, 2010, at 5:15 PM, crca99 wrote:

    Sometimes I wish TMF would flag what is intended as amusement and what is educational. The jokes went over my head and I agree with above commentator, I just wasted my time here.

  • Report this Comment On December 26, 2010, at 9:32 PM, drsl wrote:

    TOOT (OTC)

    Out of Boerne TX- very good pies- fundamentals of Tootie are a bit suspect as an investment- but excellent pie.

  • Report this Comment On December 26, 2010, at 10:00 PM, TMFMileHigh wrote:

    @drsl,

    >>Out of Boerne TX- very good pies- fundamentals of Tootie are a bit suspect as an investment- but excellent pie.

    A *little bit* suspect? I'd go a little further than that:

    http://www.fool.com/investing/small-cap/2010/07/21/pie-is-ba...

    Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On December 27, 2010, at 8:57 AM, marceloavai wrote:

    Thanks! I'm very bearish on cupcakes, I think the fad has run its course. Or rather, I'd like to think that the fad has run its course -- I'm not a big cupcake fan. Besides, I think Starbucks offers us cake in enough various shapes and sizes (scones??? yeah, just cake by another name) that we don't need cupcake shops.

    a good site about this http://www.avilas.com.br

    happy 2011!

  • Report this Comment On December 27, 2010, at 3:41 PM, Rebkong1 wrote:

    too the moon with oil and yet gold gets pummeled?? makes a lot of sense

  • Report this Comment On December 27, 2010, at 6:23 PM, TMFAleph1 wrote:

    How does facebook pay for this hypothetical acquisition of eBay? A facebook IPO would be required first.

    Alex Dumortier

  • Report this Comment On December 27, 2010, at 6:24 PM, car1020 wrote:

    can't believe anyone still listens to the "pundits" on the Street.con or Pasani or anyone else one CNBC !!!!!!!!!!!!!!!!!!!!!!!!!11

  • Report this Comment On December 27, 2010, at 9:38 PM, ynotc wrote:

    Did it ever occur to anyone that many of the people at the bottom of the income inequality do not put forth the effort required to reach the top. The cool thing about this country is that no one is holding them back excpet themselves. You act as if there were some invisible barrier and by redistributing the wealth by some "equitable" means that we would have utopia. As long as people have the opportunity to succeed income inequality is not an issue. When you take away the opportunity is when we should worry. The constitiution does not guarantee happiness only the right to pursue it. The thing we need to worry about is government setting up barriers that remove peoples ability to pursue "happiness" as they define it. To some people happiness is not making a mint it is taking care of their families and popping a cold one.

  • Report this Comment On December 28, 2010, at 1:40 PM, jm7700229 wrote:

    Was there a cupcake fad that I missed? OMG!!! Please Tweet me if the pie thing takes off -- I couldn't stand to miss another one.

    Facebook? I never liked its policies or lack of security. I'll pass: if my friends aren't literate enough or interested enough to even e-mail me, they aren't my friends anyway.

    Income equality? Recheck your timeframe. It is way down from the early thirties. I believe that much of the growth in inequality has to do with our immigrations policies -- high achieving, educated people can't get in, but we have illiterate field hands pouring over the border. My Econ 101 course says this will drive up pay for high achievers while pushing down pay at the other end of the scale.

    And I am definately a doughnut (not donut!!) man.

  • Report this Comment On December 29, 2010, at 2:33 AM, whyaduck1128 wrote:

    Ax7777,

    "Time enjoyed wasting is not time wasted."--attributed to Abraham Lincoln

    I see too many people killing themselves doing too many things in too short a time, never stopping, never content, never simply absorbing the good slow things of life. This article is not 100% serious. it was not intended to be. We should not be 100% serious, either.

  • Report this Comment On December 29, 2010, at 8:57 PM, TMFKopp wrote:

    @Alex

    "The past few decades, perhaps, but what about the past eight, which is the timeframe Pupin was referring to?"

    It's widened. However, there was a period for a while after the prediction where the gap contracted.

    http://www.slate.com/id/2266174/

    Matt

  • Report this Comment On December 29, 2010, at 9:04 PM, TMFKopp wrote:

    @Alex

    "How does facebook pay for this hypothetical acquisition of eBay? A facebook IPO would be required first."

    Not necessarily if we get creative... We could get some complex leveraged buyout where the current Facebook backers partner with an LBO shop or two, raise a bunch of debt, buy eBay off the public markets and combine the two companies.

    Or it could be a reverse merger where the combined company stays publicly listed but the current owners of FB own > 50% of the NewCo.

    I'm sure I could get even more exotic, but not without bringing Jawas into the mix (they're crafty little critters...).

    Matt

  • Report this Comment On December 29, 2010, at 9:07 PM, TMFKopp wrote:

    @ynotc

    "The cool thing about this country is that no one is holding them back excpet themselves."

    Yes, precisely, because everyone can afford tuition at the best universities. And every family can afford to buy their kids their own computers and send them to educational summer camps. And everybody has family connections at high levels of major companies that can provide an easy route to a job in the industry.

    You're exactly right, everyone is on perfectly level footing in this country.

    Matt

  • Report this Comment On December 29, 2010, at 9:09 PM, TMFKopp wrote:

    @whyaduck1128

    "We should not be 100% serious, either."

    Amen to that! I'm not sure that an investing website would have named itself "The Motley Fool" if it intended on 100% seriousness either... :)

    Matt

  • Report this Comment On December 29, 2010, at 9:32 PM, TMFAleph1 wrote:

    @Matt,

    I don't see it.

    With regard to your first scenario, there have only ever been 5 LBOs with a total transaction value in excess of $35 billion and three of them occurred between November 2006 and June 2007. A mega-deal of this type is not do-able right now nor will it be for quite a while, in my opinion.

    I suppose one can't completely rule out some other sort of financial engineering to put a deal together (bankers can be very creative).... but I see it as rather unlikely, particularly in this environment.

    Alex Dumortier

  • Report this Comment On December 30, 2010, at 1:33 PM, TMFKopp wrote:

    @Alex

    Oh don't get me wrong, I don't consider the acquisition at all likely. Far more likely is your prediction that Facebook will go public (http://www.fool.com/investing/general/2010/12/29/2011-stocks..., for those playing the home game...). But the idea of Facebook acquiring eBay was just crazy enough for me to really like it, so I'm going to keep rooting for it.

    Matt

  • Report this Comment On December 31, 2010, at 12:06 PM, onthegulf wrote:

    I am probably stating the obvious but be very careful with trying to time the gold bust. Bubbles often double as easily as bust. Remember "irrational exuberance..." He was right but if you had shorted tech when he said it you would have lost all your money on a margin call.

    BTW, I plan on investing in pie, one pie at a time.

  • Report this Comment On December 31, 2010, at 3:43 PM, rvcunningham wrote:

    in item #6 the key word is workers, there is to many in this country that don't want to work at anything! they cry about not having anything, but do nothing to help themselfs then blame us for their plight. Oh im'm sorry they do sign up for all the gov. programs that they and their friends can learn about. pineapple upside down for me please....

  • Report this Comment On December 31, 2010, at 4:30 PM, meatmann50 wrote:

    As for point #6,people must create their own wealth,create their own pie,if you will,and stop taking pieces of everyone else's pie.I don't want no-ones pie,I'll bake my own,thank you.This country's about creating your own wealth,not about taking other peolple's wealth,unless of course you link yourself to this administration.

  • Report this Comment On December 31, 2010, at 5:34 PM, rook1231 wrote:

    Do you include entertainers and athletes it your income inequality?

  • Report this Comment On December 31, 2010, at 6:01 PM, TMFKopp wrote:

    @onthegulf

    "be very careful with trying to time the gold bust."

    Agreed 100%. Just because the current price doesn't make sense doesn't mean that it will start to decline now or even six months from now. For that reason, I'm not suggesting shorting gold, but I'm certainly not a buyer either.

    "BTW, I plan on investing in pie, one pie at a time."

    If you mean by eating one pie at a time... well, then I'm with you there too :)

    Matt

  • Report this Comment On December 31, 2010, at 6:08 PM, TMFKopp wrote:

    @rook1231

    "Do you include entertainers and athletes it your income inequality? "

    First, it's not "my" income inequality -- I'm working off of others' existing work there. And as far as I can tell, yes, it includes everyone and does not exclude athletes and entertainers.

    Of course if your point is that it's primarily athletes and entertainers' incomes that are pushing up income inequality, I'd point out that the incomes of many in the business (and particularly the finance) world make even the highest paid entertainers and athletes look like nothing.

    The highest paid athlete in 2009 was Tiger Woods (who could really be considered more of a salesman since most of his income comes from advertisements), and he pulled in roughly $100 million. George Soros was *not* the highest paid hedge fund manager in 2009 and he pulled in $3.3 billion.

    Matt

  • Report this Comment On December 31, 2010, at 6:33 PM, bryanmit wrote:

    What happened to the pie stores of the 70's?

    Some expanded into successful restaurants. I wish I had jumped on a little pie and coffee shop called Marie Callender when it first went public.

    Nufool

  • Report this Comment On January 01, 2011, at 12:42 PM, Pandorabelle wrote:

    Employers in increasing numbers will continue to block FaceBook and most (all?) other "entertainment" sites as they realize the company time/productivity being lost to recreation.

    Participation will dwindle as people are forced to dedicate more of their time to making enough money to survive...leaving them tired -- with less time for family, community, and recreational activity....and ultimately more easily manipulated by the government/media.

  • Report this Comment On December 26, 2011, at 4:34 AM, garifolle wrote:

    Now that 2012 is there, will you make a retrospective analysis of your predictions?

    The one I doubted most, but it was probably more an April's fool then a prediction, was # 6!

    Are was it sarcastic?

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