The stock market is a lot like a football game: In the end, it all comes down to the fourth quarter.
Whether we're talking retailers slugging it out during the pivotal holidays or fund managers trying to outmuscle the market averages, the winners will be separated from the losers over the next three months.
I'll go out on a limb with a few predictions, some more outlandish Hail Mary heaves than others.
1. Merger mania will continue
If you think the third quarter closed with a flurry of prolific acquisitions, keep those seat belts buckled.
Deals will likely intensify this quarter, with several factors at play.
For starters, the rally that began in mid-March has been wearing thin lately. Smaller companies with a sense of mortality may be hoping to cash out at the top, and investors can't blame them, given the zesty gains that many companies have tacked on in recent months.
Acquirers will want to use their own inflated shares as legal tender, but the targets will prefer cash for the same reason that they are smoking out exit strategies.
That sets up the perfect environment for greater buyout activity, given that the tech world's biggest names have tens of billions in the bank. Cisco
2. Sirius XM Radio will shed net subscribers
After years of growth, satellite radio took a step back through the first half of 2009. Sirius XM Radio
The recession and moribund auto market have been the scapegoats, leading some to believe that Sirius XM is bouncing back now that the economy has bottomed out and the "cash for clunkers" summertime promotion has breathed new life into dormant auto assembly lines.
I don't necessarily see it that way. I already predicted that Sirius XM will shed 80,000 net subscribers when it reports its third-quarter results next month. It won't get any better over the holidays.
Conversion rates have been slipping. Churn has been inching higher. July's introduction of a music royalty fee of nearly $2 a month is going to nudge out even more fence-straddling subscribers.
Fans will point to the streaming application for Apple's
3. Cheaper console prices won't save the video game industry
All three console makers slashed their system prices sharply during the third quarter, much to the delight of struggling software developers. As Xbox 360, PS3, and Wii boxes get cheaper, holiday shoppers will be more likely to buy them and load up on games.
That's the bullish theory, anyway.
Reality will play out a little bit differently. The companies that have hit franchises -- like Activision Blizzard
Gamers have too many cheaper diversions to occupy their time. Between free multiplayer games such as FarmVille and Mafia Wars on Facebook and the free and nearly free games available for Apple's iPhone and iPod touch, gamers will be buying fewer physical games this holiday season.
Conventional toymakers such as Mattel
4. Amazon.com will gain market share again
As big as Amazon.com
Offline retailers have pitched their tents in cyberspace. After a few false starts, Wal-Mart
Am I crazy? Will merger activity cool off? Is Sirius XM gaining net subs again? Will the video game industry take off after the recent $50 to $100 console price reductions? Is Amazon cruising for a bruising?
I'm shaking my head on all of those questions, but you've got your own jogging noggin. If you agree or disagree with me, let me know if the comment box below.
Apple, Amazon.com, and Activision Blizzard are Motley Fool Stock Advisor picks. Wal-Mart is a Motley Fool Inside Value selection. Try any of our Foolish newsletter services, free for 30 days. That will take you a third of the way into the fourth quarter.
Longtime Fool contributor Rick Munarriz has never won a gold medal. He does not own shares in any of the companies in this story. He is also part of the Motley Fool Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.
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