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.
