Time certainly flies when you're having fun -- and much fun was to be had this year, with all three major market indexes returning well more than 20% year to date even after the largest pullback in months took place this past week.
To keep this joyous spirit going throughout the next week and a half leading up to Christmas, I've decided to once again count down this holiday season with my own Foolish rendition of the "12 Foolish Days of Christmas." Instead of turtle doves, French hens, and partridges invading pear trees, you'll be privy to high-growth stock ideas, game-changing innovations from a wealth of industries, unique ways to fuel your retirement account, and so on.
Over the previous six days of our Foolish holiday kickoff, we've counted down the:
- 12 Large-Cap Stocks Set to More Than Double Their EPS in 2014
- 11 Game-Changing Drugs Approved by the FDA in 2013
- 10 Sustainable Dividends Currently Yielding More Than 5%
- 9 Economic Indicators You Need to Follow
- 8 Little-Known Social Security Facts and Benefits
- 7 Under-the-Radar Stocks You Could Hold Forever
Now it's time to move the countdown lower by a notch!
"On the sixth day of [Foolish] Christmas my true love gave to me ..."
Six revolutionary trends you should be watching in 2014!
The problem with new inventions, medicines, technologies, and so on is that there are simply too many of them each year. Some become the next big thing, while others turn out to be nothing more than flashes in the pan. That's why today I'll attempt to cut through the white noise and point you toward six key trends you should be watching in 2014.
1. Tissue bioengineering
The big name here that's been drawing all of the attention is Organovo Holdings (NASDAQ:ONVO), which offers the promise of engineering human organs, developing toxicology assay tests, and creating live cancerous tissue samples for clinical labs to use for testing purposes. We're essentially taking Star Trek and bringing it to the real world if this company can live up to its promises.
As my Foolish colleague Maxx Chatsko noted back in November, about one-quarter of all clinical-trial drugs that failed between 1990 and 2010 were withdrawn due to higher-than-expected levels of liver toxicity that couldn't be predicted in a preclinical setting. Imagine how much money could be saved had a 3-D liver assay test been available 20 years ago!
All eyes should be on Organovo, as it plans to release its first 3-D liver assay test in late 2014. The big question will be how quickly the company can generate revenue and whether this wave of tissue bioengineering is sustainable or about five to 10 years ahead of its time.
2. 3-D printing
3-D printing is no longer the revolutionary shock-and-awe product it used to be, and 3D Systems (NYSE:DDD) and Stratasys (NASDAQ: SSYS) are seeing their competition balloon to include ExOne (NASDAQ: XONE) and the recently public VoxelJet (NYSE: VJET). But that doesn't mean 2014 won't be a pivotal year.
The allure of 3-D printing is that the ability to make small, midsize, and large-sized prototype parts could save weeks or months and millions of dollars in development costs for industrial-machinery companies and various other business sectors. Theoretically, as these machines become more prevalent, their price should fall and smaller businesses should be able to afford them, thus sparking a new industrial revolution.
The question this year is: Can these businesses grow organically without gobbling up dozens of competitors? 3D Systems, for example, has acquired more than two-and-a-half dozen businesses since the recession, which has helped to boost its growth rate. But how much of that growth is really organic? That's what remains to be seen. The upcoming year should be a big test for the viability of near-term 3-D printing growth and the lofty valuations that permeate the sector.
3. Mobile money
2014 promises to see big progress in moving your wallet out of your back pocket and onto a mobile device such as a smartphone or tablet.
Online marketplace eBay (NASDAQ: EBAY), for example, has been attempting to rebrand its business focus around mobile-payment platform PayPal for years, as mobile payments made with the click of a button or the swipe of a finger could revolutionize retail purchases and potentially cut down on fraudulent activity.
The big question I have on my mind -- and that you should be focused on -- is whether or not this is the year in which near-field communications technology takes off. NFC is a chip built into your smartphone or tablet that can use radio frequencies to pay for items from an authorized account. In essence, it's an EasyPay for your phone or tablet! Investors have been waiting years for this virtual technology to take off, but they've been left largely disappointed. If this is the year that NFC finally takes off, Dolby Laboratories (NYSE:DLB) is the name to watch, as it owns a good chunk of the licensing rights to the intellectual property behind NFC chips.
4. Electric vehicles
We all know that Tesla Motors (NASDAQ:TSLA) has revolutionized the car industry by successfully introducing the first new car brand in 50 years -- and it's an electric vehicle, no less! But it takes a lot to bring a revolutionary product from roughly 20,000 units produced per year to about 40,000 per year. Can it be done? That's what investors will want to watch for in 2014.
Following numerous delays with the Model S, Tesla has been meeting or beating production estimates for nearly a year now. Investors expect that the Model X SUV will help Tesla meet its 40,000-unit target with its debut later this year, but I remain skeptical given that the Model X was already pushed back a full year.
Furthermore, it remains to be seen what sort of longer-term infrastructure will be put into place in terms of plug and/or battery stations for trips that are outside of the Model S' normal driving range. This will be a defining year for Tesla that determines whether it keeps its lofty valuation or short-sellers drag it back down.
Is this the year when biofuels finally take off as sources of electricity? I'd say there's a possibility.
We've now had two years to witness Hawaiian Electric Industries' (NYSE:HE) biofuel and biomass experiment in Hawaii, wherein the electric monopoly is utilizing biofuels and biomass to generate electricity. Not only are these biofuels cleaner-burning than most fossil fuels, but they can be purchased for long periods of time at relatively low fixed costs, which keeps energy prices down for consumers and allows the electric utility to rake in consistent cash flow.
Last year, Google (NASDAQ: GOOG) experimented by using a Cool Planets Fuel Systems energy blend that utilized biodiesel and gasoline in a ratio of 5% to 95% and managed to drive a vehicle more than 2,400 miles, meeting California's low carbon emission standards seven years ahead of schedule. Long story short, the technology to make biofuels a viable energy source may finally be here.
6. Recreational marijuana
The final trend worth keeping an eye on in 2014 has to do with the ongoing push to legalize marijuana at the state level and possibly even the federal level.
This past year saw Washington and Colorado pass laws that allow some level of in-home recreational marijuana usage. It's quite possible, with growing support in other states -- as my Foolish colleague Brian Orelli noted last month -- that more than a dozen states may soon join those ranks. If that's the case, we could have a revolution on our hands that could turn a previously illegal substance into a legally controlled drug generating more than $10 billion in revenue annually within a few years.
Being that it's currently an illegal substance, I don't have any particular companies to point you toward to keep your eyes on -- but the trend and politics surrounding this push, which is gaining support from citizens across the U.S., is worth monitoring closely.
Fool contributor Sean Williams is short shares of Tesla Motors, but has no material interest in any other companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
The Motley Fool recommends 3D Systems, Dolby Laboratories, eBay, ExOne, Google, Stratasys, and Tesla Motors. The Motley Fool owns shares of, and recommends 3D Systems, eBay, ExOne, Google, Stratasys, and Tesla Motors. It also has the following options: short January 2014 $20 puts on 3D Systems, and recommends Dolby Laboratories.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. The Motley Fool has a disclosure policy.