I'm in a particularly masochistic mood this week. I'm up to slapping on a red rubber clown nose, strapping on some outlandish polka-dot overalls, and straddling the ledge above the carnival dunk tank. I'll let out a heckle or two -- just to appease my inner sadist -- only to beg you to take your best shot.
See, I realize that some of the financial predictions for 2005 that I'm about to make are going to cut so far against the grain that even contrarians will be branding me a renegade. I don't mind. And to make things interesting, this is the first of a two-part series, only next week's follow-up looks like an empty page right now. That's because I'm going to need you to step up to the dunk tank and hurl something fierce my way.
I've always been pretty accessible. Most people who have bothered to click on my byline or written me using the email link at the end of my articles can vouch for that. This week, it's actually going to be a requirement because your counterarguments -- whether clear, righteous, or venomous -- will help me complete the second part of this interactive experiment.
So if you're ready to aim, here come the targets.
Shares of Apple will fall in 2005
Yes, I know. I'm angering a whole lot of people with this call. That's the point. Apple Computer
Apple did put up an incredible quarter last week. Spectacular margins. Strong earnings. It was already booming in digital music thanks to its iPod and tune-peddling online storefront, and now its bread-and-butter computer niche is percolating. But where do we grow from here? I'm not sure that the iPod as an appliance lends itself to the same perpetual upgrade cycle as PCs. I'm not the only one left unimpressed with Apple's pipeline of micro gadgetry. And as fond as I have been of Apple in the past -- and continue to admire it as a company -- scooping up Apple at 55 times trailing earnings no longer has that limited downside cushion that the stock once had.
Sirius will be signing up more new users than XM by year's end
Heresy? After all, despite the Howard Stern, NFL, and Mel Karmazin hype Sirius Satellite Radio
Easy. Stern's migration won't take place until the end of this year. That will give Sirius a big marketing tool during the 2005 holiday quarter. You also have a programming guru in Karmazin to help differentiate Sirius' content offerings over XM while many of the factory-installed equipment deals that XM benefited from early in the adoption cycle are now working for Sirius as well. I think both companies will lap their 2005 subscriber targets, but on an absolute basis I believe Sirius will sign up more new users in this year's final quarter than XM.
Krispy Kreme will bounce back
I'll admit that this prognostication seemed more radical before CEO Scott Livengood announced that he was stepping down earlier this week, even though the words "Krispy Kreme" and "bankruptcy" are being used in the same sentence even now by some folks who were right on target in slamming the company last year. A head transplant to save the day? It obviously isn't enough to erase the excruciatingly long list of corporate miscues at Krispy Kreme
The problems at Krispy Kreme run deep. While financial restatements, inappropriate channel stuffing, loan defaults, and questionable franchise sales have muddied up the company's corporate image, its doughnut sales aren't doing so hot either. That's the real problem, long after the class-action lawsuits are done rolling off the litigious conveyor belt and glazed doughnut halos float above boardroom heads.
Back in May I wrote about how Krispy Kreme could be saved by things like revamping its retail distribution and upgrading its java offerings. I still think it can happen -- and I think it's going to happen sooner than later. I wouldn't be surprised to see Krispy Kreme close out the year as one of 2005's best performing stocks.
TiVo will bounce back
How many buzzwords are dressed as penny stocks these days? Trading shy of the $5 mark, maybe we can try TiVo
I think so. For starters, DirecTV actually accounted for a tiny chunk of the company's subscription business. Sure, its financials look sloppy now as it continues to digest the gargantuan new unit rebates, but that's simply laying down the groundwork for growing its installed base of users.
Amazon won't enter this country's DVD rental market alone
The very whiff of Amazon
Today's Amazon isn't looking to repeat its early days of youthful indiscretion and razor-thin gross margins. It would sooner enter into the airline industry before it takes on the price war insanity going on domestically between Netflix and Blockbuster.
So what are you waiting for? Did I miss the mark on any of these? All of them? The ball is in your hands. I'm perched above the dunk tank, taunting you with that childhood nickname that you thought you would never hear again. Behind the makeup I'm that harmless buddy who will help you spot the next great stock trend in our Rule Breakers newsletter service, but today I'm a clown -- and I'm laughing because you couldn't hit the tank's bull's-eye no matter how hard you try, bub. So why are you still waiting around? Take a shot, pal. Prove -- once and for all to those around here -- that I'm all wet.
Longtime Fool contributor Rick Munarriz really does want your feedback -- as long as you heave it his way before Monday, Jan. 24, 2005. Sign your email the way you would like to be referred to if he used your response. He owns shares in Netflix but not in any of the other companies mentioned in this story. He is also a member of the Rule Breakers analytical team.