Rearview mirrors come in handy. At the very least they won't let you down the way wiper blades are prone to do. So let's take a closer -- and at times lighter -- look at this newsworthy year in the financial markets.
January
Remember the Island of Misfit Toys? How about the aisle of misfit toy stores? KB Toys filed for Chapter 11 bankruptcy protection, on the heels of FAO Schwarz's filing a month earlier. Later in 2004 it would be Toys "R" Us (NYSE:TOY) publicly pondering selling off its namesake chain to focus on its more lucrative baby business. Traditional toy retailers struggling with relevancy shouldn't come as much of a surprise. Discount department store chains and consumer electronics superstores find themselves stocking the hottest toys these days. But it's a shame to see a traditional feel-good niche coming apart at its stitched seams. If only Monopoly money were legal tender.
February
It's not every year when a Super Bowl halftime show upstages the gridiron contest itself, but one quick flash of Janet Jackson's right breast sent ripples through the broadcast industry. Quicker than you can say "TiVo!," fines and a more vigilant FCC reshaped the future by eventually catapulting Howard Stern to a five-year, $500 million contract with Sirius Satellite Radio (NASDAQ:SIRI). Think free radio will be this generation's buggy whip? The two satellite radio upstarts would go on to sign up a projected million new subscribers during the last three months of 2004 for a migration of 4 million avid radio listeners. Nipplegate may have been a televised event, but it was conventional commercial radio that was exposed for wearing no clothes.
March
Shareholders with pitchforks, mouse ears, and helium balloons stormed Disney's (NYSE:DIS) toilet-papered castle when a whopping 43% of the shares cast during the company's annual meeting in Philadelphia voted against retaining CEO Michael Eisner on the board of directors. That's a pretty stunning sum when one considers that many other irate investors who chose not to cast their vote against Eisner were technically lumped into the narrow head-nodding majority.
A turnaround at the company's beleaguered ABC network come autumn helped. A retirement announcement reminiscent of the perpetual Rolling Stones farewell tours in which Eisner announced he would be stepping down two years later pacified. Bitter shareholders turned in their pitchforks for Mickey Mouse ice cream bars and walked away happy.
April
Tainted mutual fund giant Janus Capital Group (NYSE:JNS) took the next step in the cleansing process by wrapping up a $225 million settlement stemming from fund manager trading improprieties a year earlier. It was one of the many righteous conquests spearheaded by New York's attorney general Eliot Spitzer who would later move on to target wrongdoings at Marsh & McLennan (NYSE:MMC) and the music industry in October. Spitzer has built an impressive housecleaning record. Thankfully for Mr. Softy, he doesn't do Windows -- yet.
May
Investing in Krispy Kreme (NYSE:KKD) is a lot like biting into one of its signature doughnuts. It can often be glazed over and it just doesn't taste the same if it's not hot. The company cooled off in a hurry in May when it announced that it would fall short of its profit targets. With the chain expanding too quickly, low-carb dieters electing to drive past "Hot Doughnuts Now" neon signs, and questionable franchise transactions, the company also had as many holes as a fresh batch of chocolate iced crullers.
June
What is it about Vegas and shotgun nuptials? MGM Mirage (NYSE:MGG) announced that it would be scooping up fellow gaming giant Mandalay Bay. Not to be outdone, Harrah's (NYSE:HET) was found on bended knee a few weeks later proposing to Caesars Entertainment.
While it's just a rumor that an Elvis impersonator would serve as the justice of the peace, the sector's consolidation is noteworthy. Las Vegas is booming even as various casino operations begin sprouting up all over the country, so growth by absorption seems almost as sound a strategy as never hitting on 20 in blackjack.
July
This is not a short sentence. This is. And speaking of light sentences, Martha Stewart's trading scandal entered its final stage when the crafty diva was sentenced to serve five months in jail, followed by five months of house arrest. Don't worry. She has already teamed up with Survivor and The Apprentice creator Mark Burnett for a new hourlong television show.
August
The most anticipated new stock offering in years came and went with Google (NASDAQ:GOOG) going public at $85 a pop. The Internet darling lived up to the hype, more than doubling in the months that followed. Was the stock overpriced? With a market cap of $50 billion by year's end it certainly seemed bent on testing the definition of its moniker's inspiration. A googol is a one followed by a hundred zeroes. Speaking of being followed by a bunch of zeroes, what's the deal with all of those people going on reality television shows willing to be humiliated for the sake of a job or a date?
September
Things got hot in the panhandled state of Florida when it was besieged by four hurricanes just as summer came to a close. Homeowners and insurers shed some tears, lamenting the windstorm losses. While the state's various theme park and cruise line operators braced for the worst -- including some of those Disney buffs from the March meeting that found the cruel winds blowing their Mickey head ice creams clean off their sticks -- the area's tourist industries ultimately produced decent growth over the course of the year. But no, the moral of the story isn't that everything will work out in the end if you have four eyes watching over you. I've seen more than a few bespectacled referees totally blow some calls.
October
If you've never seen a line of elderly patrons begging to be shot you probably bypassed the long queues that were created when Chiron (NASDAQ:CHIR) created a flu shot shortage when it revealed that its license to produce its popular influenza vaccine was suspended due to contamination concerns. With rivals challenged to make up for Chiron's shortfall it was going to be a long winter for sniffling souls -- or the mother of all investing opportunities for those looking to buy into tissue paper manufacturers.
November
Remember that awkward moment at the high school dance when everyone manages to pair up except for the two unwanted misfits that concede a sigh before deciding to give it a go on the dance floor? No, this is not a presidential election aside. You've come to the wrong annual recap if you wanted political commentary. I'm talking about the two unpopular retailers that decided to wear bunny slippers to the sock hop. Yes, Sears (NYSE:S) and Kmart (NASDAQ:KMRT) announced that they would be merging to help create a department store entity with a better shot at taking on their more relevant peers. I'd suggest a makeover and a name change. How does Wal-get or Tarmart sound?
December
The Greenspan Five isn't the latest lip-synching boy band. In fact, Fed Chief Alan Greenspan is probably older than the members of the typical boy band combined. Oh, that and he writes his own material. Anyway, the Fed completed a year of tightening economic policy by unleashing its fifth interest-rate hike in 2004.
The increases may not have amounted to much as each one called for a mere quarter-point uptick but if you haven't gotten the hint by the fifth "pssst," let's not ignore the trend here. It's not too late to refinance your home but don't wait too much longer. I hear Greenspan warming up backstage. He looks like he may be ready to belt out another tune sooner rather than later.
And then the year winded down, Stocks 2005 was released and one Rule Breakin' Fool decided to adjust that rearview mirror one final time -- only to never look back again.
Until next year I remain,
Rick Munarriz
Longtime Fool contributor Rick Munarriz doesn't know what to do first, make some New Year resolutions or break them. He does not own shares in any of the companies in this story. He is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
