Rain on the 'cloud'
Before I get to my prediction, can we all just agree to end this notion of so-called 'cloud' computing. A few years ago the idea of running software from a remote computer was new and novel. Now it simply is computing. With the exception of some specialized software I use to analyze my race car, I can't think of any programs I run natively on the hard drive. Perhaps we in the media should start referring to old-school software as "ground" computing instead, because that seems to be the anomaly rather than the norm.
Rant over, my prediction: Be careful of any tech company that's gotten a boost simply because of the "cloud" story. Many of these companies are trading at earnings multiples in the high double or even triple digits (if they have any earnings to make a multiple at all). Can a company truly grow into a valuation of more than 10 times sales? We'll see. And that's not to say there aren't some spectacular companies doing innovative things, but any company that is not running software as a service seems antiquated. Just as all things "dot com" captured the attention and stretched multiples in the late '90s, so too is this notion of the cloud today. I would not be surprised to see some of the multiples contract on the "pure play cloud"–type companies.
Gold = Tired Old Mule
For the record, I like mules. A noble pack animal that serves a purpose, it doesn't need much affection and gets the job done. So perhaps I should not compare gold to mules, because I feel that gold will continue to be the opposite: serve no purpose, needs love and doesn't get much done. It's a boring prediction for me, as my loyal viewers and readers know: I have been negative on gold for more than three years. The reasons I was negative then are the same reasons I am still negative now—a recovering global economy, lack of inflation, currency stability and less need for central banks to purchase gold because of currency stability. Boring or no, people love gold; thus, my need to address my views heading into next year.
(More predictions: Your software is going to get smarter)
I'll add this to the gold story: One thing that has me nervous and could prove me wrong is supply. If prices keep falling, some of the higher-cost gold producers may take production off-line. That could put a floor under the price. By the way, for anybody interested in gold, its history, some of the horror stories involved in mining the middle, and just a great understanding of how the gold market works, I highly recommend Matthew Hart's new book, simply entitled "Gold." It's well worth a read.
—By Brian Sullivan, co-anchor of CNBC's "Street Signs." Follow him on Twitter