1. Stocks will rally big time.
Buy, buy, buy!! If you missed the 2009 equities bull market, don’t fret, you’ll still be able to run with the bulls in 2011. I’m callingDow Industrialsat 14,000 by this time next year. Why? Highly productive firms only need a little growth right now to blow the doors off. They won’t get a lot of growth in 2011 in the U.S., but with high productivity, strong global growth, and fewer competitors, they’ll get enough.
2. China speeds ahead.
Another prediction that this is the year China blows up? No – just the opposite: China will continue to manage its economy allowing for strong, sustained growth, but it will continue to speed along market reforms, including market interest rates and greater currency flexibility. China will take some of the froth off for now, and will delay a doomsday prediction for at least another year.
3. There's more media sector consolidation to come.
There is still a long run ahead of us for consolidation in the media sector. In 2010 we saw the death, absorption of some historic news organizations, but there there’s still more to come as publishers explore ways to maximize return on the original content they generate. And rather than a threat to news organizations, the e-reader will be a salvation to such firms—a platform where news can be sold at a premium price.
4. Commodity prices will remain strong.
Continued rapid demand growth in emerging markets combined with lagging supply and inefficient distribution (not QE2) will result in continued strong commodity price increases. This is an emerging market demand story, and we’ll be dealing with it for a long time. Everything that goes into components of the products bought by the world’s newly-minted middle classes will be in greater demand.
5. European growth stagnates, again.
Yes, I do remember those European officials laughing and pointing fingers at the U.S. in 2008. Unfortunately, Europe’s failure to deal with its fiscal and financial sector problems in a comprehensive way means the EU will be trailing with moribund growth for years to come.
I said the Fed would make the mistake of raising rates. Wrong, of course, though pleased they avoided the mistake.
As predicted, Congress failed to pass climate legislation. I’m only amazed anyone thought this was a bold prediction, and I was right in being bullish on emerging markets. They didn’t disappoint; China, Brazil and India economies powered through with strong growth.