Here we go again. This year is starting out to be like 2014 – excessive and unwarranted selling. Oh well. It is true, you can’t fight the tape. It is what it is and it ain’t no more. We just have to be patient while the market does its thing.
In the meantime, think about where you might put your money this year.
- Citigroup (C) and other big banks including Bank of America (BAC), J.P. Morgan Chase (JPM) and Wells Fargo (WFC) will see double-digit percentage gains in 2015 on an improving economy and easing regulatory burdens.
The financial sector has been slowly moving toward ripe for some time now. The pace might pick up this year a bit, as the burdens of legal costs from the meltdown of 2008 start closing out. As well, some finality on the Dodd-Frank legislation will come into play. Clarity is a good thing for market players and when they see it, along with the dissipating legal costs, the above “prediction” just might become actualized.
- Dish Network jumped on board the á la carte television bandwagon Monday, announcing plans to offer a standalone streaming video service that includes about a dozen popular cable channels.
Another place to look for possible trades and/or investments is in the media streaming zone. Yes, you can look straight to the big dogs, but keep in there is some serious competition developing in this arena. My thinking is you go to the smaller players that supply the hardware and software for the streaming. For example, here is what is happening with Roku.
- At this year’s CES show Roku CEO Anthony Wood announced partnerships with two Chinese TV manufacturers to build flat-screens running Roku’s own OS and hardware, eliminating the need for an external set-top box. Today, the US subsidiaries of those companies, Hisense and TCL have officially announced their Roku TV lineups.
The above are not trades, per se, but they do represent the idea well. As to the end-user, well, the consumer market will pick up in 2015, especially since the US and global consumers will have more discretionary income to spend on watching “a la carte” TV.
- Low oil prices will last long enough for one of two events to happen. The first possibility, the one most traders and analysts seem to expect, is that Saudi Arabia will re-establish OPEC’s monopoly power once it achieves the true geopolitical or economic objectives that spurred it to trigger the slump.
- The second possibility is that the global oil market will move toward normal competitive conditions in which prices are set by the marginal production costs, rather than Saudi or OPEC monopoly power. This may seem like a far-fetched scenario, but it is more or less how the oil market worked for two decades from 1986 to 2004.
Lower oil prices are the big reason global consumers will have more money to spend on TV, and they are not likely to go back up for some time. The first of the above two necessary events will not occur for a while, as US oil producers have been so successful hedging oil prices they can hold on for some time to come as prices go lower.
The second possibility will result from the first. Oil prices will be subject to supply and demand forces because everyone will be hard at work trying to capture and/or keep market share, especially as the next generation of fuel-efficient cars get on the road in 2015.
My point is – don’t worry about the falling market. The above will ensure it will come back, and when it does, be prepared to find some buys and then make your bets.
Trade in the day; invest in your life …
