@firstadopter Top 10 Predictions for 2013
It’s that time of year again. Take a look at my top 10 predictions for 2012 for a fun read (Link).
Remember I’m a bigger fan of reacting to important fundamental inflection point news AFTER the fact rather than making decisions from far off in the future predictions. I do however find it useful to crystallize my current leanings and thoughts with this top 10 list. I reserve the right to change my mind at any time as new data-points are released. Here it goes:
1. Amazon will print poor results with decelerating revenue growth and horrible earnings due to greater price competition from Google/Apple/Best Buy/Walmart/Target, higher effective end-user pricing from new states sales tax collection, the secular shift in the media business from physical to digital, and the imploding Kindle business (Shhh, no-one talks about how Kindle hardware units were down around 50% y/y in 2012) as Apple’s iOS and Google’s Android full mobile OS eco-systems dominate tablets and smart-phones. Investors will also realize that the AWS cloud business is a commodity utility with no pricing power. The result of all this is the stock will finally go down a lot.
2. The current $85 billion-a-month QE infinity program by the Federal Reserve will stop by the end of 2013 as even Bernanke realizes the costs/benefits of QE at this stage aren’t worth it.
3. The secular shift from PCs to mobile computing (tablets and smart-phones) will even accelerate from here. ARMH/QCOM/SNDK/GOOG/AAPL/Samsung/Imagination will continue to benefit, while HPQ/DELL/INTC/MSFT/WDC/STX/LXK will continue to hurt.
4. RIMM’s Blackberry 10 launch will fail due to lack of app support just like the Microsoft Surface tablet.
5. Barnes & Noble’s Nook HD hardware business will continue to disappoint along with the Amazon Kindle Fire. Consumers will realize getting a full tablet operating system features/functionality with 16 times more apps, faster processor, and snappier user interface at around the same price with a Google Android tablet or iPad Mini is by far the smarter option.
6. Amazon will launch a Kindle Fire smart-phone and lose hundreds of millions if not billions on it trying to compete with Apple and Google. Good thing they raised the $3 billion in debt recently.
7. Housing will improve. Zillow will benefit by becoming the predominant way house buyers access real estate information with its mobile tablet and smart-phone apps. The company will really hit its stride in the back half of 2013 as its business model shift to focus on B2B instead of consumer display ads bears fruit.
8. J.C. Penney will disappoint and become Borders Group Part 2 for Bill Ackman. The company will need to raise capital by the end of the year. If they can’t raise capital, bankruptcy will occur.
9. Green Mountain Coffee Roasters will miss its 15-20% sales growth target for 2013 as the company stuffed the channel, pulled forward both brewer and K-cup business through massive rebates/discounting in late 2012, and from rising competition on both K-cups (patent expiration) and brewer hardware.
10. The Dallas Cowboys will surprise everyone and make the playoffs next season on its way to the Super Bowl. The defense will be in the top 5 in the NFL led by Sean Lee and a lock-down secondary. Tony Romo will actually come through in the clutch and Dez Bryant will improve and become the best receiver in the league.