2015 trends and themes

It’s that time of year, with everybody rolling out their predictions for the year ahead.  It’s a wonderful exercise to stretch the thinking muscles.  

I've compiled a list of trends, ideas and guesses based on long term charts.  The charts are telling and hopefully the commentary provokes thought.  By no means am I a studied fundamentalist.        

The stock bond ratio will eventually provide a MAJOR hint to asset allocators in 2015.  For now it appears to be a monster top, but patterns morph all the time.

 Global scarcity of investment grade yield drives the yield chase in US stocks.

Most of the developed world is desperate for yield.  Given how panicky investors have been, a high yield sovereign debt incident may quickly remind folks they want investment quality yield.

Of course Wall Street will keep making up exotic products to fulfill these wants, but there is so much yield-hungry money flowing REITS and utilities are bound to be beneficiaries.

Utilities will be a top performing sector for the year.  Later this weekend, be sure to check out my latest post at See It Market.

Here's a sneak peak at the big breakout in Utilities RS.

IYR is trending beautifully after breaking a 7 year base

Investing in Chinese ADRs will be fashionable again. 

The Shanghai and Hong Kong stock market link is the keystone of many actions taken by the Chinese government to legitimize themselves to the rest of the developed world.  Though viewed through a skeptical lense, the anti-corruption measures have led to major crackdowns.  Trust attracts capital.

  

Specifically, Chinese Financials via ETF CHIX could be set to explode. 

That base break in NOAH was something special.  This has double-triple potential over the early December high.

Leisure will win so big, divorce rates will drop. 

The Recreational Products index has broken a 1 year base and the moving averages have started to move higher.

A few names to watch in the group 

CCL – cruises are just now breaking out of a 10 year base      

     

BC – boats are another one breaking a 10 year base

 ACAT – men want big toys and fuel prices were wives second best argument to not buy ‘em.

 Conversely, Personal Products are well positioned for a strong 2015.

  

The sweet spot in Tech is shifting for 2015

The most explosive tech sector of 2014 has been semiconductors up 30% year to date as of December 19^th. 

Semi's continue to look strong into 2015.  However...

The Networking group is shaping up to be the 2015’s version of semiconductors.  I’d even argue this is a more explosive setup.  The acceleration of M2M communications is the monster catalyst to support the move.   It’s just now getting underway

Corporations are still trying to try to figure out mobile/social advertising.  Forrester says companies are wasting ad dollars on Facebook and Twitter.  If corporations agree with Forrester, ads dollars will be spent elsewhere on the mobile web and the main alternative seems to be at the point of sale via mesh networks.     

Cisco will be the top performing DOW 30 stock in 2015.  It’s leading the networking group, with a monstrous multi-year breakout of its own.

Some other networking stocks of note:  FFIV, JNPR, BRCD, SWIR

The Cyber Security ETF (HACK) is hitting new highs as cyber wars rage on.  The build out of mesh networks may provide an added boost to this secular trend.

Some names of note: RDWR, QLYS, PANW, FTNT, CUDA, PFPT, VDSI, IMPV

Spin Off’s will once again provide the bang for the buck they lacked in 2014, sparked by the Ebay - Pay Pal spin finalizing.  Particularly if this pattern breaks higher

A quick read on spin-off’s:  http://www.theglobeandmail.com/globe-investor/investment-ideas/prepare-for-another-year-of-the-company-spinoff/article22166763/

Some other thoughts:

Public Monitoring will continue to explode.  So many scumbags constantly exploit the trust of good humans.  Whether it’s cops or whoever, the proof is in the pudding concept is winning and it will win massively.  Tracking, drones, listening in, videotaping etc…this secular change is accelerating. 

The digital release of ‘The Interview’ will forever alter the movie industry.  Ehhh, maybe not, but this could eventually lead to a whole new category of subscription at Netflix, Amazon Prime or substantially change YouTube’s business model. 

Thanks for reading!  I wish you and yours a healthy, prosperous and all-around excellent 2015!

I have a position in NOAH at the time of posting.