I had a great conversation this week about the “haves” and “have-nots” in the market.
One of my members was asking about where I think the market was headed and my answer surprised them …
You see, normally people expect to hear one of two words.
Up or Down.
That is not what they heard from me …
I said that this will be the year where companies begin to show separation.
There will be strong individual companies that thrive and others that realize they are doomed.
After seeing what a positive reaction the members had, I wanted to go public with this.
The market is tough to predict.
There are great reasons why it will go down and strong arguments on why it will rise.
Kind of a 50/50 scenario but I avoid those scenarios.
Instead, let’s focus on individual opportunities.
Companies that have tremendous momentum and other’s that are about to hit the panic button.
Technology is trending.
Specifically, technology that is accessible (free or extremely cost effective) and convenient.
Amazon (AMZN) is a great example.
Just look at Amazon Prime. It’s extremely cost effective. It’s easy to use and there is free two day shipping. This is the modern day customer experience. Similar companies that are not public but could be soon are Uber and Seamless Web. They remove the social interaction and instead allow you to access necessities (food and transportation) via your phone or computer.
Look at Facebook, Instagram and Twitter.
Hundreds of millions of users and the service is free.
The more we as consumers get of that, the more we will expect.
More for less.
It starts to eliminate the need for brick and mortar retailers.
Why go to Bed Bath and Beyond (BBY) to buy a household item when Amazon Prime will show you the top rated product, regardless of price and ship it to you.
Why buy a birthday card at Hallmark when you can post a beautiful picture of you and your friend as you publicly wish them a Happy Birthday on Facebook.
Don’t take my word for it, just look at what has happened and what is happening.
Blockbuster, the traditional brick and mortar retailer, is extinct.
It was replaced by Netflix (NFLX) which streams right to your television and is extremely cost effective.
Kodak filed for bankruptcy.
Radio Shack is on it’s way out the door.
Gamestop (GME) continues to trend toward 52 week lows.
Facebook (FB) is near highs.
Twitter (TWTR) just surged.
Apple (AAPL) on the heels of Apple Pay continues to reach new heights.
AAPL is actually a great example. For now, you can actually buy AAPL products cheaper through Best Buy BBY cheaper than AAPL. Despite that fact, AAPL stock has surged while BBY has taken a hit. Why? Because AAPL is more accessible online.
Retailers like Abercrombie & Fitch (ANF) trend to their lows as the click and shop takes hold.
So where will the market be at the end of 2015?
I don’t know but I can see what’s trending hot and what’s trending cold.
Being prepared will allow me to react quickly and make 2015 a productive trading year.