Update on Investment Themes for 2011

by: Mobile Guru

In January, I put together a list of key investment themes for 2011. In today’s investing world, the pace of change is only accelerating and it’s important to revisit and reevaluate investing ideas to determine if anything has changed. With that in mind, I thought I would go back and see if my thoughts from two months ago were still on track and in addition add any insights gained over last two months.

1. Oil will hit $125/barrel and we will be paying $4.00/gallon for gas this summer. I am going to raise that to roughly $137/barrel and it will go much higher if any of the current exporters stop producing for any length of time. We may very well go over $4.00/gallon, but at some point cost will damper demand as people stop driving everywhere.

2. Hybrids are still 3-5 years away from becoming 20% of the cars sold each year. In the United States this year only 20,000 out of the 13 million cars sold will be electric. Given the resources required to make the batteries, I am thinking a 5% target in 3-5 years might be closer to reality.

3. Gold rose for the 10th year in a row with a stunning 30% increase. James Turk, an expert on the metal, recently said that "the gold and silver shorts are losing control" he expects gold and silver to blast off higher in 2011. Looks to me like gold is getting ready to move on up and with all the geopolitical situations around the globe, that probably shouldn’t be a huge surprise to anyone. I am going to add that the dollar looks ripe for a major move down.

(Click to enlarge)

4. Silver scored an incredible 83% increase in 2010, and many experts are saying that $40 silver is in the bag for 2011. Silver is on fire and I would not want to get in front of this bull run. I will add that we may see record highs on Silver this year. Yes maybe $50/oz.

5. Rare Earth Metal stocks enjoyed a terrific year thus far and with tremendous media coverage of China’s total domination of this volatile market. The demand for these metals is going to likely outpace supply for at least the next decade.

6. Surprise material of the year will be graphite. To the graphite list I am going to add two other materials that will dominate. The first is lithium, which I have written about before and the other is manganese. These three in combination will become the next battery source with more power density than what exists today. There will be spectacular returns made if invested in the right junior mining companies. The key being to pick companies that have experienced management, well financed and have proven reserves.

7. The hottest commodity for 2011: sugar. I am going to extend this to all food and beverage commodities, which of course means much higher food prices going forward. To me this is a strong signal that inflation is going to become a word we hear a lot more about in the coming months.

8. 4G service will change the way we live and is slowly starting to roll out while in another year or so we will start discussing 5G. The rate of technology change is only increasing. How often have you seen Apple (NASDAQ:AAPL) launch a new product such as an iPad II and have an iPad III ready to go in another six months. Original iPad launched 11 months ago, iPad II launched this month, iPad III in six months?

9. Smartphone’s, tablets and other tablet like devices will get so plentiful that if you don’t have one in your hand while out and about, people will stare at you. Over 100M smartphones will be sold in the U.S. in 2011. Expect well over 50% of people will use a smartphone by the end of 2011. 2012 is now just 10 months away. Morgan Stanley Research estimates sales of smartphones will exceed those of PCs in 2012.

10. Near Field Communication or NFC will become a household concept. This is coming and still expect the use of this technology may be widespread by end 2011. The biggest issue will be security concerns as more and more people utilize this technology for mobile payments.

11. My final prediction for 2011 has to do with mobile. Take items 8, 9 and 10 above and throw in the continued blurring of what we currently call mobile and the concept of online, and I think by next Christmas it may not even be called mobile any longer. Although mobile is still in its infancy, it is going to become the interface of choice for the Internet. I have used the term virtual Internet before, but a better definition might be augmented Internet.

As was the case with the PC revolution of the 80′s and the subsequent internet boom of the 90′s, these technical revolutions often see a period of heightened mergers and acquisition activity where large players attempt to establish a foothold in the space through the acquisition of smaller early leaders. I expect the mobile revolution of 2011 will be no different. For more insight into a few companies I think could be sought after targets, please see my previous article, Top 4 Mobile Acquisition Picks.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.