Some Thoughts on Others' Predictions for 2011 (And a Few Predictions of My Own)

by: Leigh Drogen

I was going to write a similar post to last year where I cover a whole range of topics including the market, but I got half way through it and stopped for some reason. It didn’t seem right to be talking about the market as I’m not trading. As always, you should never be listening to anyone give predictions regarding the price of any asset more than six months down the road, and even then, that’s stretching it.

Anyhow, I came across this great slide show of 100 Things To Watch In 2011, it’s been posted all over the place, but I thought it would be fun to comment on just my favorites. Many of them are trends that I have already written about here or on the stream, but there are a few that surprised me and it makes sense to comment a bit on those as well. I don’t care to take credit for making predictions on anything, I’m a trader (or was) and make money by actually transacting in the buying and selling of the assets, I could care less if I get the prediction right.

But it’s always fun to try.

1. 3D Printing – The second I see this technology I think of the idea that many great inventions started out as toys. Like the telephone, at first it was relatively useless for anything but a toy, people thought it was stupid because they didn’t realize that with a few tweaks and advancements it would change the world forever. 3D printing feels the same way, it’s a toy right now, useless to most, but the idea is there and the technology is being built. Maybe it takes another 20 years but it’s coming. I don’t think this is the year of the 3D printer, but something to watch.

2. Africa’s Middle Class – No, this is not the year for Africa’s middle class, here’s why. Multinational companies are still widely focused on Asia. Globalization unfortunately does not take place at the same time in all places. The world’s economy is focused right now on Asia and will be for the next few years.

Globalization takes one thing above all else, economic development. Economic development leads to rule of law, which leads to civil stability, which leads to liberalization of politics including democratic values. But many multinational companies are still focused on tapping low wage workers in Asia, and that well has yet to run dry.

As well, infrastructure investment in Asia has been huge over the last 15 years and they are reaping the benefits. Companies need the ability to move goods and people around, you can’t yet do that in Africa. So no, this will not be the year of Africa’s middle class, that is still about 4-6 years away, at least. But here’s the interesting part. When the pool of low wage labor in Asia runs dry, there is going to be an all out blitz on Africa. Already prices for farm land are taking off and multinational companies are buying investments there as a foothold to get a head start. The most interesting thing to me is this: Africa has no infrastructure of any kind, which is in fact an advantage once the blitz begins. Why is China kicking our ass in infrastructure development? Because they have little to no legacy infrastructure! I am going to write a larger post on legacy issues and how they kill countries and companies, but for now, just appreciate the fact that when Africa does go for it, they will be the benefactors of the newest and best technology. Already we have seen that land lines for telephone service don’t exist there. Why? Because it makes more sense to just build a cell phone tower. As well, electricity doesn’t exist in much of Africa. But that hasn’t stopped the people from putting solar power generators on their roofs. What if most of Africa never connects to the grid and just does electricity one by one? That would be amazing, society and planet changing.

3. Bamboo – I love bamboo, in fact this spring I’m going to line the outside of my deck in the city with it. It grows quickly, looks awesome, and is amazingly strong. I like the idea of bamboo as a trend this year.

4. Beer – Already beer is on a tear, just look at the stock prices of Anheuser-Busch Inbev (NYSE:BUD) or Boston Beer (NYSE:SAM). I’m not a huge beer drinker, I like Hogarden, but I just never acquired the taste. Also I don’t like carbonated drinks much, they upset my stomach and I can’t drink or eat as much. But beer is hot and I have friends who are brewing their own in their apartments on the weekends. Yea.

5. Biomimicry – Nature is the creator of all things awesome. Why? Because natural selection is the greatest inventor of all. We can lean so much from nature and its forms, it is often brutally efficient and creative at the same time. This may be a big trend for the year, or at least I hope it is.

6. Brazil as E-Leader – Yes Brazil is on fire, just look at the stock market, price never lies. But more than that, I agree that the Brazilians are easily accepting of technology and are leading the way in the southern hemisphere. Part of the reason is the legacy issue, they don’t have any. Part of it is the Brazilian culture. Twitter is huge there, stock trading is big as a well. This may be the year of Brazil leading up to the Olympics.

7. BuyOne, Give One Away – I love the idea although I have never bought TOMS shoes. I agree, we see many more companies brand themselves like this in 2011.

8. Children’s E-Books – I’m jealous, I want to be a child again. The use of the iPad (NASDAQ:AAPL) for children’s reading is a game changer. They can now interact with the text in all sorts of ways. Parents no longer have to spend a ton of money on a mountain of different kids books they will throw out later. I’m scared that in 25 years the kids of today are going to be so much smarter than us that we will be left in the dust.

9. Decline of the Cash Register – Yup, the cash register is just about dead. I’m not sure it’s this year, it may take another 2-4, but it’s going that way. Just think about how they ring you up at the Apple store.

10. Digital Downtime – See, I want to agree with this prediction, but I think it’s very similar to when everyone screams bubble in the market. Yes we are inhaling a lot of information these days, all the time. But the idea that people will take distinct breaks from technology on a regular basis to get away from it I believe is wrong. Instead, we will find new ways to organize the data and our connection to the world, we will fit the information to our lives, not turn it off. When a problem like too much data overwhelms people they always think that the solution is to turn it off, that the problem will never be fixed. It almost always is, there are solutions coming, Twitter is one of them. So I’m going to turn this prediction on its head, instead of digital downtime, this will be the year of the digital organization and prioritization. Many new tools will be created to help you better handle all that info.

11. Digital Etiquette – Aha, but this one I agree with. I have seen the shift already and the wave is coming. Let’s split people up into three generations. The over 55 year olds (baby boomers) who still hate technology. The 30-55 year olds who have embraced technology to such a great extent that they are overwhelmed by it and have in some cases lost sight of the real world. And the 18-30 year olds who are starting to backlash against it. I’m going to use two examples. First in business, I can’t stand when I’m in a meeting and someone is tapping away at their phone. Just put it the fuck down. It shows complete disrespect for whoever is talking. I won’t let people do it, and I’ve called them out for it, at times to my detriment.

I think the younger generation understands that with all this technology comes the need to have manners. When everyone is disrespectful in this regard, you can be different and better just by showing a little, and it goes a long way. The generation ahead of me still doesn’t get it, they are just buried in it, and I don’t see any hope for them. They didn’t grow up with this technology so its more difficult for them to control it. It was added on top top their existing life, not built into it. And thus it has consumed them. The oldest generation just still refuses to buy into the technology, so they haven’t really been consumed by it.

Second, social situations. The youngest generation is starting to understand that all this information can kill relationships, both friendships and romantic. I’ve seen it happen. From Facebook to Twitter to texting in bed while having sex (yes that shit happens), it’s all too much for a lot of people. The youngest generation has seen the writing on the wall and I think are changing a bit. The second generation as I said is still lost. The oldest never bought in and just think we’re all bat shit crazy. At the end of the day, I see the light at the end of the tunnel, the overload on society is bad but it will get better with tools and understanding that you are being an idiot for walking down the street with your head in your phone until you get run over by a bus.

12. Electronic profiling – Yes this is the year of Minority Report, it’s upon us and will change society forever. And you know what, I’m happy. It comes down to this, I hate advertising, but someone has to pay for the content that we consume, and its the advertisers. So if I’m going to be bombarded with advertisements all day, at least make them interesting and targeted towards me. I’m sick of seeing commercials for tampons and cholesterol medication. If I need to give you my information so that I can see ads for restaurants and hockey equipment, I’m all for that.

13. Entrepreneurial Journalism – We’re already here, just look at what has happened to the publishing industry and its ranks of journalists. I will write much more on this in the coming year. But for now just get this, we have seen a huge shift in the ability for a single publisher to distribute creative and unique content to the whole world at the same time. If you have premium content, you can sell it on your own instead of going to a big publishing house. I have the feeling we will see venture backed pools of individual journalists do some really great investigative writing this year and usher in the destruction of the model in place right now. Thank God.

14. Group Manipulated Pricing – Also already here, but it will be huge this year indeed. Groupon leads the way, but other sites will pop up and you will buy things for less with your friends. This is the natural progression of social meets buying, your friends are the best advertising, and if they are given incentive to see you buy the same thing, whoa, watch out.

15. Ignorance Is Bliss – No, ignorance is not bliss.

16. Micro-Business – We are on the forefront of a major shift in our economy I believe. The natural ingenuity and entrepreneurial spirit of Americans is going to come through and change the economic landscape. I don’t think it really takes place this year, we may need another 2 or 3 years of the middle class hurting before they really get their butts in gear, say enough is enough, and start to take chances. When they do, it will be on small businesses. But instead of opening up brink and mortar shops, they will do it differently this time. A small business can be anything, from selling fruit on the side of the road, to doing lawn work. But now there are tools coming to help people get the word out, to connect small businesses to customers through the interwebs. We saw the start with Angie's List, that was only the beginning. The platform that puts this all together in the same place is going to change the world, and I would be an investor, I’m keeping my eyes peeled for it.

17. Mobile Blogging – Already huge. Twitter, Tumbler, Facebook, it’s huge and will only get bigger.

18. Near Field Communication – Probably the biggest trend of the year and you can already see the beginning by looking at the price of NXP (NASDAQ:NXPI). Your phone will be your wallet, and just about everything else. It will tell a store that you are there and the store will automatically give you a tailored coupon based on what you bought previously. This will happen this year and it will be the buzzword of Wall Street.

19. The New Mobility Industry – I love ZipCar (ZIP) and I believe firms like them are about to take over the world of transportation. Any company that can take an industry which is wasting resources and share those resources will be huge. We don’t all need cars, they sit around for days on end, especially when you live in the city. Traditional car rental is stupid, people don’t use cars for 3 straight days, they use them for 8 hours to go to their parent’s house an hour away. I’m keeping a lookout for other industries that can have their resources shared instead of owned, there are many.

20. Odyssey Trackers – I talked about this yesterday and I think this is the year it takes off. When I go on vacation and I have cell or internet service I am going to share my trip with the world, because it will be that much better that way. And when I get home, I want to see all the content I shared during my trip in a neat package with geo-location. For example, it would have been really awesome to have a web site which took all of my sharing during my trip to South East Asia a few years ago and put it neatly on a map/timeline. That way I could have a saved record of all my pictures, videos, audio, and writing from each place and see it all in front of me. Oh and by the way, this will change guidebooks forever. A new wave of tourism journalism (is that a word?) will crop up. Also, a new wave of private tourism. Think about someone who has traveled to so many great places and seen so many great things and has them all organized and shared in one place. You would think that someone would hire that person to share their adventure with them next time.

21. Older Workforce – Yup, everyone is getting older in the US. Change the immigration policy or we are just as screwed as Japan.

22. Personal Taste Graphs – I still don’t get Hunch. Maybe because it’s still a toy, one day it may be big, but right now it doesn’t work well. I don’t think this is the year for Hunch.

23. Smartphone Cameras Take Over – The point and shoot camera is dead, in fact, if you can find a camera company that only makes those cameras or has a large percentage of their sales in that line, short it. The smart phone camera will replace them this year. Would you buy a 10 megapixel point and shoot when you have a 5 megapixel smartphone camera already?

24. Smoking on the Fringe – Thank god, about damn time. I think this may be the year that smoking gets crushed, for two reasons. States need revenue, so taxes on cigarettes are gonna go up. And second, new laws are being put in place to ban smoking in public areas. I hope these people quit before they are broke and ashamed.

25. Space Travel Goes Private – Seems that every year is the year of private space travel and it never happens. Me thinks it takes another 4-6 years.

26. Virtual Mirrors – In theory this is an awesome idea but I haven’t actually seen one yet. And my big question is, how does the mirror know what the clothing will look like on your body type, how the clothes will fit and fall on your frame? This needs more research, but it’s a really cool idea and could revolutionize the way we shop. Think about not ever going to the store because you could have a virtual mirror in your home connected to Amazon (NASDAQ:AMZN). If you think brick and mortar is already in decline, this might put it six feet under. My bet is that big adoption is 2-3 years away.

27. Voice Activated Apps – No, voice just isn’t that big. Why? Because it’s god damn annoying to hear people talking into their phone all the time and we don’t want to share our personal business with the world.

Ok fine here are a few other predictions quickly:

  • Rare earth metals are a big deal and their stocks will go higher, much higher. No fundamentals you say? Bahhh, who gives a crap. Trade the trend until it ends.
  • Housing and financials will continue to under-perform, and probably will for the next 3-5 years, or until we have a huge new wave of immigration.
  • Foursquare gets bought.
  • Barnes & Noble (NYSE:BKS) trades under $10.
  • Gamestop (NYSE:GME) trades under $15.

That’s all I got for now.