2008 predictions

I can’t remember my 2007 predictions other than goog passing 500 which now seems obvious. Since I’m sitting on a plane ab to take off for sf ill just jump into 08.

* dollar continues decline, especially vs the yuan which the chinese let appreciate much faster than 07’s 6 pct. The fed may be tempted to raise rates for inflation but won’t because of the weak economy.

* housing/mortgage decline becomes crisis. Most experts say we haven’t seen the worst of subprime fallout yet.

* economy is resilient. This is the biggest point in greenspan’s book, that our economy has become so diverse that many drivers now keep it going strong.

* net becomes the biggest us export. In 08 we will finally acknowledge that the biggest sustainable future us industry is…the internet. Shocker!

* the app economy drives the third coming of the net. The first web economy was online which massively reduced customer acq costs allowing a raft of new branded consumer services. The second was the search economy which again dropped the cost and friction of user adoption through SEO and SEM. This enabled massive expansion in the breadth and depth of net businesses by providing cheap traffic and easy revenue for any new service. The third wave will be driven by another massive drop in friction and marketing costs as new services are launched as viral applications that can spread from users directly to each other. These will reside on social networks and portals from facebook and myspace to yahoo, msn and aol.

* private investments. any decent idea around applications going for major categories.

* stocks. Stick with direct bets on oil and energy staying high. Oil remains the perfect hedge against falling dollar, inflation, political and natural disasters while also benefitting from worldwide economic expansion. In 08 oil companies will finally be seen as growth stocks. My favorites, transocean (RIG) and global santafe (GSF) merged, and despite their big climb (70-80 pct) remain a great 4 year call option on oil.

* yuan plays. I’m looking for any way to bet on yuan appreciation that offers a current yield to avoid speculative bubbles. I’d like to find hk or chinese REITs.

* US REITs. apartment and commercial REITs could also be a great way to play dollar inflation as they owe fixed amounts borrowed at low rates but will ultimately charge escalating rents.

* the clintons take the whitehouse. Obama may get the VP slot though the dems may fear teaming a woman and mixed race candidate. I have no idea who will be on the republican ticket but doubt it will matter much. All their candidates seem like last gasps from the 1900’s, where most of us wish bush would have remained.

* the bay area dominates the new consumer net app economy. The combination of unprecedanted vc money, a rapidly growing pool of seasoned netpreneurs (google) and easy user adoption on open social nets drives an explosion in new consumer services.
Sent wirelessly via BlackBerry from T-Mobile.

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