Investment Directions: Electronics Gets Interesting, Humans Take On Computers, Banks' And Wall Street's Happy New Year

Jan 6 2014, 1:50pm CST | by

Investment Directions: Electronics Gets Interesting, Humans Take On Computers, Banks' And Wall Street's Happy New Year
Photo Credit: Forbes Apple

This week’s meaningful topics and trends:

Electronics Gets Interesting

This CES (Consumer Electronics Show) looks to kill the view of its supposed waning importance after Apple and Microsoft opted out. Today’s micro-sized, maxi-speed and minimized-cost tech, wedded to the hyper-speed wireless and limitless-capability Internet, has opened the floodgates. Developments are pushing the consumer electronics trend out of its computer-tablet-phone channel.

In what now looks like intelligent timing, the Detroit Auto Show follows the CES, just as the major car companies man CES booths.

Humans Take On Computers

In 2013, the NYSE broke a 19-year record and got more tech + IPO listings than the Nasdaq. A fallout from the Facebook fiasco? According to a WSJ survey of investors and newly listed company managers, the primary reason is humans – the “designated market makers” (nee “specialists”) who have the ability to override the computers, ensuring an orderly market for NYSE-listed stocks.

Meanwhile, Eugene Fama and DFA (Dimensional Fund Advisors) are featured on Barron’s cover under the heading, “Market Beaters.” Seems like the time is ripe for the pendulum to begin its periodic swing back from index funds and ETFs to managed funds and closed-end funds.

Banking and Wall Street’s Happy New Year

2013: The year that the Fed finally let long-term rates loose, banks settled most of their hangover lawsuits, and Wall Street proved that IPOs are good for investors’ health.

With this normality returned, we can look for banks to ramp up lending, including mortgages. The high interest rate margins are a powerful incentive to get banks’ lending and earnings growing.

Meanwhile, the Wall Street machinery is in high gear, bolstered by 2013’s success and those multi-digit bonuses. With cash in ample supply and many companies sporting high P/Es, we can expect more IPOs along with acquisitions, divestitures and other fun stuff.

And then there’s bond trading. This anathema to many investors and non-money maker last year could shine. With the Fed out of the picture, the traders can do what they do best – outsmart one another. All they need is volatility. Judging by the diverse opinions about what’s in store for interest rates, they will get their wish.

Final Thought

“Growth” is the operative word for 2014 – economic, business, financial, consumer, R&D, and, most importantly, confidence and optimism.

Source: Forbes Apple

 
 
 

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