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My Predictions and Trends for 2011

By Marty Nemko

Predictions are most valid when not attempting to dazzle. My approach to prediction is merely to identify trends that have accelerated through 2010 and, if signs point to continued acceleration, I ask myself, "What are the career, business, and investment implications?"

TREND: Leftward Ho. Here I do predict the reversal of a trend. I believe the 2010 Republican win is an anomaly, the result of anger about the forced-through massively complicated health care bill and mammoth increases in government spending, The latter, contrary to the Administration's promises, has yielded an increase rather than decrease in unemployment and an unprecedented and dangerous amount of federal debt.

That said, there are larger forces that will accelerate the leftward trend in U.S. politics that enabled Barack Obama to win in 2008:

  • The media grows more brazen in its conversion from reporter to advocate. Conspicuous but far from the only examples are the New York Times, CNN, MSNBC led by Rachel Maddow, Keith Olbermann, and Chris Matthews, and the liberal bias of entertainment from The View to The Colbert Report to The Daily Show.
  • Because Republicans are older and more tech-resistant, they will be less reachable than Democrats by the ever more potent electronic media (Facebook, Twitter, and even email.)
Career opportunities
  • Career opportunities will increase in Democrat-favored spending areas: alternative energy, mass transit, immigrant services, publicly provided health care, and tax enforcement (IRS.)
  • Despite Tea Party pressures, the federal government will remain very large and continue to offer some of the best-paying, best-benefited, and most stable jobs.
  • While the Dems are down, consider volunteering for your favorite Democrat politician. When things improve for the Dems, as I believe they will, that politician will remember that you were there during the tough times.
TREND: All social media but Facebook and LinkedIn fade. Services such as MySpace, Plaxo, and Digg will wither. What will mainly count are LinkedIn for business and Facebook for social.

Career opportunities: Focus your advertising efforts per the above. Work for Facebook or LinkedIn.

TREND: Nuclear, ahem, booms. Bill Gates's new company TerraPower is planning to invest in Toshiba's breakthrough nuclear reactor, that will operate for 100 years with zero emissions, with no need for refueling. That and related technologies will mitigate an, ahem, core objection to nuclear.

To date, in the U.S., special interest groups have successfully lobbied government to impose a regulatory process that has required two decades(!) to go from proposal to a plant going online. That has motivated most nuclear power plant builders to go overseas. For example, France already gets 80% of its energy from nuclear. China has 13 nuclear power reactors in operation, 25 under construction, and more about to start construction soon.

But I believe that, because Dr. Steven Chu, President Obama's energy secretary has recently stated that nuclear needs to be a part of the U.S's energy strategy, increased pressures for energy independence, the likelihood of cap and trade-type legislation, and the forthcoming much-improved nuclear power plants such as Toshiba's, the U.S. will start building more plants.

Career opportunities
  • Consider nuclear engineering. For more than a generation now, special interest groups have convinced the U.S. media to present an anti-nuclear message. So, for example, Three Mile Island, in which not one person died, has left the general public with the impression that the Three Mile Island "disaster" was almost as bad as Chernobyl. As a result, there are very few young nuclear engineers. The average age of a nuclear engineer is 58! So I believe that a degree in nuclear engineering may be among the most valuable. I also predict that the U.S. will start to streamline its regulatory process so that nuclear engineers will be able to find work without leaving the country.
  • Technical and non-technical workers, from accountants to human resource people, might seek employment in the larger companies in the advanced nuclear energy industry.
  • I have invested in the Market Vectors Nuclear Energy Fund.
TREND: Electric Vehicles Short-Out, Yet Again. Electric vehicles' carbon footprint is only minimally smaller than conventional cars' .As long as the electricity comes mainly from the dirty coal and natural gas, and the price of EV's is high (like GM's Chevy Volt: $40,000+ for a subcompact? in THIS economy?!) sales will be subcompact.
TREND: Online shopping accelerates. Easy-to-use shopping interfaces, especially at one-stop-shop Amazon, enables even late adopters to prefer to shop online than to brave the traffic, parking problems, and out-of-stock products. Causing additional bleeding to bricks-and-mortar stores: smartphone barcode apps such asRedLaser:Now, shoppers can scan an item's barcode in a store and, with a few clicks, read the reviews and buy the right model online much cheaper (enhanced further by the proliferation of mobile-only coupons,) delivered to their door. (UPDATE: I wrote this before the 2010 holiday sales figures were released. Despite the slow economy, online sales were up 18%.)

Career opportunities
  • Work for or invest in Amazon.
  • Become an expert at converting bricks-and-mortar stores to manufacturers' showrooms. Sony and Apple have done this for years but the above factors make the case for manufacturers doing so more compelling. Hang your own shingle or get hired by one of the big consulting firms, e.g., Accenture, McKinsey, BCG, Bain, Booz, Monitor, etc.
TREND: SmartPhones will be the platform. The market for PCs, laptops, and tablets, yes, including the iPad, will not be as big as anticipated. All their features (including Windows 7 and the fast Gingerbread operating system) are available on smartphones. And smartphones will become ever more popular as fold-out screens, ever-better pull-out keyboards, and high-quality voice input become available.

People don't want to spend on nor carry two or three devices--they'll choose the smartphone: an iPhone for the mainstream, especially the visually oriented, an Android for the more techie, text- and speed-focused. (The current best Android phone may be Nexus S but it will no doubt be superseded in 2011).

TREND: Economic precariousness. Economic problems are likely to worsen. That's not a very bold prediction in light of, in 2010, the EU having had to bail out Greece and Ireland and now, Spain is in the wings, with Italy, Portugal, Sweden, and even the UK not that different. And then there's America's recalcitrant economy, in a jobless non-recovery despite $1 to 3 trillion (depend on what you count) in stimulus.

Of course, the economic outlook would worsen further if there were another significant terrorist attack which, per the below, is ever more likely.

Career opportunities
  • Job seekers, businesses, and investors should focus on growing economies: e.g., The Emirates, Saudi Arabia, Brazil, Russia, and Asia including, of course, China, India, and my favorites, the world's two fastest-growing economies: Singapore and Sri Lanka.
There's a natural tendency among even the least jingoistic Americans to confine their job/business/investment sights to the U.S. but it's likely that the Indo-China vs U.S. growth rate as well as the broader Asia vs U.S. growth rate will continue to widen.
  • CPAs and other financial experts might want to acquire expertise in national bailout approaches and implementations. Consulting opportunities should abound.
TREND: Traditional media continues contraction except the NY Times. The Times will like the Wall StreetJournal charge (a "paywall"). Because the Times is a preeminent, albeit liberal-biased medium, people will pay for itbut the Journal will be forced to return to being a freebie.Others are trying or will try a paywall and will fail. Fox News will start its permanent fade.
Career opportunities: The educated public that is socially liberal but believes in small government has no major media outlet to turn to. I believe a driven intrapreneurial person could do worse than to try to convert one of the many liberal-leaning outlets, perhaps giving new life to the fading ABC, NBC, or CBS, Newsweek or U.S. News & World Report.
TREND: Housing prices continue to sink. U.S. housing prices have fallen from their peak of $270,000 in 2006 to $175,000 in Dec. 2010, the lowest since 2002. The U.S. government's attempt to prop up housing prices has not reversed the trend.

That failure plus increased pressure on the Feds to reduce the deficit will mean that government will spend less in 2011 to prop up the housing market. While in the long run that may be wise, in 2011 the result will be more foreclosures, more houses on the market. and, in turn, even lower housing prices. In addition, as the economy remains stagnant, ever fewer people will be able to afford to buy a home, even at lower prices. So I predict an additional 10% to 20% decline in home prices by the end of 2011, with declines greatest in major coastal cities.

A concomitant effect will be a further increase in bank failures. In 2010, there were more U.S. bank failures (157) than from 1993 to 2008 combined. The predicted increased foreclosures will cause the bank-failure rate to accelerate.

Career opportunities
  • Rehab apartment buildings in safe but not tony neighborhoods in locales of relative economic stability: e.g, DC (fed jobs aplenty), Austin TX (excellent cost/quality of life ratio) San Jose (tech hub).
  • When people don't buy homes, they rent. So jobs for apartment managers should increase.
  • MBAs and accountants might want to develop a specialization in bank consolidation.
  • Realtors might specialize in helping banks sell homes they've had to repossess.
TREND: We scale back further. The continued slow economy will force individuals and organizations to continue scaling back.

Career opportunities

  • Cafes. As ever more people are forced to move from homes to noisy apartments and/or have multiple roommates, they will seek respite in cafes. I'm especially bullish on the concept of a town hall meeting cafe: In part of the cafe, every hour, another topic of current interest would be discussed.
  • Shared housing (See above.) Buy apartment buildings with two-, three-, and four-bedroom units.
  • Shared housing coaches. As mentioned, more people will need to live with roommates and more young adults will return to live with their parents when unable to find sustainable employment. I believe that personal coaches and mediators could succeed by specializing in helping cohabitants to get along better.
  • Repairers. Individuals and businesses will more often choose to repair than replace.
TREND: Acceleration of radical Muslim terrorist acts. Islamic radicalization continues to increase. Examples: jihadists taking over Somalia, increased radical Islamification of Europe, There have been 16,586 terror attacks since 9/11. The risk to the U.S. increases as ever more U.S. home-grown terrorists, willing to die for their religion, are being flown to places like Yemen and Somalia to get trained and then return to the U.S to commit terrorist acts. There are too many such planned attacks to stop them all, especially with the ever increasing miniaturization of terrorist weapons--e.g., suitcase nukes and vials of communicable smallpox virus. Experts agree that it's not a matter of if terrorists will succeed in a significant attack on U.S. soil, but when.

Career opportunities: Especially if such an attack occurs, there will be another increase in hiring by the U.S. Office of Homeland Security and related agencies in the U.S. and abroad. It may be a good time to prepare for a counterterrorism career: biological, chemical, radiological, nuclear, or cyber. If you're not a scientist type, an alternative is a master's in emergency management services.

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