Leading Market Trends for 2010

For today's guest blog post, I've invited Amey S. from The Wild Investor to share some things to look for in the markets for 2010. Please share your thoughts for 2010 by commenting on this post.


If you have followed any of my work, then I’m sure you’re well aware of the simplicity I try to put towards stock trading - especially when it comes to spotting trends. In theory, I like to think of trends as a cause-effect relationship.

Due to situation A, sector B should perform well. Then, go find solid companies in sector B that fall under your trading strategy.

As we inch closer to shutting the door on a relatively successful 2009, yet miserable decade in the stock market, we must now focus our attention on the New Year. The upcoming year will not only mark the start of a new decade, but it will also jumpstart the “new” market, a “new” way of doing business, and the “new” way consumers behave. Basically 2010 should be everything that the first decade of the new millennium wasn't.

2010 will be the year of the stock picker. In 2008 we saw the crash and in 2009 we saw recovery. Now we will see which companies really mean business. Let's be honest for a second… the market tanked so bad in 2008 that, with a little bit of patience, you could have picked a stock out of a hat and still come out on top in 2009. That won’t be the case in 2010. Only companies that have positioned themselves to grow over the next couple of years will flourish. We’re focused on long-term now, and not who can scrape up enough cash to stay alive for another week.

Unemployment will ultimately drive the markets in 2010. If consumers are unemployed, they have no money. If consumers have no money, they can’t consume. If there are no consumers consuming, then businesses will have trouble unloading inventory. If businesses can’t unload inventory, they will have to order less inventory. If businesses have to order less inventory, manufacturers will have less work. If manufactures have less work, they won’t have enough money to stay afloat. Get it?

The chain could obviously go on forever and in many different ways, but overall the economy (and markets) won’t see any significant gains until unemployment can come down at least 2 – 3%.

Unemployment will drive growth in steel, coal, and labor sectors. Somehow the government will have to find ways to create jobs. Originally Obama’s plan called for large infrastructure projects to help create more jobs. Eventually this will happen, and when it does this should help spark such sectors like steel and coal.

Innovation in technology will lead the way. If you look at the history following any type of recession or bubble-crash, you’ll notice that some of the best businesses or practices have originated during this time. In this age, innovation will usually come in the form of technology. Could this be the year of Google, with the rumored “unlocked” phone that can be used on any carrier or the creation of its online operating system?

We’ll remember 2009 as the transition period, a time with emphasis on the short-term and just staying alive. 2010 should shed some light on the future and where we can expect to move from here, but nobody said it would be easy.

What are some trends you will be looking at in 2010?

Wishing you all the best in 2010,

The Wild Investor

29 thoughts on “Leading Market Trends for 2010

  1. 2010 will be the year of 'enlightenment' . . . that the US, at best, will have a standard of living that will go sideways. With the current level of unemployment, those obtaining a job will not be on the track of prosperity but on a track that will be able to survive with the basic, excess amenities of western society while the upper band wage earners will be disproportionately taxed . . . It will be the emerging global economies that will take center stage while the US wonders how we got into our current status of muddling through . . . not fully understanding what the US Constitution means, not having a good handle of understanding economics and not having the ability to communicate our frustrations in an effective manner. . . In short, trying times lie ahead for many years to come. And, only the passage of time will prove the actual outcome.

  2. A lot of you individuals are such typical, middle-class, politically obsessed fanatics that see either an elephant or a donkey in every single thing you discuss.

    Jim Hobson, you are the "poster-child" for an arrogant, ethnocentric, red-blooded American. I can also flaunt that I have "traveled to every major country you can think of," and yes, America is still the envy of the world, except it has nothing to do with the reasons you think it does. They envy our vile "pop-culture". One of the earliest and easiest ways for me to spell this out for you is with this example.....
    Not long after we dropped *two* A-Bombs on Japan we stationed a bunch of our troops over there as we like to do in any country that will let us. So, for a second, imagine being a Japanese citizen after 1945. What would your opinion of Americans be like? My point, a couple of years after those US troops I mentioned above were stationed there, the Japanese started developing an intense interest in "our" baseball. And if you actually KNOW anything about "every major country you can think of" you know that baseball is one of the largest sports over in Japan (and there's also golf of course).

    So yes. Unfortunately there are A LOT of countries following and emulating every nuance of our "pop culture". Do we have any other culture in America anyway? As far as SERIOUS matters go, I don't know if I would use the word "disrespected" but we certainly are disliked by *many* countries. Not just the evil "Socialistic" ones, but also just about every country that's in Continental Europe. For good reason too! You see, most of those countries strive for peace and disarmament.... you know, the things that you say are "leading us into one of the most dangerous periods of history". Get real man. Like another guy here said, you sound like you were raised by a drill Sargent, to paraphrase. It's EXACTLY because of people LIKE YOU (the ethnocentric folk that are unable to even speak of other countries and THEIR customs coherently) that people "disrespect" America. It's not the 1950's anymore. Wake up. Besides, I came to this blog to read about market trends, not your ethnocentric "America rules, everyone else sucks" mentality. Shouldn't you be reading this month's issue of The NRA anyway?

  3. Jim Hobson

    Here is a view with a wide strategic perspective which I hope contributes to the discussion.


    Where to go is important, too important to allow name-calling and backsliding into petty vendettas with neighbours and allies. 'Blue-skies' discussion and collective co-operation gets one far further than divisive tactics and suicidal actions.

    Happy new year and future!

  4. Well I am not a stock player but i deal in commodities. I first three quarters will see a lot of firework in cotton trade.

  5. What I want to know is what is going to happen to the economy if one debtor nation defaults, or even one state like California? Or what will happen if the Euro crashes? I lost big in gold stocks this past few weeks. How would one of the above affect the commodities?

  6. I would like to thank Jim Hobson for his comment above. Yes this world is more dangerous now than ever before. I am not so sure that this administration has recognized this as you so state however. We can only hope that they do so in time. They are much more concerned with ramming this health care reform disaster down our throats. This will be the biggest boondoggle in the history of the United States. The markets have been propped up to keep people calm until this crap can be passed. As soon as it passes watch what begins to happen. Hold on to your wallets folks. You will see the biggest redistribution of wealth from people who have worked, planned, and saved, to the trash of the U.S. that have fiddled their lives away, wasted all chances to learn in school and are to sorry to work.

  7. To be safe I will continue to invest only where governments are spending, namely green energy, education, and infrastructure.

  8. Here are my thoughts on employment. Yes a critical factor in the recovery. Companies will hire after in the new year due to corporate budget cycle. Revenue improving (demand), over-firing...they'll hire. It will run as a self fullfilling prophecy for several years.

  9. For personal reasons health reasons I am unable to subscribe to the Market Club

    My apologies

    David Rabbin

  10. who will buy new debt in the face of (surely) rising interest rates and the threat (?) of debt forgiveness? answer - nobody in their right mind! what looms ahead is lots of continuing uncertantly (thanks you *** democrats) and a big correction. gold, udn, and contra etf's i think are the play for the forseable future. happy holidays! hank

  11. Thank you for your article. I am not going to try to predict what will happen in 2010 but rather watch as it unfolds and trade accordingly. There were some great trends to get on board in 2009 if you paid attention to what was driving the markets and the different correlations. 2010 will be no different in regards to trading in my book. Merry Christmas everyone. Thanks Adam for all you do here, much appreciated.


  12. The simplest and most cost-effective way to pay down rapidly the colossal American debt is to cut the $850 annual budget of the Pentagon.

    Not only will this help with paying for health care reform, but it will dramatically improve the very sick image of the U.S. worldwide.

    1. Lest you forget the majority of the Pentagon budget goes directly into the consumers hands to keep the USA economy going. If we can find a way to cut the 20% of excess corporate profits that goes into the fat cats pockets to be invested in emerging markets; then we have a savings for the USA.

    2. As a retired officer that commanded JSOC units and the father of an Army Ranger you have no clue what is going on in the world.

      We are entering a period in history that may be the most dangerous we have ever faced.The military cuts that this administration has tried and is now recognizing it's folly puts us at a greater danger.

      Further your view that we are disrespected in the world is a politicised view that is untrue has no basis. ihave traveled in every major country you can think of and when you deal with other than socialistic politicians we are still the envy of the world no matter what the current administration is trying to undue.

      Further you are ignorant of the phrase health care reform.

      1. All due respect to you and your sons service to this country. But while I will agree that there certainly are dangers in the world, I don't believe the percentage of the overall budget going to the milatary is without tremendous waste and often used to support an archaic approach to defense. While you may have traveled the world, it apperently was in a select circle of military and political philosophy that narrows the view very black or white. Also, your reference to solialistic politicians, who view the world more grey, implies that their perspective is somehow dirty or something to be feared. When the capitalistic, socialistic and free market believers find a way to come together, military budgets will be cut tremendously throughout the world.

  13. Dave J
    Would be grateful for any particular D Birch reference which explicated growth formation. Thanks
    Paul C Sandison

    1. Paul:

      David Birch began his career as a Ph.D. microbiologist at MIT, not as an economist. He had been confounded by the questions of how job formation could be systematically impelled in the United States economy. He had observed that job growth did not occur in the Fortune 500 during the 1970's as expected (as is equally true now), and wanted to know where it was actually happening. He applied his scientific methods to study the entire U.S. economy, and in 1979 demonstrated that job growth was caused primarily by entrepreneurs introducing new technology to growth markets. He had a firm called Cognetics and was director of a not-for-profit program at MIT called Neighborhood and Regional Growth.

      I first discovered David Birch in an article in Inc. Magazine in 1984. I do not believe he wrote any books, but I corresponded with him and read his papers because I had been involved in economic development here in the Rocky Mountain Region after the oil bust of 1982. I lost touch with him since then, but I expect that his premises are as valid today as they had been thirty years ago. We certainly do need his or someone's effective job-formation measures now more than ever. I believe the most difficult task now would be to find the kinds of growth markets that Birch described in his economic model, which is a rigorously detailed input/output analysis of American economics.

      You can kick-start your research at the following sites:





      Best wishes.

  14. First, a sever market correction in the first part of the year.


    Gold, Silver & PM group - Up
    Long Term Interest Rate - Up
    Commodities - Up
    Real Estate - Down
    Dollar - Down

  15. The first decade has not yet ended. Decades end in a zero, not in a nine. On our present calendar the first decade of this century and millennium will end at midnight on December 31, 2010. However, correcting for the four-year error in our calendar, the first decade ended on Dec. 31, 2006.

    1. I had this discussion with my family the other day. At first I thought the decade would end December 31, 2010. Then Y2K was brought up. This was Dec. 31, 1999.

      I would have to agree we are at the end of the decade Dec. 31, 2009.

      Thanks in advance for your comments.


      1. Yeah, I have heard a lot of differing opinions of when decade ends, but considering many of the major media outlets are doing best of decade votes and stuff like that, I am just going with them that decade ends Dec. 31, 2009

      2. Sorry, Jim. There was no year zero. The first year in our present calendar was AD 1. The ninth year was AD 9. The tenth year - ending the first decade - was AD 10. Y2K claims also are in error.

        1. A lot of people never learned to count. The last year of the decade is 2010. 1,2,3,4,5,6,7,8,9,TEN. The meaning of 10 is "one unit of ten". Next comes 1 teen (eleven), two teen, three teen, the more familiar fourteen and so on. 20 is two units of ten. We are using base 10 folks. If it were base two as used in computers, 10 would mean, one unit of 2. A 64 bit computer uses base 64 to make calculations. In that case 10 means 1 unit of 64.

          1960 was the last year of the 50s (6 units of ten). The year 2000 is 200 units of TEN. The year 2010 is 201 units of TEN.

  16. Ah, yes. Technology will lead the way, according to sensible business economics. Unfortunately for the time being, those same brainstem CEO's, CFO's, armies of accountants and CIO's who became corporate heroes by offshoring millions of American jobs to manufacturers in Asia during the first two decades of globalization, will continue to reject long-term capital investment in new technology except insofar as it benefits their billion-dollar bonuses and more offshoring. Until we are able to return manufacturing jobs to America with a broadly based forgiveness of both public and private debt and evaluation of the dollar, those jobs won't be returning anytime soon. Expect more pain. The only way to accomplish the new technology adoption that will compensate for the enormous burden of debt will be a radical energy revolution and rejection of petro-carbon-based energy generation. We need a new, 100-year vision of free enterprise in micro-economics, not just more tinkering with multi-national, monetarist, globalized corporate capitalism. David Birch at MIT proved thirty years ago that job formation occurs when entrepreneurs bring new technology to growing markets. However, energy economics are strained now and we are overwhelmed by debt. If we do not, or cannot just forgive the existing debt and start over, we must first undertake a new energy revolution as radical in its historical effect as James Watt's steam engine in the early 19th century. Anything less is mere rearranging the deck chairs on the Titanic. I am not optimistic. There are too many fat cat CEO's who are lavishly rewarded by globalization's corrupt monetarists for their failures, and they care not one nit for those of us who still need dignified employment.

    1. That essay was the best thing I have read all year.If you blog I would really like to know how to read more.A lot of people seem to think we can return to our wonderful consumer economy-buying cheap crap from China with credit cards.I think that will be a little harder,now that card companies have thoughtfully raised rates to 20%.Free trade between equals is fine.Free trade with nations that pay a few dollars a day with no benefits is pure idiocy.This benefited only the few thousands of American CEO's who don't know how many houses they own,and screwed the entire American middle class.Dave J. is right.Only bold moves to reverse this disaster can save this situation.I sure wish we had some guys like FDR,George Marshall,and Harry Truman around.

  17. What was hot in 2009 will most likely reverse in 2010

    All the money going into bond funds will most likely be reversed once bond investors realize the trillions of dollars the Fed created is going to drive rates UP.

    Look for a big decline in 10 year bond prices with a rise in yield.

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