12 Big Surprises for 2005

On to 2005

The great atomic physicist Niels Bohr is reputed to have said, "Prediction is very difficult, especially of the future." He was Danish, so maybe something got lost in translation there. Nevertheless, on that note, we move on to my surprises of 2005:

• Sirius Satellite Radio SIRI does another secondary offering to raise $250 million and offers the bulk of it to outgoing Secretary of Defense Donald Rumsfeld for a seven-year broadcasting deal. In a press release, Sirius management says it believes the devotion of Rummy's global audience will translate into millions of subscriptions. Sirius stock soars on the news.
• Apple Computer AAPL releases two new handheld devices in an attempt to follow up its iPod mega-hit, but they fail to gain traction. iPods begin stacking up at electronics stores when it is discovered that, after a Christmas buying frenzy, there are now 2.7 iPods for every American over the age of 6. Apple turns to Philips Electronics PHG for a bailout and is sold to the Netherlands-based consumer electronics giant for $80 a share.
• For the per-barrel price of crude oil, $40 is the new $25, as energy demands from emerging markets and constrained supply put a new floor on the commodity. Although economic growth is sluggish during the year, various supply scares push the price to spikes as high as $75. Small energy producers such as Goodrich Petroleum GDP and Harvest Natural Resources HNR continue to run.
• China manages to effectively clamp down on industrial production, pushing its annualized growth rate below 7%. This chokehold on the construction of power plants and industrial facilities stymies the advance of basic building materials, such as steel. Yet China's multiyear drought continues to constrict its ability to grow food, and commodities such as fertilizer and soybeans continue to rise on world markets as farmers in Brazil, Argentina and the U.S. work overtime to take up the slack. Ammonia producer Terra Industries TRA soars past its all-time high of $15, set in 1996, by midyear. Potash Corp. of Saskatchewan POT, which set its own all-time high in mid-2004, climbs another 50% by midyear and announces a 3-for-1 stock split. Mosaic MOS, the combination of the old IMC Global and Cargill Fertilizer, doubles by the end of the year. Monsanto MON, which quadrupled from its 2003 low through the end of 2004, rises another 60% in 2005.