This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Next Big Thing?

This commentary originally appeared on Real Money Pro on Oct. 25 at 8:34 a.m. EDT.

What might be the next big thing the marketplace?

I would offer four possibilities -- two themes relate to the possible resolution of the world's resource needs (in particular energy/water) and housing problems, one stands in front of a dominant theme (the social makeover in communications and networking), and the last is a macro play representing a mean-regression in one of the most overvalued asset classes (U.S. bonds).

  1. Resources (energy and water): The world is moving east. Rising demand, stemming from the continued industrialization in the developing world and the emergence of a middle class, places pressure on the supply of all resources. Besides energy (where there are plenty of candidates), I would look at the water sector -- PowerShares Water Resources Portfolio (PHO) and Guggenheim S&P Global Water Index ETF (CGW) are two ETFs that can give investors representation in an emerging imbalance between demand and supply for this important resource.
  2. Housing: The companies that stand best-positioned to find the solution to the massive overhang and shadow inventory of unsold homes will prosper mightily -- that is, those that maintain, remediate and bring to market for sale foreclosed properties. Anti-housing plays are in a growth area, with a long runway that will only get better in the years ahead. The only company I have been able to identify thus far is Altisource Portfolio Solutions (ASPS - Get Report). As can you see from the chart, Altisource has been among the best-performing stocks extant.

    I originally mentioned this company in a Barron's interview at $13 a share; it's now at $37 a share. Because of the company's relationship with Ocwen Financial (OCN - Get Report) -- it was spun out of Ocwen -- Altisource is uniquely positioned and has an insurmountable market lead against others that want to enter the field, as Ocwen has been on an acquisition binge. After the close on Monday, Ocwen announced its acquisition of Morgan Stanley's (MS - Get Report) mortgage servicer, Saxon ($26.8 billion in assets).
  3. Social communications/networking: There will likely be a new company, similar to Facebook, or a company that sells unique devices, similar to Apple (AAPL - Get Report), that changes the world. I have no clue what company it might be, nor does anyone else right now.
  4. Shorting U.S. bonds: The U.S. economy will ultimately come out of the current doldrums, and when it does, considering the latent demand that could be unleashed in durable and nondurable areas and for general spending, interest rates will spike -- maybe hard.

Doug Kass writes daily for Real Money Pro , a premium service from TheStreet. For a free trial to Real Money Pro and exclusive access to Mr. Kass's daily trades and market commentary, please click here.

At the time of publication, Kass and/or his funds had no positions in any stocks mentioned, although holdings can change at any time.

Doug Kass is the president of Seabreeze Partners Management Inc. Under no circumstances does this information represent a recommendation to buy, sell or hold any security.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
CGW $28.35 0.57%
PHO $24.91 0.04%
AAPL $124.25 -0.14%
ASPS $13.29 3.30%
OCN $8.19 -0.73%


DOW 17,698.18 -77.94 -0.44%
S&P 500 2,059.69 -8.20 -0.40%
NASDAQ 4,880.2280 -20.6570 -0.42%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs