4. Ascending Autos
The fourth rising tide? Autos. This group has been tough, because we've been in an American-related renaissance as auto production in the Great Recession has dropped almost 40%. We just can't talk enough about that decline in build, as well, which is almost as shattering as the plunge in housing starts. We just didn't see it in the stocks because the major players, Ford (F) and General Motors (GM), are huge international companies and they were being pulled back by Europe and even China.
In 2013, China stands to be a tailwind and Europe will be cordoned. That means Ford and GM are going to be huge stocks.
They should be terrific -- particularly Ford, which keeps refinancing and refinancing, and just refinanced a gigantic piece of paper last week. No one even notices anymore. They should. They will when the company reports. Meanwhile, GM has bought a big piece of the U.S. government's stake, which is going to set up this stock for a terrific 2013. I would buy both.The ancillary auto plays make sense here, too -- like Goodyear (GT), Cooper Tire (CTB) and CarMax (KMX). These shares all rise with auto builds, which I think could be up to 16 million this year. The consolidation in rental cars, coupled with destruction from Superstorm Sandy, will mean that Hertz (HTZ) and Avis Budget (CAR) should go still higher as a huge wave of consolidation sweeps over the group.