The book's pretty much tightly under wraps. I don't even have a copy in hand. But I want to give you the first preview of one of the most important sections, the top themes for 2014 and beyond, and the best stocks to play them with, including ones I do expect to have difficulty in staying independent when the D.C. bear romps on Wall Street and takes all stocks down.
The New Holy Trinity of Tech
The first theme is the need to embrace the new Holy Trinity of tech: social, mobile and the cloud. Right now, only a few companies actually see the vision of what's happening in tech. You need to have recognition that the old way of doing things, the client-server way, which excludes the on-the-go-tablet-toting-smartphone-utilizing individual, both at home and at the enterprise, is now a thing of the past. You need a strategy that captures the strengths of those devices to do everything on a cloud-based platform, not a soup-to-nuts offering provided by EMC (EMC), Cisco (CSCO), IBM or, most importantly, Oracle (ORCL), all of which I expect to be losers in the coming year.
Those four companies have become dinosaurs in the face of the social, mobile and cloud revolution.Who has the smarts to harness these three? First is Salesforce.com (CRM), which has become the de facto new Oracle, the platform that all different functions can operate on. Workday (WDAY) for human capital and finance, KenAndy for enterprise resource supply, Veeva (VEEV) for global life sciences, Concur (CNQR) for travel and Facebook (FB) and Yelp (YELP) for social and mobile are all based on a Salesforce.com platform that allows for open solutions that cost so little for enterprises to adopt, once they have ripped out the legacy database plumbing. Watch for LinkedIn (LNKD) and Yelp to storm the gates as they are armed with both subscription and advertising models for recruitment and leisure respectively, and I am a huge believer that you need both advertising AND subscription sales in a world where advertisers are paying less and less to reach an increasingly mobile audience.
Yelp's been heading down of late and I think that it's the most likely candidate to be purchased by a larger company trying to get immediate access to social, mobile and the cloud. It was pursued by just about every major tech company in the space before it came public and I don't think it is trading at a level that's too expensive for Google (GOOG) or Facebook or Yahoo! (YHOO) or even Twitter (TWTR) to pull the trigger on. Don't want to venture into the ultra-expensive world of cloud-based systems, where the best acting stock is the 90x-earnings Workday? Then go with the way Action Alerts PLUS, my charitable trust, is investing in the new social and mobile world: Google. Here's a company that has quietly become the hottest business on earth, a company that's known for its superior search function, but should be known for its dominant advertising franchise, its best-in-class personal computing AND smartphone franchises, as well as an endless stream of popular devices that have not yet even begun to be monetized. I think that in 2014 you will see YouTube be commercialized in a shockingly positive and additive way and Google estimates are simply way too low. It could easily rally 25% when those numbers get bumped in early 2014. Sometimes you can judge a company by the desire of young people to work there. Google's probably the toughest ticket to get a job of any company in the country. Go ask your kids, they know. I can't place a soul there.