Surprise No. 9: The big market winners and losers of 2013.
The winners: Ford (F) and Altisource Asset Management (AAMC).
The losers: XLF, Morgan Stanley, Citigroup, Goldman Sachs, JPMorgan Chase (JPM) and asset managers.
Over the past few years (2010-2012), Altisource Portfolio Solutions ( ASPS) was my stock of the year. The shares of Altisource Portfolio Solutions, which traded at around $15 a share in late 2009, rose to nearly $130 a share several months ago. So, what is the next Altisource Portfolio Solutions, and what will be the stock of the year for 2013? My answer is that we don't have to go far from Altisource Portfolio Solutions. The stock of the year will be the recent spinoff of Altisource Portfolio Solutions, Altisource Asset Management. With a sharp trajectory of earnings growth (resembling that of Altisource Portfolio Solutions in 2010-2012), I expect Altisource Asset Management will trade over $150 a share sometime this year. Last year's surprise large-cap stock was Bank of America, which, after dropping by over 50% in 2011, climbed by over 100% in 2012. My surprise large-cap pick for 2013 is Ford. Trading at $13.50 a share, I expect Ford's share price to rise to above $17.50 a share in 2013 based on a combination of surprisingly strong domestic automobile industry sales (in excess of 16 million SAAR) and a revaluation (upward) in the company's P/E ratio. After an initial burst to the upside, overowned financial stocks are the big losers in 2013, as the financial transaction tax, weak capital markets, still-low interest rates and tepid merger-and-acquisition activity weigh on the sector. Strategy: Long AAMC and F.