What will the hottest sectors be in 2008 and why?
There's no ONE correct answer to this question - what we want to see is a clear, concise and persuasive argument for why the sector(s) you've chosen will do well in the New Year.
Best Answer
236 points
Steph answered one year ago …
I also like the alternative energy sector, with emphasis on solar stocks. They have been taking off recently and I don't see that changing soon. Non US markets have strong directives toward solar and as they are in a growth phase, it stands to reason that they will continue to be strong. I however don't like the bio fuel portion of this sector. It's not working and the repercussions are causing a lot of disillusion. Not a good indicator if you want to make money.
Another strong sector will be international steel stocks. Steel is critical in building (as in China, India, Brazil) and rebuilding (as in war torn Iraq) as well as in automobiles, defense, etc. etc...
I also like precious metals. Gold as high as it is still has a lot of room to grow.
Oil will continue to be strong, but I prefer the oil service sector. Face it, we are going to continue to be dependent on oil for a while. The support sysem for oil is oil service.
I also like anything to do with increased food production. Fertilizer, bio genetics, seeds ... Population continues to increase and the worldwide food supply has been reported to have only a 60 day reserve. If that is true, then supply is short and demand high and that drives prices up. Also the misdirected interest in bio fuels is causing great shortages in food. Again, lower supply and greater demand = higher prices.
Answers
3127 points
EthanR answered one year ago …
I think the alternative energy sector will be one of the hottest sectors of 2008. This includes all forms of non-oil related energy, such as solar power, clean power plants, ethanol, biodiesal, renewable energy, fuel cell, biomass, etc. The reasons this sector will outperform include: 1) Increasing cost of oil 2) Media enhanced myths about severe global warming 3) The possibility of a Democrat winning the Presidential election 4) New emerging technologies, along with a reduction in cost for those technologies. All of this will add up to a stellar year for this sector.
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2547 points
Oldman answered one year ago …
I agree with Etan R.'s assessment. I would also say I'm biased towards "International" performing better than "US and Developed" countries, because with the recent bubble increase in fiat money, inflation is rising. Those industries that do not have commodity costs holding them back; those sectors that are not so sensitive to inflation, will probably do better. I think commodity exporting (countries and shippers) and basic staples: clean water, agricultural and food staples, health care 'serviceors' (the contract research labs and medical/Rx managers,) and other non-energy dependent sectors (IT,Wireless) will have an inflation-based advantage over heavy industrial and commodity consumers (Discretionary and Manufacturing). A bit further into the Future: FYI Turkey, Austalia and parts of the SE U.S. are in severe drought conditions. It takes tons of water to produce a gallon of milk on a supermarket shelf. It sounds crazy, but the infrastructure for safe water is just not there or is deteriorated. Look at British water utilities; the hassle in Ankara with switching the cities' water to supply one sideor the other for two or 3 days a week; the losses of the Australian wheat and dairy businesses. Look at the contracts for desalination plants in the urbanized Middle East. The "Blue Gold" is clean water. Those drought conditions vary from year to year, but the decreases in the relative abundance and increases in the pollution and waste of water is becoming a bigger problem than the exhaustion and pollution of petrochemicals.
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2703 points
MNSL answered one year ago …
Agriculture sector and animal production sector will be two of the hottest sectors in 2008. At the moment there is a big demand for palm oil, maize and Soya bean as raw materials for bio-fuel. Higher oil prices together with demand for tyres in China and India has created big demand for natural rubber. Demand from fast developing countries such as China and low inventory due to change of weather pattern in country like Australia has created demand for wheat, diary products including meat and chicken through out the world. Currently there is a big demand for above products and price is increasing rapidly. This situation will prevail until supply increase in above products probably at the end of 2008. Investors who invested shares related to natural rubber and palm oil companies in 2003 through out the world now have appreciated between 200% to1000%. Still you can find there are few under value shares in agriculture and animal production sector through out the world. For me that sector will be the biggest winner for 2008 and I will not put my money on assets appreciated by more than 300%. Finally this hot market situation can be changed suddenly due to unexpected events in the world. One such event is after Olympic game in China there will be less demand for certain commodities. Therefore prices will come down.
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104 points
wallstcasino answered 11 months ago …
I like the oil and gas sector, with emphasis on the oil services cos. Oil fields around the world are depleting faster than the general public realizes. This will support oil's high price as demand continues to grow in developing nations like China and India among others. Oil's high price will also increase demand for Natural Gas, keeping a floor under it's price. The CEO's of the major oil companies all agree that the easy oil has all been found. That means that all new oil that is discovered will be much more costly to extract and deliver. Very good for the oil services companies. I also like the agriculture sector because demand for food is increasing while crop yields are struggling to maintain current levels. As the huge populations of India and China become more affluent, they will demand better food. The use of corn for ethanol has further strained a system that was already under stress. Increased feed prices will be passed along in higher prices for dairy products and meat.
I think the solar energy stocks are very over-bought, and will have a nasty correction. Then it may be time to start buying. The whole alternative energy thing has become a mini-bubble, IMO. There are better places for your money short-term. Long-term, I think select alternative energy stocks will do well. But you must be selective.
356 points
SharonMR answered 11 months ago …
Oil hit 100$ a barrel on Wedneday, before settling down to a little over 99$. So it is the Oil Services, Energy Other and Metals and Mining Sectors that will be on everyone's minds for 2008. Gold is on it's way up because of the devaluation of the dollar. It will take a bigger chunk out of everyone's paycheck just to pay for the gas to go to work, if you work outside the home. And, because of Global Warming, people are looking elsewhere for alternatives to generate electricity and other utilities.
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