Earnings season (part3)

The shape of the business cycle has been determined;it will be like most of the business cycles since the 1970's.It will probably be a "u" shaped cycle and there will likely be two or more years of low growth before we have a downturn.The growth rate is probably going to be less than 2013 as we approach the top of the"u" curve.But what will be the likely winners?I turn to the teachings of another mentor Irene Spry who got her Ph.D from the university of Toronto.She was apparently a friend of the economist Harold Innis.Mr.Innis's theory was called the staple theory.It stated that the manufacturing and financial industry were built from the profits of staples.This I believe will be just such a year.Growth will come mainly from the staples.I predict a good year for the lumber,coal,natural gas and uranium sectors.Other winners will come from outperformers in sectors with average growth.As I believe this year will have economic growth less than 2013.Investment will not see significant growth;there will be investment for some innovation and for replacement of outdated equipment.There will not likely be a boom in investment.Exports and export earnings will be helped by the falling dollar that may hit $.88 relative to the American dollar.
  Winners
 The trend for new technology companies in U.S.A. will continue this year.Expect Twitter,Facebook and even Microsoft to move up.There may be one or two winners in this field in Canada but they will come from juniors.Large percentage increases can be expected from juniors like Vixs,Tucows,and maybe Mediagrif.I also expect Cameco,Ur-Energy,and Denison Mines to show increases in the uranium sector.New nuclear plants are coming onstream and old ones refurbished,This includes refurbishing in Ontario also.Natural gas is expected to rise and some LNG exports will help here.This will affect companies such as Peyto,Pengrowth,Birchcliffe and even Perpetual Energy.Air Canada is considered a "wild card".Its' new equipment and stable airline ticket prices may carry it higher.The agreement with Chorus will help Chorus and keep their ticket prices stable also.This indicates that traffic may be up in 2014.Lumber spot prices have moved up in 2013 and should continue in2014.Yet it is clear that the housing boom has peaked in Canada and U.S.A but not in Japan nor China.Look for Interfor,Western Forest and Ainsworth Lumber to show good percentage increases this year.Overall there will not be large increases in demand nor revenues so the emphasis will be on reducing costs to increase profits.