5 Surprises and 5 Disappointments of 2012

Where the year provided delights and let us down

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5 Surprises and 5 Disappointments of 2012

I suppose any one year isn’t all that different from other years. They all have disappointments and surprises. Market ups and downs come and go, and as far as politics and economics, they tend to be anyone’s — or everyone’s — guess. After all, how many people would’ve bet President Obama would be reelected in 2012 after the 2010 House of Representatives debacle, or that the eurozone and Greece would be so big a part of the daily investment chatter?

Whether you view Obama’s reelection as a surprise or disappointment is a personal matter, so in keeping with that spirit, I’ve come up with my own little list of ups and downs in 2012. Of course, you can’t please all the people all the time, so feel free to add to either list below.

In the meantime, here goes:

2012′s Surprises:

1. Sprint (NYSE:S) managed to pick itself off the floor and flourish. The stock was hovering around $2 per share but rallied to a remarkable 137% year-to-date increase, now steadily over $5 per share.

How did it pull this off? After a series of what appeared to be head fakes and lots of speculation on merger or acquisition partners, including MetroPCS (NYSE:PCS) and Leap Wireless (NASDAQ:LEAP), Sprint announced a combination with Japanese mobile operator Softbank. Does this mean Sprint can unseat either of AT&T (NYSE:T) or Verizon (NYSE:VZ) any time soon? Not likely, but however you look at it, successfully integrating these two is a surprise.

2. The banking industry was just a mess for a very long time, what with TARP and lawsuits, “Tier I” capital requirements and Dodd-Frank. But 2012 was breakout for the entire sector, led by an astonishing run-up of 102% by Bank of America (NYSE:BAC), and 30% by JPMorgan (NYSE:JPM).

As I pointed out before, the popular banking sector exchange-traded fund Financial Select Sector SPDR (NYSE:XLF) gained nearly 25% year-to-date, and investors clearly believe that either a) the troubles are behind the sector, or b) too-big-to fail is still the best bet when it comes to investing.

It will be very interesting to see if the sector can maintain its momentum with newly elected Senator Elizabeth Warren (D-Mass.), set to join the Senate Banking Committee. This should be fun to watch!

3. Yahoo (NASDAQ:YHOO) was belittled from the first day of the year right through July when the beleaguered Internet portal hired Marissa Meyer away from Google (NASDAQ:GOOG). Meyer is a bit of a tech rock star, and her first order of business was to let everyone know that a “mobile” strategy was in the cards.

Of course the strategy hasn’t paid any dividends (pun intended) to date, buy Meyer managed to jawbone the stock up nearly 20% on the year. I suspect the Street will give her plenty of time to work through the kinks in 2013.

4. Samsung‘s Galaxy lineup of mobile phones surprised and delighted lots of people who got tired of Apple‘s (NASDAQ:AAPL) iPhone 5 being all anyone wanted to talk about.

Samsung started out the year on the losing end of a lawsuit with Apple, but ended it with a win in the courts that kept its mobile product line on the shelves. And guess what? Samsung’s Galaxy III phones outsold the (older model) iPhone 4. Now, one quarter does not a pattern make, but take it from someone who saw plenty of Samsung devices overseas: This is no fluke, and Apple best pay close attention.

5. Housing improved slowly but surely throughout the year, capped off by the recent rise in home prices. Each month’s report suggested a rebound and tagging along with the good news was Home Depot (NYSE:HD), up over 40% on the year. Homebuilders also saw gains, with Hovnanian (NYSE:HOV) up over 300% and Toll Brothers (NYSE:TOL) up over 50%. Fingers crossed on this one!


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