The Next Big Things

07/25/2012 10:00 am EST

Focus: MARKETS

David Callaway

CEO, The Street, Inc.

With the financial industry in long-term decline, look for energy, mining, and Earth sciences to drive the next bull market, says David Callaway, editor-in-chief of MarketWatch.

What the new bull market will be. We’re here with David Callaway who is going to tell us what it will look like. Hey, David.

Good to be here. Well, first of all I’m not entirely sure we are done with the old bull market. We’ve been running for three years, we’re in a period of correction, summers are always difficult for stocks, but I think the US growth story is secure heading into the election. I think we still may see a couple years of good growth in the US stock market before we get to the next bear.

Looking at it longer-term, I think the financial crisis really created a seismic shift in the way we view opportunities in various professions in the US and globally. Specifically, I think financial services, which has been a dominant profession for 25 to 30 years, is going to fade a little bit.

Wall Street has already cut about 25% of its jobs from the peak; it looks like they are going to do another 25% before this is all over. The segment of the smart folks coming out of college and universities these days going into investment banking, I think is going to shift seismically over the future. Investment banking is not going to be as profitable, it’s going to be more highly regulated and it’s going to be viewed as less of an opportunity for smart people to go in and make money.

What they will view is an opportunity to kind of do something a little bit more for the planet. If we talk to some of the young people, they want to do more than just make money these days. I believe those opportunities are going to be in the energy sector. Energy, not the environmental stuff, but…

The broader picture.

The broader energy. Minerals extraction, working with the planet and the atmosphere an the oceans to use technologies to develop things that will create vast new services for mankind, and basically be a much more productive outlet for our best and brightest then just going in and making money…

Making something out of nothing, as opposed to making something out of something.

If you look, every generation has its bull market. In the 80s, it was clearly financial services. In the 90s, it was tech, Internet, right? Again, a seismic shift in the way we live and interact. In the 2000s, it was housing…and you could make a case for gold, more of a defensive play in the 2000s because we had these…

Hard assets.

Yeah. It’s clear we’re going to have another one. It’s going to be a different sector. It’s not going to be a rotation back to financials. That’s why my money is betting on kind of energy, minerals, even weather in a way.

Oh, yeah. Weather forecasting. I know Siemens (SI) and IBM (IBM) and all of those.

Yeah, there is a ton of money being put into it. If you look at it from the retail level, weathermen are the most, aside from journalists, maybe the most reviled people on earth because they always seem to get it wrong, despite all of this fabulous technology.

Once they get the technology a little bit better, and it is improving over the decades, then we’ll be able to kind of impact that weather, have an effect on it. I think, again, it’s vital services for mankind, it’s incredibly profitable when we do it well, and it’s a good way for the young and the best and the brightest to give back to society.

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