Doug Kass has been sharing his ten surprises for 2010 over the past few weeks on CNBC’s Fast Money. Friend Barry Ritholtz, writer of The Big Picture blog, has done the hard work of providing a neat summary.
1: I expect a series of populist initiatives by the current administration beginning by a frontal assault on mutual fund 12b-1 fees.
2: The Internet becomes the tactical nuke of the digital age. Cybercrime likely explodes exponentially as the Web is invaded by hackers.
3: Scarcity of water boosts agricultural prices and causes a military confrontation between China and India. The continued effect of global warming and the increasing scarcity of water drive agricultural prices higher. Biggest aspect of this: trade sanctions, then military actions, by India against China.
4: Food and restaurant companies are among the worst performers in the S&P 500 Index.
5: In 2011, Microsoft (MSFT) launches a tender offer for Yahoo! (YHOO) at $21.50 a share. With the company tee’d up, News Corporation (NWS) follows with a competing and higher bid. (Microsoft is successful)
6: Vice President Joe Biden and Secretary of State Hillary Clinton switch jobs by midyear 2011, 18 months before the 2012 Presidential election.
An Obama/Clinton ticket would be viewed by many as unbeatable. Clinton is a relentless campaigner and she would be a far more effect drawer of votes than Biden. (Consider how many votes Obama and Clinton combined received in the 2008 Presidential primary campaign.)
7: Partisan politics cuts into business and consumer confidence and economic growth in the last half of 2011.
8: The market moves sideways during 2011.
9: The price of gold plummets by more than $250 an ounce in a four-week period in 2011 and is among the worst asset classes of the new year. The commodity experiences wild volatility in price (on five to 10 occasions, the price has a daily price change of at least $75), briefly trading under $1,050 an ounce during the year and ending the year between $1,100 and $1,200 an ounce.
10: The SEC’s insider trading case expands dramatically, reaching much further into the canyons of some of the largest hedge funds and mutual funds and to several West Coast-based technology companies.
In the video clip below Kass shares the motivation for his 9th and 10th surprises.
Source: Barry Ritholtz, The Big Picture, December 21, 2010 and CNBC, December 21, 2010.
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