Best Guess 2008

We saw record out flows from equities in the past three weeks...the crowd is again wrong!

In 2008:

1) Stocks will outperform bonds.
2) Bonds could get crushed, people chasing safety have them way over bought.
3) Stocks outperform selected real estate.
4) Oil goes to $125, Gold follows oil higher
5) Nat gas $10.
6) A republican wins the White House.
7) The S&P 500 is up 10% and out performs China and Europe.
8) Housing bottoms second half of the year.
9) Food costs go higher yet.
10) Big cap stocks out perform small cap stocks again.
11) Private equity has a down year and most hedge funds underperform again.
12) The dollar stops going down against the Euro and Britsh Pound.
13) Commodities continue their rally.

To be a succesful contrarian, you have to assume that the masses, in general, lose money. Too many people traded the markets of 2007 and lost a lot of money. 2008 will be largely the same, emotion will get the better of people in the election year and Peak Oil.

2007 Year to Date:

By Capitalization
>$20 billion +24%
<$250 million -18%

Big companies like doing business with big companies and small companies now have rising costs of capital....thus it is very hard to grow a small company and compete when all costs in general are rising like right now.

The positives continue to be under reported!

Danny Boy seen here on one of the shortest days of the year can hardly wait for 2008.