Doug Kass Releases His 15 Market Surprises for 2015 (AAPL) (GOOG) (TWTR) (GLD)
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As 2014 comes to a close it seems everyone has a "surprise" list for 2015. One of the best around (other than surprise list originator Byron Wein - which is due out in early January) is hedge fund manager and TheStreet contributor Doug Kass. Kass' 2014 predictions had a 40% hit rate, in line with his historical average. Below are his 2015 surprises:
1. Faith in central bankers is tested (stocks sink and gold soars). Kass predicts Mario Draghi is exposed as a bully that can't fight back. (Think Ralphie's bully in 'A Christmas Story'). He also sees Shinzo Abe and Haruhiko Kuroda resigning and said the Fed is trapped. Related ETFs: (NYSE: SPY), (NYSE: GLD)
2. The U.S. stock market falters in 2015.
3. The drop in oil prices fails to help the economy.
4. The mother of all flash crashes. Kass predicts North Korea hackers attack the NYSE and NASDAQ infrastuture causing the S&P 500 to fall by more than 5%
5. The great three-decade bull market in bonds is over in 2015.
6. China devalues its currency by more than 3% vs. the U.S. dollar.
7. Apple (NASDAQ: AAPL) becomes the first $1 trillion company. Kass sees EPS rising to $10/share despite a weak market backdrop. He calls it a must own.
8. Legislation is introduced that allows for repatriation for foreign cash.
9. Energy goes from the worst-performing group in 2014 to the best-performing group in the first half of 2015 and then falls back later in the year. Related ETF: (NYSE: XLE)
10. More chaos in the Democratic Party.
11. Food inflation accelerates after Russia halts wheat exports.
12. Home prices fall in the second half of 2015. A strategy Kass recommends for this potential surprise is shorting homebuilders. Related ETF (NYSE: XHB)
13. Individual and sector market surprises. Bank Stocks Fall; Carl Icahn takes a stake in Twitter (NYSE: TWTR) an forces a bidding war between Google (NASDAQ: GOOG) and Facebook (NASDAQ: FB) to acquire the company; Google Institutes a Share Buyback and Shaves Capital Spending; Corporate Inefficiency in Large-Cap Technology Targets Activist Investors - two hedges funds establish a filing position in Cisco (NASDAQ: CSCO) and force Chairman John Chambers out.
14. Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) makes its largest acquisition in history - Kass predicts $55+ billion acquisition is not in his customary comfort zone (a consumer goods company), but rather the deal is for a company in the energy, retail or construction/equipment areas.
15. A derivative blowup precipitates an abrupt market drop.
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