Doug Kass Predicted 15 Big Surprises For 2012 — Here's How They Did

Doug Kass

Every year, Doug Kass releases a comprehensive and ambitious list of surprises for the upcoming year.

As in previous yearshis 2012 calls covered everything from politics to global macroeconomics to market technicals.

We went through and scored each of his predictions.

This year they were challenging for him, but that’s only because he’s so creative in calling out long shots that are intriguing.

Half Right

Directionally, Kass's call has been correct. The S&P 500 surged to a high of 1,474. But it's still well below the all-time high of 1,527.

Score: 0.5/15

Half Right

Real GDP growth decelerated to +1.3% in Q2 from Q1's upwardly revised 2.0%. Q3 GDP has picked up to 2.7%.

However, economists are now expecting deceleration in Q4 as global economic and political uncertainty drags on growth.

Score: 1.0/15

Wrong

This seems like a good idea, but it has not come to fruition. President Obama has taken on a much more involved role in negotiating a resolution to the fiscal cliff.

Score: 1.0/15

Wrong

Barack Obama won the election.

Score: 1.0/15

Right

In September, ECB chairman Mario Draghi announced the launch of Outright Monetary Transactions, which allowed the bank to buy 1-3 year debt in unlimited levels.

Meanwhile, euro area GDP fell by 0.1% in the third quarter of 2012.

Score: 2.0/15

Half Right

This hasn't happened, but the idea of adopting an unemployment rate target certainly has fans on the Fed board.

Score: 2.5/15

Wrong

While the future still does not look good for the storied retailer, it hasn't gone the way of the Twinkie.

Score: 2.5/15

Wrong

While US companies were the victims of several cyberattacks, there were no major reported incidents of government computers getting hacked.

Score: 2.5/15

Right

SPDR's financial stocks ETF has gained more than 30 per cent on the year, far outpacing the S&P 500.

Score: 3.5/15

Basically Right

With stocks being up, you'd think that high beta stocks would be up much more. But according to the S&P 500 High Beta index and the ETF (SPHB) that tracks it, high beta stocks are trading in line with the market.

Score: 4.5/15

Right

According to data from ISI, net mutual fund inflows are $220 billion for the year through October 31.

Score: 5.5/15

Wrong

Despite high corporate cash balances and cheap debt, M&A activity is at the lowest level since Q1 2010 according to Ernst & Young.

Score: 5.5/15

Wrong

Assets continue to flow into ETFs like crazy. But Laszlo Birinyi notes that there have been a notable increase in ETF liquidations.

Score: 5.5/15

Half Right

Many now believe China is in the clear: recent data prints were all positive and big name investors (including Kass himself) say they're going long. India, meanwhile, remains a basketcase.

India's problems appear no worse than China's. Moody's recently reaffirmed the country's outlook as stable citing a high household savings rate and relatively competitive private sector that will ultimately increase GDP growth.

Score: 6.0/15

PREDICTION: Israel Attacks Iran

Wrong

For all the talk, nothing ever came to pass.

Score: 6.0/15

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