This commentary originally appeared at 7:00 a.m. EST on Dec. 27 on Real Money Pro -- for access to all of legendary hedge fund manager Doug Kass's strategies and commentaries, click here.
"Never make predictions, especially about the future."While I had a reasonably successful surprise list for 2011, with about half my surprises coming to fruition, the real story was that I achieved something that is almost impossible to accomplish. My most important surprise (No. 4) was that the S&P 500 would end the year at exactly the same price that it started the year (1257) and that the range over the course of the year would be narrow (between 1150 and 1300). As explained below, both predictions were remarkably close to what actually occurred.-- Casey Stengel
My Biggest Surprise for 2011 Was Eerily PrescientAs we entered 2011, most strategists expressed a sanguine economic view of a self-sustaining domestic recovery and shared the view that the S&P 500 would rise by about 17% and would end the year between 1450 and 1500 vs. a year-end 2010 close of 1257. >>Bonus: 5 More Surprises for 2012 By contrast, I called for a sideways market, stating that the S&P would be exactly flat year over year. To date, that surprise has almost come true to the exact S&P point. Remarkably, at around midday last Friday, Dec. 23, the S&P 500 was trading at 1257 -- Friday's closing price was 1265 -- precisely the ending price on Dec. 31, 2010! (There are still four trading days left in the year, so technically the exercise is not yet over.) A flat year is a much rarer occurrence than many would think. According to The Chart Store's Ron Griess, in the 82 years since 1928, when S&P data was first accumulated, the index was unchanged in only one year (1947). And in only three of the 82 years was the annual change in the S&P Index under 1% -- 1947 (0.00%), 1948 (-0.65%) and 1970 (+0.10%).