25 Surprises for 2007

This piece originally appeared on Street Insight on Dec. 11 at 8:21 a.m., and is being republished as a bonus for TheStreet.com and RealMoney.com readers. For more information about subscribing to Street Insight, please click here.

Every December, I take a page from former Morgan Stanley strategist Byron Wien, now the chief investment strategist at Pequot Capital Management, and prepare a list of 25 possible surprises for the coming year.

These are not intended to be predictions but rather events that have a reasonable chance of occurring despite the general perception that the odds are very long. I call these "possible improbable" events.

The real purpose of this endeavor is to consider positioning a portion of my portfolio in accordance with outlier events -- with large payoffs. After all, Wall Street research is still very much convention and "groupthink," despite the reforms over the past several years. Mainstream and consensus expectations are just that, and in most cases they are deeply imbedded into today's stock prices. If I succeed in making you think about outlier events, then the exercise has been worthwhile. ...