Editor's Note: This column is a special bonus for TheStreet.com readers, written by Doug Kass. This piece originally appeared on Street Insight on Nov. 24, and RealMoney Nov. 26. To sign up for Street Insight, where you can read Doug's commentary regularly, please click here .

A year ago, I prepared a list of 25 possible surprises for 2003. These were not intended to be forecasts or predictions, but rather were intended to represent "overlays," meaning events that might have a reasonable chance of occurring despite very long odds. Let's call these 25 "possible improbable" events!

I have long felt that developing a variant view (read: surprise) remains an integral part of differentiating one's investment returns. Mainstream expectations are just that, and in most cases are deeply imbedded in today's prices.

The purpose of this endeavor is to consider positioning a portion of my portfolio in some part based on outlier events. After all, Wall Street research is still very much convention and groupthink, despite the reforms over the past several years. If I succeed in making you think about outlier events, the exercise has been successful.

Some of my surprises were on target last year; to be precise, about one-third of the "possible improbables" came true. In particular, the following events had a familiar ring for readers of my "2003 surprises":

  • We saw a 3.25% yield on the 10-year Treasury note.

  • There was further deterioration in AOL's ( TWX) subscriber base, and Steve Case was ousted.

  • The European economy was moribund during 2003's first half.

  • The New Jersey Nets basketball team enjoyed surprising success.

  • General Electric ( GE) had lower earnings guidance.

  • Democratic aspirant Al Gore bowed out of the presidential race.

  • There were no major terrorist acts in the U.S.

  • U.N. inspectors found no evidence of a weapon buildup in Iraq.

Here is my list of possible surprises for 2004:

1. A revolution in Venezuela overcomes the existing regime in early 2004 (four South American presidents have been toppled over the past four years!), cutting off oil production in that region and forcing crude oil to trade over $50 a barrel. The consumer is paralyzed, and retail sales nosedive. Rising energy prices and other cost push pressures (like health care and insurance) cause a minipanic in the world equities markets, and share prices plummet by more than 15% in a brief three-week period. At the same time, the U.S./China rift widens, and all-out trade war ensues (albeit briefly), crippling the U.S. apparel business.

2. Interest rates plummet and the yield on the 10-year Treasury note makes a new low, briefly breaking below the 3.00% mark by midyear. We end 2004 at about the same levels that exist today.

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