What is it about humans that makes us so bad at predicting the future?

Behavioral economists have found that, as a rule, we're just not that good at guessing how happy we'll be when we move to a new city, say, or if we win the lottery.

And in the stock market, it's no different. Rather than investing in what you think will happen, it seems a wiser strategy to invest according to where the predictions of others will be wrong. Fortunes can be made when conventional wisdom falls through.

Yet people like me insist on nattering on about what lies ahead. So, following the example of pundits, like TheStreet.com's Michael Comeau, who have the temerity to revisit predictions made hundreds of trading sessions ago, I'll look back on the trends that I expected to drive tech in 2006 -- and even grade myself on each.

Watch for a leader in online video to emerge.

Thanks, Googlers. About this time last year I wrote, "The biggest star in online video -- and most likely one of the most sought-after acquisitions of 2006 -- appears to be YouTube." It turned out that the No. 2 video company, Google ( GOOG), bought YouTube but kept its own video site independent. In 2007, it will be interesting to see if the two integrate, or split off into separate directions.

Grade: A

There will be more people touting podcasting than listening to podcasts.

True enough. A Factiva search for "podcasts" turned up 14,584 stories in 2006, up from 5,106 in 2005. There was certainly a lot of chatter about podcasts, although it seemed to quiet down as the year went on.

How many people listened to podcasts? It's hard to say, but you can get a rough idea from Google Trend's search data. Search volume on the term peaked at the end of 2005 but slumped throughout last year.

I'd say the podcast hype has passed for now, but I still stumbled when I said consumers would turn instead to downloadable video. There are just too many barriers -- speed, resolution, convenience -- that will make downloading videos too onerous for a while.

Instead, people went nuts for sites like YouTube that used Macromedia's Flash technology. Compare Google Trends' search data on "YouTube" vs. "podcasts" to get a snapshot of the real trend in 2006.

Grade: B

An Internet backlash will dampen stock prices for a while.

Saying stocks will drop at some point during the year is a very safe bet, but the summer swoon in Internet shares -- dragging even Google down for a while -- was an unsettling one. At the darkest hour, major tech indices, as well as most of the top Internet names, were down more than 20% -- the number commonly used to describe a bear market.

I wrote: "My guess is things will come to a head over privacy concerns." That was a decent guess: Google fought the Bush administration's order to turn over private data, and Time Warner's ( TWX) AOL let its users' search data slip out for all to read. But none of these had as much impact on stocks as good old-fashioned deteriorating margins, the big reason for the slump.

Also, by year-end, most Internet stocks had more than recovered their lost ground.

Grade: B.

Companies will get better at profiting from the open-sourcing of the U.S.

It's safe to say I blew this one. Not because open source wasn't embraced by public companies -- it was -- but because of how they embraced it.

Open-source and open-format applications don't really boost revenue; they weigh down operating costs simply by being free, whether through browsers such as Firefox, software platforms such as Linux or information databases such as Wikipedia. Lots of companies benefit, but not in ways that can be easily quantified.

Of the companies I mentioned as beneficiaries -- Red Hat ( RHT), Motorola ( MOT), Novell ( NOVL), IBM ( IBM) and Sun Microsystems ( SUNW) -- only the latter two were up for the year.

Grade: D

On-demand software will face tough tests, and its future will rest on the outcome.

Salesforce.com ( CRM), the pioneer in and proxy for on-demand software, did have a rocky year and managed to pull out OK. Its stock, which started the year at $32, fell to $21 in July but rallied back to close the year just shy of $37.

After Salesforce suffered a major outage in December 2005, I argued it would face more in 2006 and, taking a page from eBay ( EBAY) in the '90s, upgrade its system to prevent them. Sure enough, January saw two more outages. The company invested millions to improve its system and set up a system-status page.

I'm not sure the sector's future rested much on that, though. A bigger question is how smaller companies such as Salesforce will respond to the rebound at Oracle ( ORCL), whose stock rose 40% in 2006. That remains to be played out this year.

Grade: B

Nanotech will underwhelm -- again.

Actually, no one was really calling 2006 the year of nanotech. It's safe to say the same for 2007.

Grade: Easy A.

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