A long time ago in this very same galaxy, certain market strategists were perceived (rightly or wrongly) as "market movers." Amid the bubble-era hysteria and its aftermath, this column set out to determine which forecasters were worth listening to, culminating in the annual " Guru of the Year " award.

Years later, we resume the effort. Some of the names have changed, but the mission remains the same: to regularly update readers on the insights and prognostications of the so-called major strategists, and periodically hold their opinions up to critical examination. So without further ado ...

The vast majority of market pundits are forecasting decent, but not spectacular, returns for major averages in 2007, as reflected in TheStreet.com's 2007 preview and other surveys of a similar ilk.

Against that backdrop, Bob Doll, chief investment officer of global equities at BlackRock, which has more than $1 trillion under management, seems to have a fairly mainstream outlook. Doll is "fairly constructive" on U.S. stocks in 2007, saying the "path of least resistance" remains higher for equities but volatility -- in both directions -- should rise, as has been evident in intraday trading so far in January.

Doll is forecasting growth of about 8% to 12% for both major U.S. and international proxies this year. Among overseas markets, he is particularly bullish on Japan and Brazil but is becoming more upbeat about U.S. stocks vs. global equities after several years of (correctly) preferring the latter. Within the U.S. market, Doll prefers high-quality and big-cap stocks over low-quality and small-cap names, a forecast that is off to a solid start in 2007 and is shared by many.

Doll also favors growth over value, and named energy, health care and tech as favorite sectors, the latter because of a view that corporate technology spending will increase in the months ahead after having lagged behind overall corporate earnings growth in recent years.

Doll couldn't provide specific recommendations, but on my podcast last week he listed Exxon Mobil ( XOM), Chevron ( CVX) and Marathon Oil ( MRO) as examples of energy names that fit his high-market-cap/high-quality criteria, saying "short-term setbacks in fundamentals have been largely discounted" among the major integrated oils, which stumbled into 2007 in conjunction with falling oil prices.

(On Tuesday, crude fell to a 19-month low of $51.21 per barrel after Saudi Arabia said there's no need for further OPEC production cuts. Intraday Wednesday, crude traded as low as $50.50 before rebounding to settle up 2% at $52.27.)

Doll cited Aetna ( AET), Pfizer ( PFE) and Schering-Plough ( SGP) as health care favorites.

In technology he mentioned Cisco ( CSCO) (which was dinged Tuesday by downgrades from Prudential and Bank of America), IBM ( IBM), Hewlett-Packard ( HPQ) and Applied Materials ( AMAT). On the podcast he called the latter a "slightly riskier name but one that could do well in this environment."

Granted, Doll didn't generate a lot of fireworks at his annual "10 Predictions" briefing on Jan. 9, or on my podcast the following day. But BlackRock has more than $1 trillion in assets, making Doll among the few market participants with enough firepower to make his forecasts self-fulfilling.

Various and Sundry

The "big vs. small" trade mentioned above has repeatedly frustrated the big-is-back crowd in recent years, and again in 2006, when the Russell 2000 surged 17% vs. the Dow's gain of 16.3% and the Standard & Poor's 500 13.6% advance. The Nasdaq Composite was the laggard, gaining 9.5%.

However, Merrill Lynch's quantitative strategist Richard Bernstein makes a very salient point: Including dividends (a.k.a. total return), small-caps haven't really been the belles of the ball since 2004, on the basis of the performance of the S&P 500 vs. the S&P Mid-Cap 400 and the S&P Small-Cap 600.


Totality of Returns
Including dividends, small-caps really haven't been the stars in recent years
S&P 500 S&P Mid S&P Small
2001 -11.90% -0.60% 6.5%
2002 -22.1 -14.5 -14.6
2003 28.7 35.6 38.8
2004 10.9 16.5 22.65
2005 4.9 12.6 7.7
2006 15.8 10.3 15.1
Source: Merrill Lynch
Bold = Best annual performance

Speaking of Bernstein, he too is forecasting 8% to 12% gains in 2007. But he can't shed the "bear" moniker, perhaps because of notes like one released Friday, which sounds like it could have come from the mouth of Doug Kass :

We view financial risk much like popcorn popping in a microwave. Until the first kernel pops, one tends to believe that nothing is happening. The initial pop seems like a random event until a second occurs. A third. A fourth. Then the popping goes wild," he writes. "With major central banks still in a tightening mode, it is probably more prudent to view last year's hedge fund fiasco Amaranth as the first kernel of popcorn popping rather than as an isolated event of no consequence. Other kernels have started to pop.

(Bernstein wrote that after the Bank of England's surprise rate hike last week and ahead of Thursday's Bank of Japan policy meeting, in which rates the BoJ policy board voted 6-3 to keep monetary policy steady.)

"Sub-prime mortgages. Pop!" Bernstein wrote ahead of IndyMac's ( NDE) implosion on Tuesday.

"Thailand. Pop! Venezuela. Pop!" he wrote after major setbacks in emerging markets amid anti-capitalist policies.

"Commodities. Pop!," Bernstein wrote Friday, followed by a note Monday in which he observes the CRB Index and Goldman Sachs Commodity Index are each down more than 20% from respective highs, a.k.a. in bear-market territory.

"Those investors who have positions in commodities for long-term diversification purposes (i.e., five to 10 years) should maintain those positions, in our view," the strategist concludes. "However, we continue to believe that those who have invested in commodities in an attempt to boost shorter-term returns are likely to be disappointed."

Clearly, that has been the case since mid-December; since then, crude is down nearly 19%.

On a related note, large speculators are now net short crude oil futures by the most since the week ended Feb. 28, notes Tony Crescenzi, chief fixed-income strategist at Miller Tabak and RealMoney.com contributor, citing data released Friday by the Commodity Futures Trading Commission. In addition, the MarketVane bullish consensus on oil futures has hit 44% -- the lowest level since 2003.

"The positions of large speculators are often seen as a contrary indicator when they reach extremes or have large swings over short periods of time," Crescenzi writes.

In conclusion, I'll add that a cold snap in the Northeast, a worsening or widening of the war in Iraq and/or a terrorism event could quickly send those speculators scrambling to cover. Bullish comments by veteran energy investor T. Boone Pickens in The Wall Street Journal and CNBC, and Jim Cramer regarding the action in Nabors Drilling ( NBR) and natural gas in our Wall Street Confidential video segment Wednesday only reaffirm my faith in the near-term upside potential for energy and related stocks.

Indeed, not all gurus are created equal.
Aaron L. Task is the editor at large of TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He appreciates your feedback; click here to send him an email.