If you sat in to a card game in a casino, and the dealer could flash cards to one of the players but not you, and that player and the dealer could count cards (but not you), and that player and the dealer both knew (a) how much money you have available to bet, and (b) exactly how you do bet under every permutation and combination that is possible, but you had never met these people before, and believed the game was a fair one, please tell me what chance you think you'd really have of winning that night?

You really have to stop being so credulous (i.e., gullible, naive, trusting, unsuspecting, innocent, and uncritical " per the Bill Gates Thesaurus). You have to recognize that there are players who are shrewd (etc) and deceitful (etc) as well.

Before I get to my predictions for 2006, let me tell you what my barber said yesterday before turning the TV to CBNC, apparently to please me. But little did he know. And worse, I watched the six others who were waiting (who had been calmly watching the News until the channel changed), start to squirm as the CNBC talking heads cranked up the tempo.

And I thought to myself that in my space I am not threatened by CNBC because I know how to filter it, and trade against the storytellers, but to a public audience there is a total disconnect. The people in that barbershop stopped watching the TV a minute after it had been tuned to CNBC, and their level of anxiety " just being in the same room " was heightened.

In a word, they were threatened.

So my barber says: "All that stuff on ROBTV, CNN and CNBC is bad. They don't know what they talk about. If the market goes up they say ‘buy', and if it goes down they say ‘sell'. The best thing to do is do the opposite to what they are saying they do. The only good thing about the market is a newspaper called Barron's. Do you know that paper?"

I swear; that " word for word " is what he said.

And I thought this guy doesn't need my crystal ball. Except that his name is Luigi and not David, he might even be the person who wrote The Wealthy Barber. :-)

Now to my predictions for 2006:

1. Bonds ought to remain flat, but will likely outperform equities, particularly in the U.S.. This will be a year to avoid credit risk in the bond market. Also, traders ought to be looking at foreign government issuers where yields exceed those of the U.S. or Canada, but only where the sovereign debt ratings are solid.

2. The trade-weighted USD will weaken starting immediately, especially against the commodity-based currencies like the Cdn and Australian Dollar, Brazilian Real and Russian Ruble, and to a lesser extent to the economy-sensitive Japanese Yen, India Rupee and Swiss Franc, and possibly remain in a narrow trading range against the Euro and British Pound.

3. Real estate will begin a five-year phase of flat prices and very slowly rising financial returns. The losers will be those people who joined the rush to buy homes for investment purposes because their financial returns will significantly under-perform for several years now. Moreover, should interest rates lift 100 to 200 basis points or more from here, there will be a deflation concern. The bottom line however is that I do not foresee a hard landing in this market.

4. Europe and U.S. equity markets will go through a bear phase that will likely present huge opportunities to those traders who have the cash set aside to make purchases off the bottom. I am undecided yet as to whether the landing will be a hard or soft one.

5. China's Shanghai and Shenzhen equity indexes will finally outperform Europe and North America. While other markets suffer through a difficult bear, China will remain fairly flat, and will outperform on the upside in the next global equity bull market.

6. India's Bombay Sensex Index will suffer a spike bottom during the global equity bear phase, but will come back strongly and possibly become the number one market performer by year-end 2006.

7. For North America, 2006 will be known as the Year of the Metals, especially precious metals. More on this later.

8. The Oils will continue to outperform the broad indexes in the U.S.. The Drillers in particular may have a good year, and of course the Big Oils that raise their dividends and continue the share buybacks will likely do well.

9. The export-oriented U.S. Industrials will moderately outperform, particularly 3M and GE, in a bull phase, as will the large caps that have major foreign operations, due to a falling USD. Less favored will be the aerospace and defense stocks because Congress must cut back on spending there. Boeing's good fortunes are already priced into the stock.

10. The U.S. Consumer sectors (Discretionary, Staples, and Healthcare) will be significant under-performers because of credit and income/spending problems of U.S. consumers. Big Pharma will be held in check by legislators and regulators, and changing labor contracts. Import-based retailers will have a difficult time with a lower USD, and lack of pricing power. Staples (beer and wine, tobacco, soap, food) will outperform on a relative basis in the Consumer sectors.

11. The U.S. investment banks will out-perform the broad market as well as the Financial sector, but the lending banks and mortgage companies will under-perform. The bankers that are strong in Mergers & Acquisitions, IPOs, and Bonds/Fixed Income products, will do very well. Increasing bad debts and the need to increase loss reserves, which hurts profitability, will challenge the lending banks. Mergers in that industry will prove more costly and less accretive to future earnings than projected.

12. The Utilities will have a soft landing due to the relatively strong bond market going forward. I like the natural gas, nuclear power and water utilities. Within the sector, the others will be relative under-performers unless they use cash flow to pay down debt, increase dividends and/or do more share buy-backs, which is the desirable thing to do for this sector if interest rates stay low. The losers will be those companies that elect to expand in 2006.

13. Technology will very much depend on the industry group and sub-group. Here is where the small caps ought to outperform, especially if they have technologies or operations that fit well with the emerging economies. I like SNDK (and the flash memory card industry) " even bought a 512-MB card for my digital camera yesterday. But the biggest losers in a bear phase will be the ones with the biggest liars among their promoters. The Internet sector will continue to rocket after a bear phase and will far out-perform the broad market. Stick with the good promoters at that time.

14. If 2006 really does turn out to be the Year of the Metals; then small exploration company promotions (on the Toronto Venture Exchange) will become the Buy of the Generation. If there is one change of focus for me in 2006, it will be my search for and reporting of the best of the best speculative situations in this group. I will have to be very careful not to mislead anybody, but you will likely see that my personal portfolio will actively trade some of these micro-cap companies, which means that I might be holding them for a couple weeks, days or even hours.

15. The Blogosphere will carry on the good fight against Mainstream Media, and the fights will get ugly. The vested interests behind MSM have a massive investment they want and need to protect. I believe that the closer many of these companies (TV, radio, newspapers, magazines, advertising agencies) come to going under, the more desperate they will become, and the closer they will look like advertorial media. Bloggers have to recognize that not all MSM is bad. Some of it works to a much higher standard than even the most popular of bloggers. As I see it, the Blogosphere is like a sophomore athlete who needs to strive for consistency, and needs to continue setting higher goals and working harder to achieving them. I predict that will happen in 2006.

16. The regulators have reached a point of no return. It's ironic but what helped me come to this conclusion was the Martha Stewart story. The Little People's icon for excellence, value-add, and the like, was subjected to persecution far in excess of her crime by authorities who for years looked the other way when their friends in high places routinely committed much greater sins. Regulators have been overwhelmed by the market's bad actors, and have a need to admit to Legislators that the financial and capital markets must be restructured. I predict that will not happen in 2006 or 2007 or until there is a change of thinking in the White House. Consequently I predict there will be more consideration and planning of globally-oriented financial services companies in 2006 to move their headquarters or key operating units to offshore jurisdictions like Switzerland, Bermuda, Channel Islands, and the like, particularly those who primarily serve the affluent market.

17. Inflation in 2006 will grow slowly because of wage inflation. There is a growing need of the world's workers to obtain higher incomes so they can maintain a standard of living. As I see it, the workers are growing increasingly discontented with flat to 2 pct wage growth, loss of employment benefits, and loss of job security, while the senior officers and directors are growing increasingly wealthy. I predict this disconnect will lead to a series of strikes, work stoppages and general discontent in 2006.

18. Finally, I do not like what I see shaping up as a Trade War. When free capital markets are burdened by the actions of politicians and civil servants, there are less resources being directed to wealth creation. I predict we'll see a lot more problems in this area in 2006.

Pardon my rambling, but this really was a navel-gazing exercise.