Since returns are asymmetric, gains from unanticipated events is where a great deal of the alpha in this market resides. Here are my long shots for this year:
1. Mark Hurd leaves the struggling ORCL to replace John Chambers at CSCO and it’s stock outperforms the tech sector.
2. The republicans take the white house, do away with Bernanke, and install a Volker-esk Chairman that is violently hwakish. This leads to an unsupported stock market that will remain highly volatile and less liquid. The VIX spends most of the year above 30.