TRADEKING STAFF MEMBER

The current issue of FORTUNE magazine (the Investor's Guide 2008) is chock-full of interesting articles, including a high-spirited investor roundtable with four market gurus -- Bob Rodriguez of First Pacific Advisors; Susan Byrne of Westwood Holdings Group; Sarah Ketterer, CEO of Causeway Capital Management; and John Eade, head of Argus Research. Each of these gurus weighs in with a market forecast for 2008. Collectively, the four tackle a number of major issues that are front-of-mind for investors heading into the new year: the odds of economic recession; the impact of problems in the housing sector on the broader U.S. economy; and possible scenarios for how the U.S. consumer will respond to higher prices and sluggish economic growth over the next 12 months.

For the TradeKing community: What are your economic forecasts for 2008? On his TradeKing blog, Sidarta Tanu has already predicted stagflation and recession over the next 12 months.

[image: FORTUNE Investor's Guide 2008]

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For many investors, 2007 has been a long, strange trip. Looking back on the past 12 months, investment guru Ben Stein (yes, the same Ben Stein of Win Ben Stein's Money) reflects on what he's learned about the financial markets. Acknowledging that many of his individual stock picks got "clobbered" this year, Stein provides some timeless advice for individual investors looking to adjust their portfolios for 2008:

"... [W]here Wall Street is concerned, a very healthy dose of skepticism is always merited. Just in the recent past, the movers on the Street have fooled us with junk bonds, savings-and-loan stocks, high-tech garbage, rotten collateralized mortgage obligations (although not as rotten as some think right now, perhaps) and their own highly questionable firms. The problem is always the same: nonsensical greed by the buyers and lack of fiduciary duty by the sellers. An extreme sense of skepticism is warranted whenever anything looks too good to be true anywhere. But if it’s coming out of Wall Street and looks complex, look out below.

Speaking of which, your humble servant expressed doubt about private equity and how it could keep making super returns by basically picking up a penny on the sidewalk, shining it up and selling it for a nickel, and then the next guy does the same and sells it for a dime. My doubts weren’t strong enough. It sure looks as if it was all a hot-potato game fueled by easy money. I got caught in it a bit with a few investments. It’s sort of terrifying that even I, a longtime investor, could be caught in that game. It was a small amount, but even that is too much."

Fortunately, everyone is blessed with 2020 hindsight. But there is a nice kernel of wisdom in there: If the only reason you're buying a stock is because you think it might be a takeout or buyout candidate, maybe it's time to do a little more homework.

[image: Ben Stein]

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Princeton economics professor Burton Malkiel, author of one of the all-time bestselling investment books, A Random Walk Down Wall Street, has just released a new book called From Wall Street to the Great Wall. Written with the assistance of two Chinese researchers, Malkiel explores how individual investors can profit from China's booming economy. With the Beijing Olympics coming up in August 2008, it's a safe guess that China will be in the news for at least the next eight months -- and that's even without any kind of emerging market volatility that might rattle the Chinese market during that time.

Anyway, I haven't had a chance to see a galley draft of the book, but it's being promoted in the Wall Street Journal and the likes of Abby Joseph Cohen (chief U.S. investment strategist at Goldman Sachs), David Swensen (chief investment officer at Yale University), and Mark Mobius (emerging markets guru) all have strong words of praise for the book.

For the TradeKing community: What do you think about the Chinese market in 2008?

[image: From Wall Street to the Great Wall]

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The arrival of the holiday season inevitably means Top 10 lists, year in review articles, and fearless forecasts about what will transpire over the next 12 months. Over at CNBC, you can also vote on your favorite "video moment" of the year. Two of the more noteworthy video clips include Jim Cramer's rant about Fed Chairman Ben Bernanke and a brief interview clip with legendary investor Warren Buffett, in which he explains what he keeps in his wallet.

Oh, and there's also a brief clip of Erin Burnett riding a real bull outside the New York Stock Exchange in January -- a very real reminder that the line between "serious business TV" and "entertainment TV" is increasingly a very blurry one indeed.

[image: Wake Up Fed!]

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