The Globe and Mail, Report on Business
Published December 27, 2008

The year 2008 was a tough one for prognosticators. Certainly my previously impeccable record was severely tarnished. Last year's Christmas column had a few things right - Bill Holland got his bank, the Buffalo Bills disappointed Toronto and people watched less TV commercials - but it had far too many omissions.

I didn't expect Phillips, Hager & North to also get "bankified," nor did I anticipate Eric Sprott, Henry Paulson and Mats Sundin's notoriety. I totally missed the stir Madonna would cause, although I personally don't think being in great shape and touring at age 50 is such a big deal. And there was a small matter of the worst stock market crisis since the 1930s.

So it is with great trepidation that I offer my forecast for 2009.

It will be hard to overstate the impact of the recession, but lots of things will be seriously overblown in 2009, including Warren Buffett's downfall, the death of investment bankers and hedge funds and the push to de-risk portfolios. In general, the word "unprecedented" will be used too often and there will be too many pronouncements of paradigm shifts.

As the year goes on, however, we'll start to realize some benefits from the recession. Canadian companies that are well-financed and have strong leadership will have their best opportunity yet to expand outside our borders. Service from retailers, restaurants and professional organizations will improve, because no sale or job will be assured. Traffic on the roads and public transit will be lighter as we spend more time at home. And we can go back to being patient buyers of everything - houses, flat screens and stocks.

For the RRSP season, the investment industry will shift its advertising themes away from French vineyards and golf in Florida to more modest settings. An ad showing a group of people sharing a cup of hot cocoa at the curling club will be accompanied with the tagline, "Your investments don't matter when you're with good friends." Guaranteed Investment Certificates and money market funds will be big sellers, as will products with "protected" in the name.

The industry awards dinner will be slightly less self-congratulatory this year. After all, it's tough giving a standing ovation to the manager who wins the Lipper one-year Asian fund category with a minus 40-per-cent return.

Applause will be more robust, however, for Canada's largest fund, the Investors Group Dividend Fund, when it wins the award for the highest fee in an income role.

The grand prize for the best performer in 2008 will go to a money market fund run by a junior trader.

In a related matter, Health Canada will recommend the following warning label be placed on quarterly investment statements: "Caution: This report could cause heart attack or severe depression."

In sports, the Yankees and Mets will pay up big time to miss the playoffs again (it's a beautiful thing), Leafs general manager Brian Burke will draft twins in the first round and trade for a stud defenceman, and LeBron James will re-sign with Cleveland when they agree to name the city after him.

The year 2009 will bring some interesting product developments. Nintendo's Wii will continue to build a following with the older generation. It will release a new title, Book Club, in February, and add a riding cart version of Wii Golf.

Country and western will become completely indistinguishable from pop music when crossover albums by Celine Dion (I'm Truckin' My Heart Out Of Vegas) and Michael Buble (Hank Williams Smoooooth) are released.

And snow skis will start to get thinner again after people realize they can neither turn nor carry their fat ones.

Some things that were cool in 2008 will be passe in 2009 - selling short, conspicuous consumption, iPods (even my father-in-law has one), yoga and the colour green.

What will be cool is walking, simplicity, buying stocks when they're down, direct mutual fund investing, amateur Olympic athletes and, as always, Steve Nash and Cate Blanchett.

Despite sluggish ad sales, 2009 will reveal that there is still rampant inflation in the media world. We'll continue to see an escalation in the number of talking heads on CNN and CNBC, and the television schedule will have an ever-increasing number of awards and dance shows.

In 2009, the following will be found out for what they really are - economists (trend followers), OPEC (useless), Russia (the world's biggest risk), China and India (highly sensitive to the world economy), Coldplay (background music), Mats Sundin (over-hyped) and Oprah's trainer (missing in action).

The recession and low oil prices will slow the green movement's progress, but an encouraging report will be released showing that Wal-Mart and Procter & Gamble could do more for the environment than any government policy if they simply eliminated excessive packaging.

I predict that a 2009 "best value" list will include a barrel of oil, high-end used cars, Canadian indie music, tea bags from Costco, charlierose.com (if you can stand Charlie) and organ donor registration.

On the other end of the spectrum, the "bad value" list will include principal-protected notes (PPNs) for the third year running, government bonds, CEO bonuses, federal elections and Mats Sundin.

Of all my 2009 predictions, there are only two I'm totally sure of. Investment returns will be better than this year, and it's great to be Canadian.