I’ve never enjoyed surprise lists that much.? The concept is this: name a bunch of things that you think there is a better than 2/3rds chance of occurring that the market seemingly has less than a 1/3rd probability on.? Here are my problems with the concept:

• First, the probabilities are squishy.? Who’s to say what the probability of a given event is?? Even if you have a prediction market going, those are subject to a variety of biases.
• ?Second, often the interpretation of whether one is correct or not is fuzzy as well.? Not all of the surprises are sharp events.
• Third, an unlikely event can be more likely than it seems if it is spread across multiple parties, or if there are multiple legs to the prediction.? As an example, a prediction that “a major country will drop its dollar peg in 2008,” should be regarded as a decent probability, if only by accident.
• Finally, I don’t find them easy to make money from.? Many of them are either not very actionable, or my relative payoff from being right versus wrong does not seem to compensate for the large number of times that the conventional wisdom proves correct.

All that said, surprise lists make for excellent journalistic copy because that have many “man bites dog” sound-bites.? That’s why we hear about them, and why they get promoted for publicity purposes.? But as for so many aspects of speaking/writing on investments, it is mostly theater, and shouldn’t be taken too seriously by serious investors.