Short Europe and BRICs, Buy Hershey for New Year

The past three presidential election years have been very hard on risky assets,
and two of them were completely brutal. The most recent was 2008, and if you
dont remember the global financial crisis that occurred that year, you were
either too young, drunk or in jail. The one before that, 2004, ended with a 9%
gain but was flat or down for three quarters of the span. And the one before
that, 2000, featured the bursting of the technology bubble, with the Nasdaq 100
collapsing by 40%. So its no wonder that I am looking at the coming election
year, 2012, with a jaundiced eye. My mostly skeptical outlook is not way out of
consensus, but most surveys show that the majority of investors are either
neutral or mildly bullish expecting a rebound from the 2011 quagmire as the
U.S. economy slowly recovers, the Europeans find a solution to their credit
troubles and emerging markets fulfill their destiny as growth engines that can
charge higher even if the West falters. To find consistent success as an
investor, it usually pays to have a variant perception. That is to say, a view
that is outside consensus by at least a stones throw which the consensus will
eventually arrive at. So in the current environment, it wont work to be neutral
or mildly bullish. You either need to be very positive, arguing that all the
pessimism of late is completely misguided and that stocks will roar forward over
the next year as the economy improves more than expected Or you need to be very
negative, arguing that the majority of investors do not yet recognize the world
of hurt that lies ahead and that stocks will be sold hard as earnings
deteriorate. My own view splits the difference a little. My research suggests
that the majority of investors underestimate the trouble that lies ahead for
Europe as it enters a deep