Byron Wien, vice chairman, Blackstone Advisory Services, the Wall Street and hedge fund veteran, is respected for his canny reading of markets and economic developments. As has become custom, Wien recently issued his list of the Top 10 Surprises for 2010. This is the 25th year Wien has outlined his predictions of a number of economic, financial market and political surprises for the New Year.

The tradition took root in 1986 when he was the Chief US Investment Strategist at Morgan Stanley. Wien, now 76-years old, joined The Blackstone Group as a senior advisor in September 2009 from Pequot Capital where he had been chief investment strategist since 2005.

“The real problem on Wall Street is that there is too much incremental thinking and this tries to get away from that,” Wien says in an interview. With the forecasts, Wien says he looks for genuine surprises that fly in the face of the accepted consensus. He also aims to have a degree of consistency among the surprises even though this increases the risk that the forecast surprises could go badly wrong.

“I’ve learned a lot about when consensus thinking is bound to be wrong,” he says. For example, in 2008 one of his surprises was that Barack Obama would win handily and that the Democrats would take 60 Senate seats. Though Hillary Clinton led polls by 15 percentage points in January, 2008 Wien believed that Obama’s collar on the youth vote presaged an eventual shift among the electorate at large.
Reviewing Wien’s 2009 list shows that many of his forecasts were on the money. He foresaw a second-half recovery in the US economy and a sharp rise in the S&P 500, which ended 2009 up over 23%. His other correct predictions included gold hitting $1,200 an ounce and oil returning to $80 per barrel, while the ten-year US Treasury yield (which rose from 2.24% to 3.84%) marginally undershot Wien’s forecast of a rise to 4%.