This is the season when pundits feel compelled to make annual forecasts. I will make mine, as I traditionally do, in the first letter of January. But already we have seen a wide range of forecasted outcomes. Are we going to grow at 5-6% or at 1-2% or dip back into recession? Why such disparity? I think part of the reason is a basic disagreement on the nature of the just-lapsed recession. Today we explore that issue. Then I point you to a way to help those who are desperately in need and only wish they had our problems. For those interested, I enclose a picture of my new granddaughter.

And finally, I start the process of getting ready, after ten years, to actually buy some stocks. Yes, it is true. Am I throwing in the towel and becoming a bull, or do I just see an opportunity? Stay tuned.

I did a very interesting one-hour show this week with Tom Ashbrook on his National Public Radio syndicated radio show called On Point. About 20 minutes into the show, Professor Jeremy Siegel of Wharton came on, and we had a pleasant debate and lively Q and A with listeners. Jeremy of course was the bull, expecting that next year the US will grow by 5-6%. I was the "bear," expecting growth in the 1-2% range. You can listen in at http://www.onpointradio.org/2009/12/an-economic-warning. It's also available as a podcast on iTunes ("On Point with Tom Ashbrook") for a few more days.

I have liked Jeremy the times we have been on the same platform, and we have traded emails over the past few years. He is a consummate gentleman. He is also the author of Stocks for the Long Run. His thesis is buy and hold. Long-time readers know that I find such thinking to be wrong, if not dangerous. I believe that stocks go in long cycles (an average of 17 years) based on valuations, and that we are still in a long-term secular bear phase. I want to see valuations come way down before I suggest that the index-investing waters are once again safe. That day will come. Just not for a while.

This week we are going to depart from the usual format of surveying the economic landscape for investment insights, and ask ourselves:

"What type of returns should you expect from the stock market for the next 5, 10, or 20 years?"

Over the long-term the Ibbotson study, used by stock market cheerleaders everywhere, says we should expect to make real returns of 6-7%. This statistic is used by brokers and fund managers who urge investors to buy and hold. Maybe more to the sales point, it is used by them to urge investors to buy some more stocks or mutual fund shares today and hold them as well. If you just keep buying, the study says you will get your reward, by and by.

The news all seems so bleak sometimes. But is it? If my view that we are in a Muddle Through Economy is to prevail, then we surely must be seeing some good news somewhere. In this issue, I find some good news, some bad news and highlight a recent study which shows that the run in small cap stocks may be coming to an end. And much more, of course. Let's jump right in.

Time to put on our thinking caps. This is an important and seminal e-letter, as it will help form the basis and rationale for future investment suggestions. Rather than focus on where the market is going in the next two weeks, today we are going to try to get an idea over where the market is headed in the next ten years. Armed with that information, we can more logically structure our portfolios to take advantage of the prevailing winds.

I have not written in a week or so, as my daughter was out on vacation and I found I could not send an e-letter correctly. That will never happen again, as this old dog is going to learn a new trick or two.

One of my readers wrote that my last e-letter took a long time to reach the conclusion that I had no clue, but that he appreciated my honesty. I hope I can satisfy him today as I take a leap and take a position.

The Millennium Wave Investor Sentiment Index is 83, down somewhat
The Millennium Wave Sentiment Momentum Index is 42.25, still trending down
The Millennium Wave Sentiment Percentage Uptrends is 29.32, still leaping up!

The Millennium Wave Sector Model is still in Energy Services (RYVIX), with a small profit for a change, but after today, who knows? (comments below)

The Millennium Wave Investor Sentiment Index is a red-hot 84.4, trending up
The Millennium Wave Sentiment Momentum Index is 46.6, trending down
The Millennium Wave Sentiment Percentage Uptrends is 23.75, leaping up!

The Millennium Wave Sector Model has switched into the Rydex Internet fund (RYIIX)

Your outspoken analyst is back from DC and the inaugural shindig. While I was there, I went to Baltimore and met with the editors and publishers of The Fleet Street Letter. They asked me to be a contributing editor and I gladly accepted. The Editor, Lynn Carpenter, is a no-nonsense value oriented stock picker with a solid track record. I asked her if she would share a pick with us or so every month and she agreed to do so, so the Millennium Wave Investor Online is going to be even better! I have always been a big fan of Fleet Street, and am proud to be associated with them.

I will still write my letter as always, but of course, some time in the near future I will tell you how you can subscribe if you want that letter.