The great physicist Niels Bohr was the man who coined the phrase, "Never make forecasts, especially about the future." Yet economists and pundits seem reluctant to adopt the quantum-physics sage's wise words, so here we are again, at year's end, flooding our faithful readers with our forecasts for the next year, knowing full well that they're most unlikely to come true.

And here we are with our usual list of forecasts for 2006 (yes, the year that was) and how they panned out. Go ahead, laugh.

1. I wrote: "The year 2006 will be the global year for the Israeli economy. Because of the relative stability in local economic parameters, most of the shocks will come from the international markets."

We predicted that imbalance in the American economy, prices of commodities and oil, sustained growth in the technology business and influxes of capital to emerging markets would set the direction and pace of the Israeli economy.

Too bad we didn't stop there, because the year 2006 really was the global year for the Israeli economy, with record foreign investment.

Thing is, we went on and wrote, "During the first part of the year the massive flow of foreign capital to Israel will continue, as will the flow of Israeli money to the international markets. During the second half of the year, a nasty surprise in one of the markets could jolt stock exchanges around the world, and in Israel too."

We were not quite right: In practice, the jolt arrived in the first half, but it disappeared within three months and the second half was one of the best the financial markets have known.

2. "The U.S. federal deficit, the trade deficit, the decline in savings and the real estate bubble in the United States will continue to cast a shadow over the U.S. economy and the entire world during 2006. The global economy took all the forecasters by surprise during the last two years; the tremendous surpluses of money and the low interest rates prevented recession, and the surpluses of cheap merchandise from China pricked inflationary pressures and sharp interest rate hikes. But the high price of oil, the low savings in the U.S. and the dependence on cheap money are making the global economy and forex markets vulnerable."

So we wrote. Our forecast for the year 2006 was: "western investors, hungry for returns and disappointed with Wall Street's performance, will continue to increase the risk in their portfolios, and to send growing amounts of money to emerging markets and to global hedge funds, which could create the underlying conditions for the explosion of the next bubble."

We were right: During 2006, foreign investors sent record amounts of money to emerging markets and hedge funds. The result was that stock markets soared, sometimes by hundreds of percent.  As for creating the conditions for the next bubble to burst, next week we'll be publishing our forecasts for the year 2007. We may be rather less insistent.(Llama Peru?)

3. "Despite the elections and the political uncertainties, macroeconomic stability will be maintained because tax collection is increasing, the government is more or less maintaining its level of spending, and privatization is generating considerable income." Then we predicted: "Net fundraising by the government will be low and the main threat to short-term and long-term interest rates will come from the international markets."

We were right: The political uncertainty worsened, but tax collection continued to increase. We didn't know that half the surplus collection (compared with the treasury's forecast) would originate with one gigantic deal, in which Warren Buffett would cut a $4 billion check to buy 80% of Iscar. But we had the direction right.

In net terms, the government raised almost no money during 2006. the only reason the Bank of Israel governor lagged with interest rate cuts was his fear (which he overcame as the year ended) of lowering Israeli rates below international ones.

4. "After three years of high returns in almost all investment channels, it will be very hard to generate returns in 2006 without taking major risks. Indeed, the race by mutual and provident fund managers after high yields will tempt many to take on higher levels of risk than we are used to seeing."

Um. It was indeed tough to generate impressive yields as the year began, but actually the stock market boomed and most investment managers did well by their customers. We were right that the risk level in portfolios did rise to unusually high levels, but financial scandals simply did not materialize, and in any case the Finance Ministry is showing no signs of setting up an authority to supervise the capital market.

5. "The shock waves of the Bachar commission will continue well into 2006. Brokerages and provident and mutual funds will change hands, new partnerships and alliances will be forged and new foreign investors will come into the local market."

Right on the money: The speed at which the Bachar reforms were implemented were astonishing. The banks had been expected to drag their feet on selling their provident and mutual funds, but the moment they understood they'd lost that battle, they upped and sold them at sky-high prices to brokers, insurance companies and foreign investors.

The latter, however, not quite understanding the quality of the stuff they'd bought, watched and horror as money roared out of the funds. The same will happen with the provident funds they're buying in the years to come.

6. "The Internet bubble will come back with a roar in 2006. It won't be like the 2000 bubble, because this time there's real activity on the web, not only forecasts."

We didn't predict Google would pay $1.6 billion for YouTube, a website with 70 workers, but we did predict that "Internet" would be a comeback word on the business pages and that Google would stay the hottest company of the lot.

7. "Real estate prices in prime areas will rise after the seven lean years. For the first time in four years, the rally will reach the office space sector too. The first REITs will float on the Tel Aviv Stock Exchange, joining the flood of new instruments that will wash across the financial markets in the post-Bachar reform era."

Indeed, the price of real estate in prime areas did rise in 2006, as we predicted, and the offices market also posted a dramatic upswing. But because the dollar dropped against other currencies, the increase in residential properties was modest.

The dream of REITs did come true and did join the flood of new instruments,  most notably ETFs.

8. "The euphoric mood of 2000 will return to hi-tech. Demand for workers will rebound. The big Israeli tech companies, which had been afraid to use their cash, will start making major acquisitions of startups in Israel and abroad."

Euphoria is perhaps too strong a word. But for investors and entrepreneurs alike, and the workers of the 70 startups sold in 2006, 2006 was a terrific year. Big companies like Check Point Software Technologies (Nasdaq: CHKP) did start using their cash for acquisitions.

Altogether the Israeli companies listed on Wall Street bought a whopping 51 startups and companies for $3 billion.

9. "The local Israeli oligarchs, whose fortunes mushroomed in the last two years, will continue to tighten their grip over the local marketplace, to the dismay of many. The hi-tech millionaires will continue to multiply but won't make local investments in 2006 either. Again it will be Nochi Dankner, Yitzhak Tshuva, Lev Leviev, Dudi Wiessmen et al who pounce on every company offered  for sale."

True. Not one hi-tech millionaire bought a single company. Dankner, Tshuva, Leviev and this year Zadik Bino too, did, pouncing on every deal on the table, from Tnuva to shares in Bank Hapoalim.

10. As usual, we ended our forecasts with a warning: "On December 31, 2006, many forecasters will thank the Lord they had not bet their houses on their forecasts."

True. Very true. Forecasting is a dangerous art and our enthusiasm for writing forecast for the year 2007 is not great. But we will anyway. Stay tuned.

You're welcome to email me your own forecast, if it's clear and thoroughly thought out: guy.rolnik@themarker.com