It is a New Year...and a New World.

But the view of most analysts and forecasters is that both look surprisingly like the Old World and the Old Year we just left.

We have been reading predictions and forecasts for the coming year. Almost without exception, the experts see a year coming that's not very different from the one that just went. The consensus view is that real estate will weaken in the nation's hottest markets...that stocks will be a decent, but not spectacular, place for investment...and that the economy will be okay, but not great. Oil, inflation and interest rates, too, are expected to be about the same in 2006 as they were in 2005.

Usually, the consensus view is right. That is not because the group of analysts and experts whose views are amalgamated to form the consensus is especially bright or perceptive. To the contrary, mostly numbskulls and poseurs shape the consensus view. These fellows can't really read tomorrow's headlines any sooner than the rest of us. Instead, their forecasting talent can be traced only to a lack of imagination; they cannot imagine that tomorrow will be much different from today. Since tomorrow usually is like today, they generally turn out to be correct.

If that were all there were to the story, you could make your investments based on the consensus view and you would be okay. But anytime you make a decision you have to consider not only the likelihood of the consequences...but also the gravity of them. You can cross the highway blindfolded. Most likely, the cars will see you and stop. But who would do such a thing? The gain is so marginal...and the potential loss so great.

Likewise, it may be true that in 2006, stocks will be alright and real estate will not be a disaster, but what are you likely to gain from them? And what is the risk that the consensus is wrong?

The trouble with investing along with the consensus is that there is little profit in it. You are merely going along with the great mass of lumpeninvestors; you are betting on the favorites. Stocks are still near all time highs, even though 2005 was a losing year for the Dow. And property? It depends on where you are.

In the nation as a whole, reports Paul Krugman in the New York Times, the cost of owning a home is still only 23.7% of income, not much different from where it has always been. But in the bubble areas on both coasts the cost of homeownership varies from 38% of income in New York to 42% in Miami to 55% in Los Angeles.

The consensus view is that these markets will soften, but not collapse. Yet, the last time the United States saw such expensive housing was in the late '70s - and then, they did collapse. In 1978, there were more than 2 million housing starts. Four years later, there were only half as many housing starts...and house prices were far below their peaks in many areas. But the damage was not limited to housing; the nation fell into the worst recession since that Great Depression of the '30s...with unemployment over 10%.

Today, investors and analysts look back at last year and the year before. They think they are looking forward as well as to the rear. They see no risk. They see no change. They think they can invest on yesterday's favorites for tomorrow's profits.

Alas, life is full of surprises. And it is the surprises that make money...or lose it. Who would have thought - in 1978 - that the rate of housing starts would be cut in half? Who would have thought, back then, that the 40-year trend towards higher rates of inflation and higher interest rates was soon to reverse? Who would have thought that housing would crash...and from the wreckage a new bull market in stocks would begin, taking the Dow from under 1,000 to over 10,000? Or, that a real estate bubble on both coasts would surge up just as the Dow finally began to lose momentum?

Who would think now that those trends, too, have exhausted themselves? Most years, investors can cross the road as blindfolded as consensus analysts. Most of the time, things work out one year as they did in the last. But at every turning point they get run down. We don't know what will happen in 2006. The consensus view may turn out to be right. But we see little profit in the consensus view...and much risk. More on 2006 tomorrow...

*** Vladimir Putin is choking Ukraine. Yesterday morning, Russia cut off gas exports to Ukraine after Ukraine refused to pay four times the 2005 rate for gas.

"Is there a better example of how vulnerable the world's supply of cheap energy is to geopolitical machinations? Well, not yet," says Dan Denning. "But there is the Strait of Hormuz, the Suez Canal, the refinery at Ras Tanura, and the Strait of Malacca."

"Yes, it's nice that it's happening in Russia and not Rhode Island. But don't think for one minute this is a huge geopolitical exercise in proof-of-concept. Energy is economic leverage. Energy is geopolitical leverage. Energy is also heat and light for people.

"The world's energy producers have leverage. The world's energy consumers don't. The tension between the two is playing out. It won't be pretty. But the nearly inevitable result will be higher energy prices, which is why energy is such a large element of my current recommendations.

Bill Bonner is the President of Agora Publishing.  For more on Bill Bonner, visit The Daily Reckoning.