In January of last year I laid out 12 unexpected events that were currently outside of the conventional consensus opinion that I felt had a reasonable chance of occurring (http://www.royalgazette.com/article/20120109/COLUMN05/701099993). Let’s go back and take a look at how these “surprises” panned out.1) Bermuda reinsurers rally over 20 percent. The Anchor Bermuda Insurance Index total return was 19.8 percent. I’d say that surprise worked. Reinsurers rallied as discounts to book value narrowed despite late year losses attributed to hurricane Sandy.Score: 1/122) Bermuda economy double dips. Unfortunately this looks like more than a double dip. The country’s 2011 GDP officially came in at negative 2.8 percent and we are forecasting that Bermuda’s economy slipped for a fourth year in a row in 2012, falling an additional 1.4 percent. We expect that once the final 2012 numbers are released, we will see continued weakness in construction, softness in retail and wholesale trade and a dip in hotel and restaurant growth.Score: 2/123) Despite a floundering economy, the BSX rallies 15 percent as the 60/40 rule is abolished for publicly listed companies. The 60/40 rule was abolished for certain sectors and the BSX Index did offer an 8.8 percent total return for the year. Remember, dear reader, in the short run economic performance does not equal stock market returns — valuation matters.Score: 3/124) The period of reunification commences. Cuba is liberalised and opened up to the United States as Raul reconciles. Kim Jong-Un (a Swiss-educated man who loves basketball) begins a long awaited unification with South Korea to open up the struggling North. It looks like we are well on our way to this. Raul has lifted many travel restrictions (you can fly from Miami to Cuba directly now) and Kim Jong-Un in a new year’s speech called on South Korea’s “anti-reunification forces” to “abandon their hostile policy against their fellow countrymen” and pursue “national reconciliation, unity, and reunification.” As I mentioned, my way to play this was through the Herzfeld Caribbean Basin Fund (Ticker: CUBA) which returned 22.1 percent for the year.Score: 4/125) S&P 500 approaches all-time high and rallies north of 1450. Confidence returns. Fear resides. Europe doesn’t implode. The S&P 500 hit a high of 1474 during 2012. Confidence, as measured by the Consumer Board Consumer Confidence Index, was marginally up on the year. Europe did not implode and, in fact, rallied substantially once the financial tail risk was removed with the European Central Bank’s Long-Term Refinancing Operations announcement. The S&P 500 returned 16 percent for the year.Score: 5/126) Financial shares in the US outperform. Boy did they ever! Large financials (as measured by the Financial Select Sector SPDR Fund) returned 28.5 percent for the year and the regional banks (as measured by the SPDR S&P Regional Banking ETF) returned 16.9 percent.Score: 6/127) Hong-Kong dollar rallies as the peg to US is adjusted upward. This didn’t happen, but I still think there is a good chance it will in the future.Score: 6/128) Gold stocks outperform the gold commodity. Squeezed by production issues and rising input costs, gold miners horribly underperformed the precious metal itself. Gold itself ended up 7.1 percent for the year while the miners fell 8.9 percent, creating a negative spread on this trade of 16 percent.Score: 6/129) Hedge funds underperform … again. The HFRX Global Hedge Fund Index returned 3.2 percent for the year. Meanwhile the MSCI World Index returned 15.6 percent. The positive spread on shorting hedge funds and going long equities banked a 12.4 percent return.Score: 7/1210) Chinese growth comes in slightly weaker than expected as fixed investment continues to cool. China’s growth model is questioned as the unsustainable rise in debt from bank lending is seen to be fuelled by capital misallocation. India’s economy slows considerably as its oppressive government bureaucracy puts sand in the gears of economic advancement. As a result of slower emerging market growth and weak developed market growth, commodities stagnate and post flattish gains for 2012. Crude struggles and eventually averages less than 2011 even in the face of Middle East tensions. China’s GDP is forecasted to fall from 9.3 percent to 7.7 percent in 2012. India’s growth looks like it fell from 7.5 percent in 2011 to 5.3 percent in 2012. Commodities, as measured by the Thomson Reuters/Jefferies CRB Commodity Index fell 3.4 percent for 2012. West Texas Intermediary Crude Oil fell seven percent for 2012.Score: 8/1211) Money shifts from bonds to equities. High quality corporate bonds and US Treasuries post slightly negative total returns for the year. Bonds continued to generate solid returns in 2012. Investment grade bonds (as measured by the iShares IBOXX Investment Grade Corporate Bond ETF) posted a gain of 10.6 percent for 2012. Treasuries (as measured by iShares Barclays 20+ Year Treasury ETF) posted a return of 2.6 percent for 2012.Score: 8/1212) Europe pulls together. Despite a very scary start and more domestic rioting in the peripheral countries, European leaders come to a more successful policy solution. The Eurozone recession is mild and European equity markets rally. Europe did manage to stay together and entered a mild recession in 2012. The large valuation discount that existed at the beginning of the year was narrowed throughout 2012 as policy decisions and resolutions managed to quell rampant fear. France rallied 24.4 percent for the year and Germany tacked on a very impressive 32.5 percent rally for 2012.Score: 9/12Overall 75 percent of forecasted surprises materialised in 2012, much higher than I would have anticipated.Next week I will present my “Surprises for 2013”. Thanks for reading.Nathan Kowlaski is the chief financial officer of Anchor Investment Management Ltd.Disclaimer: This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by Anchor Investment Management Ltd. to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. Past performance is no guarantee of future results. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. Investment involves risks. Readers should consult their financial advisors prior to any investment decision. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.