Seabreeze Partners head Doug Kass predicts a NYSE cyberattack that halts trading and travel for a week.
He recommends that investors keep “a nice amount of cash” in their portfolios to protect themselves when this happens.
“The Internet becomes the tactical nuke of the digital age,” Kass told CNBC. “I believe cybercrime is going to explode exponentially next year as the web is invaded by hackers.”
”I think we see a specific attack on the NYSE,” he told CNBC. “The aftermath will have a profound impact and cause a weeklong hiatus in trading as well as a slowdown in travel,” he said.
Kass also believes the market has topped and that political gridlock in Washington will deter fiscal solutions from happening.
Kass sees the Obama administration continuing to “endorse a series of populist regulatory changes,” one of which will be an assault by the Securities and Exchange Commission on the 12b-1 fees mutual funds now charge to cover their marketing costs.
As a corollary to that prediction, Kass expects that T. Rowe Price and Franklin Resources will be “two of the worst-performing stocks in 2011.”
The Wall Street Journal reports that the mutual-fund industry is firmly opposed securities regulators' efforts to change and cap certain fees now charged to some fund investors.
Current SEC plans include overhauling the 12b-1 fees, renaming them "marketing and service fees" and limiting their charges to 0.25 percent of assets. Capping continuing sales charges and allowing brokerage firms to set their own front-end sales charges are two other proposed changes.
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