We expect Asian equities to be up 20-30% in 2011

We triangulate projected returns from three angles - a 2-3% monthly return (24-36% annualized) in periods with a strong Tape and easy policy, a 22% returnduring a MOMLI (leading economic indicator) upcycle, and a 37% return for Asian equities during year three in a US Presidential term. The probability of positive returns using these three approaches is above 70%.

David Fuller's view I am certainly not bearish as we head into 2011 but this is a best-case forecast in my opinion. My personal long-term strategy is to remain overweight Asian equities most of the time. However I am very concerned about the possibility for commodity price inflation next year.

While this remains an opportunity in commodity markets for the short to medium term, sharply higher prices - particularly for food and energy - would invite additional anti-inflation policies from governments, not least in the form of higher interest rates. This would lower GDP growth and corporate profits for many companies.