Now that 2006 is ancient history, it's time to turn our Foolish eyes to the new year. I'm hoping for a rockin' good time over the next 12 months, but there are those out there who are already breaking out the violins.

"Satisfaction" by The Rolling Stones and the market participants
In a competitive market like the stock market, where there's a seller for every buyer, not everyone ends up satisfied. If the market heads up, bulls rejoice and bears growl. If the market tips downward, bears smile and bulls buck. Last year was one that most bulls should be satisfied with -- the seemingly unstoppable Dow broke through the 11,000 and 12,000 barriers to finish up 16.3%, and the S&P tacked on just less than 16%. Though the Nasdaq lagged the other two indices and was up approximately 9% for the year, it ended a healthy 20% above its mid-year lows.

So who's going to get the cookie in 2007? I think a column in today's Wall Street Journal titled "Perils of Prediction" put it well. Columnist Cynthia Crossen dug up some past predictions of what prognosticators thought the future would hold and showed how most of them were just plain wrong. Take, for instance, GM Vice President Charles Kettering's 1934 prediction that "it is not difficult to envision that in the future, the entire system of aerial transportation will be unaffected by fog and weather conditions in general" -- try telling that to my fellow United Airlines (NASDAQ:UAUA) passengers who had flights canceled due to the Denver blizzards. The prediction from the dean of Boston University's School of Medicine in 1912 that household equipment would be used to keep sleeping people "charged with electricity, thereby warding off many of the ills and aches that flesh has hitherto been heir to" is likewise off the mark.

These are all long-term forecasts, but consistently correct short-term predictions, especially when it comes to the stock market, are also notoriously tough to come by. So what's the Foolish investor to do? Keeping a long-term perspective and investing in companies with strong businesses, good fundamentals, and reasonable prices make it pretty tough to lose.

"Hit the Road, Jack" by Ray Charles and Home Depot's board of directors
Last week, home-improvement retailer Home Depot (NYSE:HD) announced that chairman and CEO Bob Nardelli will be stepping down from his post at the top. Nardelli's resignation came amidst a good deal of negativity around the executive, stemming from increasing competition from Lowe's (NYSE:LOW), poor stock price performance, high executive pay, and a perceived lack of transparency for investors.

While a falling share price rarely makes a CEO particularly popular with shareholders, Nardelli managed to ignite a particular uproar earlier this year at the company's annual shareholder meeting. Nardelli -- the only board member who attended the meeting -- was seen as particularly laconic while there, and he refused to answer questions about his high pay over the previous five years. Though efforts were made to quell the critics following the meeting, it appears to have been too little, too late. Criticism has been further stoked in his departure, as Nardelli stands to collect on a whopping $210 million severance package that includes a cash payment of $20 million, accelerated vesting of $77 million of deferred stock awards, and retirement benefits of $32 million.

Nardelli, a descendent of the Jack Welch management boot camp known as General Electric, was passed over for the top spot at GE when Welch named Jeff Immelt as his successor. He will be replaced at Home Depot by the company's executive vice president of business development and corporate operations, Frank Blake. Blake came to Home Depot in 2002 after spending just less than a year as the deputy secretary of energy. Prior to that, Blake served as a senior vice president at GE. Like Nardelli, Blake has no retail background to bring to the table, so it's questionable what Blake may be able to offer strategically that Nardelli didn't. Learning from his predecessor's failings and making changes, such as structuring a reasonable pay package and treating shareholders as the owners of the business, could be a great first step, though.

"What Hurts the Most" by Rascal Flatts and U.S. Retailers
Last Thursday's announcement of same-store sales increases for the month of December definitely hurt for U.S. retailers. Overall, same-store sales increased 3.1% in December, down from a 3.5% increase in 2005, but in line with analysts' expectations.

Some companies, such as Sharper Image (NASDAQ:SHRP) and Gap (NYSE:GPS), can't seem to help but disappoint. Meanwhile, others, including Limited Brands (NYSE:LTD) and BJ's Wholesale Club (NYSE:BJ), saw higher same-store sales, but weren't able to meet the market's expectations. It wasn't all doom and gloom, though, as some retailers -- including Nordstrom (NYSE:JWN) and Gymboree (NASDAQ:GYMB), which grew same-store sales a sweet 15% -- can attest.

These results could suggest that consumer sentiment has started to soften and U.S. spendthrifts are starting to tighten the purse strings. However, the growing sales of gift cards, as well as the increase in shopping done on the Internet, could have had an impact as well. Sales of gift cards are not recorded as revenue for a retailer until the recipient comes back to the store to use the card, while online sales are not counted toward same-store sales numbers.

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Fool contributor Matt Koppenheffer gets his satisfaction from participating in The Motley Fool's CAPS service, where he is currently ranked 2,834 out of 19,511. He does not own shares of any of the companies mentioned. Home Depot is an Inside Value pick. Limited Brands is an Income Investor selection. The Fool's disclosure policy is always extremely satisfying.