From: John Conover <john@email.johncon.com>
Subject: Re: forwarded message from Spirit Of Truth Page
Date: Sat, 31 Jan 1998 09:48:40 -0800
And, how has it turned out so far? So far, so good. Have to wait and
see how the year turns out ...
John
> John Conover writes:
> >
> > The attached is more Domesday prognostications from the macroeconomics
> > community. The attempt utilized is to establish some sense of
> > credibility for such prognostications through a consensus of media
> > reports. Not being daunted by the selective democratic polling of a
> > the members of a profession which is founded on inductive reasoning,
> > (ie., statistics,) I worked my way through the numbers:
> >
> .
> .
> .
>
> >
> > How about the probability of 1998 ushering in a sustained bear market
> > lasting at least 25 years, (as from 1930-1955, ie., a great depression
> > starting again?) 20%. (20% sounds almost eminent, huh? Well, not
> > exactly. There is also a 27% chance that the "bull" market that
> > started in 1984 will continue through 1998. There is, also, an 11%
> > chance that the current very "bull" market, that started in 1992 will
> > continue through 1998.)
> >
> > I just received some email requesting an assessment of the probability
> > of at least the following decade, starting 1 January 1998, being
> > "bear" or "bull."
> >
>
> The probability that the decade would be bear/bull is 50%/50%, almost
> exactly.
>
> So, starting with 12 January, 1998, the probabilities stack up as
> follows:
>
> Chances of at least a quarter century "bear" equity market: 20%.
>
> Chances of at least a one decade "bear" equity market: 50%.
>
> Chances of at least a one year "bear" equity market: 62%.
>
> Chances of at least a month "bear" equity market: 41%.
>
There was a 59% chance of a "bull" month. It was-barely. (NASDAQ,
Up. DJIA, up. NYSE, Jan 1 = 511.19, Jan 30 = 510.63, call it
neutral-maybe slightly "bear." S&P, Up.)
>
> Chances of at least a week "bear" equity market: 29%.
>
There was a 71% chance of a "bull" week. It was, for all indices.
>
> Chances of at least a day "bear" equity market: 45%.
>
There was a 55% chance of a "bull" day. It was, for all indices.
>
> John
>
> BTW, note that these probabilities only apply to 1 January 1998, and
> will be different for any other day/week/month/year/decade in the
> quarter century. Note also that the probabilities change over time.
> For example, the probability that the decade starting 1 January 1978
> would be "bear" was only 29%, (ie., a 71% chance that it would be
> "bull," which it turned out to be.) Note, also, that the
> probabilities are dependent on the time scale-although there is a
> likelihood that the quarter century will turn out to be "bull," which
> days in the quarter century will be "bull," (or "bear,") can only be
> forecast a few days in advance. Likewise for the weeks/months/years.
>
> As an interpretation of the probabilities for the US equity markets,
> beginning on 12 January, 1998, the near short term is somewhat
> optimistic, changing to optimistic for the week, and somewhat
> optimistic on the outcome of the month, but pessimistic on the year,
> neutral on the decade, and optimistic on the quarter century.
>
--
John Conover, john@email.johncon.com, http://www.johncon.com/