I was cleaning this weekend and came across a 2004 article from the chair in Active Trader on survival stats. It seems appropriated given the equity market decline. Separately, it looks a little like 1998 and the "Asian Contagion." Separately, in thinking about the Chinese market giving up all its YTD gains, that is consistent with 1929 and 1987 but the next day there is a really big rally.

Using the Dow Jones Index, if today's YTD change is less than zero then buy tomorrow, it has 84% odds of being a winner. Bear markets generally start down and go down more. Winners tend to bounce back from bad beats while bearish (loosing years) just fold up and come back and try again next year.

Separately, here is a link to my white paper on surviving this financial no man's land at the zero bound. Momentum breaks are signs of switches.

"Surviving Financial No-Man's Land Surviving Financial No-Man's Land: Broken Models & Interest Rates at Ground Zero"

A White Paper by: Allen R. Gillespie, CFA


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