Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: Alex MG who wrote (16069)	2/5/2003 10:46:28 AM
From: macavity	Read Replies (1) \| Respond to of 19219

Probability. I always laugh at this 3 yr 4 yr thing. The probability that people should be looking at is not The probability of 4 down years - p(4Down) But should be The probability of 4 down years, given that we have already had three of them - p(4Down\|3Down) Now technically there is actually not enough information for this to be calculated, but the number of 4 year down periods in the last 100 or 200 years is not the answer. If we consider the 2 following N(3 down years) - Number of only 3 down periods in sample N(3+ down years) - Number of more than 3 down periods in sample probability ~ N(3+ down years)/{N(3 down years)+ N(3+ down years)} => both probabilities are actually small. The (Baynesian) conditional probability is actually a lot larger than people intuitively think. -macavity

To: Alex MG who wrote (16069)	2/5/2003 12:21:22 PM
From: Terry Whitman	Read Replies (1) \| Respond to of 19219

That could be determined, statistically. I'd say the odds are similar. Probably about 10-1. >we weren't supposed to have three down years in a row in the markets, surely we can't have a fourth???... < The odds of 3 down years in a row are much better than 4 in a row, no doubt. Probably between 3-1 & 4-1. So the bears beat the odds on that one. And, sure they COULD beat the odds again. I'm just saying that probability is actually quite LOW. Not HIGH, as you are suggesting. I don't think we have a large enough sample of 11+ rate cuts to figure any probabilities on that- I think it has only happened once or twice.