Author Archives:

Two Things About this Stock Market That Are Inevitable

The first is that a lot of damage has been inflicted on technical analysis by the numerous V-shaped bottoms and the number of technical traders has diminished. The second is that this market has created the illusion that passive investing is the … Continue reading

Posted in Market Statistics | Tagged , , | Comments Off

Dumping Gold to Buy Equities Has Paid Handsomely

Some investors and funds decided to increase their gold holdings near the end of last year fearing a decline in stocks. Gold rallied as a result with GLD returning 14.6% by March 14 when the total return of SPY was near … Continue reading

Posted in ETF Analysis | Tagged | Comments Off

Borel’s Law and the Stock Market

A popular science interpretation of Borel’s Law is that phenomena with very low probabilities do not occur. Given that the rally in stocks has lasted for more than 5 years and the Fed promise to keep interest rates low for a long … Continue reading

Posted in Economic Analysis, Market Statistics | Tagged , | Comments Off

Correlation Between Stocks and Yields Does Not Point to a Correction

A major concern amongst investors at this point is whether the FED will change its low interest rate policy and some analysts attribute recent fluctuations in stock prices to it but the correlation chart below points to no major correction in stocks … Continue reading

Posted in Market Statistics | Tagged | Comments Off

Biotech ETF Takes the Lead From Real Estate ETF

After a drop of nearly 2% in the last two days in IYR reducing its YTD return to 18.47%, IBB has taken the lead with a YTD performance of 21.04%. TLT follows with a YTD of 15.14% and QQQ is … Continue reading

Posted in ETF Analysis | Tagged , | Comments Off

Statistics and Lessons From the Last Three S&P 500 Uptrends

The coin is biased towards heads. The statistics indicate that the last three uptrends in S&P 500 were the result of a small structural bias in the order of +6%. This bias may continue in the absence of adverse developments. Share

Posted in Market Statistics | Tagged , , , | Comments Off

The Gloomy Fate of the Bayesian Passive Investor

One fundamental assumption of Bayesian statistics is that the future will behave as the past. Bayesian passive investors, defined in this blog as investors who, given new evidence, believe that the market will continue to go up for a long time, … Continue reading

Posted in Market Statistics | Tagged , | Comments Off