Category Archives: Market Statistics

Selective Perception

Good out-of-sample results of a unique hypothesis may impress me but not naive statistics that demonstrate selective perception bias. Here is a recent example.

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Why Does It Feel Like Summer In The Stock Market?

Someone I follow in Twitter made a comment yesterday that recent market activity is similar to that observed during summer months. Below I include some – mostly useless – statistics and the possible reasons for the subdued action.

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Charts Can Make Pain Look Like Gain

Charts can impose many illusions besides the formation of regular patterns. One of the most serious is the illusion of high buy and hold returns. The stock of Microsoft is a good example: $10,000 invested in IPO would now worth … Continue reading

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Dow Jones Should Be At 30000

The mainstream financial media recently compared the 18 year period it took for Dow Jones to grow from 10,000 to 20,000 to the 85 or so years it took for a ¬†rise from about 60 to 10,000 and argued that … Continue reading

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Dow Jones 20K Reveals Major Misunderstandings

Articles in mainstream financial media compare the Dow Jones rise to 10,000 that took about 103 years to the rise from that level to 20,000 alluding to easier milestones. These articles confuse absolute changes with growth rates.

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The Market Is The Best Casino

Even if the stock market is a casino, as some believe, it nevertheless offers very high odds to participants. As the simulations below show, the stock market has been very generous to the majority of traders who know how to … Continue reading

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DJIA Amazing Persistence

The Dow Jones Industrial Average has made a high within 0.5% of the 20,000 level 21 times in the last 28 trading days. This is amazing persistence. Will this persistence be rewarded and what could it mean for the broader … Continue reading

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Short-Term Volatility Could Increase

Short-term volatility has decreased significantly in the first 13 trading days of this year, as shown in the chart below. Volatility could increase in the short-term but there is nothing to guarantee that.

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