Fun with numerology
#1
Posted 27 July 2007 - 10:43 PM
Defenders of the status quo are always stronger than reformers seeking change,
UNTIL the status quo self-destructs from its own corruption, and the reformers are free to build on its ashes.
#2
Posted 27 July 2007 - 10:53 PM
"In order to master the markets, you must first master yourself" ... JP Morgan
"Most people lose money because they cannot admit they are wrong"... Martin Armstrong
http://marketvisions.blogspot.com/
#3
Posted 27 July 2007 - 11:20 PM
I have no background in finance or economics. Nevertheless, years ago I remember reading that the great financial panics of
the 18th century were: 1819,1837,1857,1873,1893.
Odd; these were five 18th century years and all 10 were odd numbers, ie 19,37,57,73,93.
I then listed all the beginning years of acknowleged panics (later called recessions) in the last two centuries that I could find:
1819 -- 1901 -- 2001
1833 -- 1903
1837 -- 1907
1857 -- 1910
1869 -- 1913
1873 -- 1920
1884 -- 1929
1890 -- 1937
1893 -- 1948
1896 -- 1953
--------1957
------- 1960
------- 1969
------- 1973
------- 1980
------- 1981
------- 1990
Then I grouped them according to the last number of the year.
# of recession events starting in years ending with number:
0 - 6
1 - 3
2 - 0
3 - 7
4 - 1
5 - 0
6 - 1
7 - 5
8 - 1
9 - 4
28 recession events
Now divide them into favorable and unfavorable years.
FAVORABLE YEARS (only 0 or 1 recession event)
2,4,5,6,8
UNFAVORABLE YEARS (18 total recession events in just three years)
0,3,7
I then had calculated a 7% chance that 2 years would have no recession events, and
a 1% chance that 18 of the 28 recession events would occur in just 3 years.
Next we move to the STOCK MARKET. Understand that Nobel laureate Paul Samuelson once said something to the effect that
"the stock market had forecast 9 of the last 5 recessions." Also, note that the stock market crashed in 1987, but there was no recession.
The correlation with the economy is not strong.
There is a well-known, but controversial 10 year (decennial) pattern in the stock market.
The following table is a version of the 10-year stock market DOW cycle from 1881-2004..
(Note that the DOW was down in 2005, but broader market averages like the S&P500 and NYSE Composite were up)
---Year ending in -- 0 -- 1 -- 2 -- 3 -- 4 -- 5 --- 6 -- 7 -- 8 --- 9
---Up Years ---- -- 4 -- 7 -- 7 -- 6 -- 8 -- 12 -- 7 -- 6 -- 10 -- 9
---Down Years -- --8 -- 4 -- 6 -- 7 -- 5 --- 0 -- 5 -- 6 --- 2 ---3
DOW % changes 1881-2004
----Year ending in - 0 --- 1 --- 2 ---- 3 ---- 4 ----- 5 ---- 6 ----- 7 ---- 8 ------- 9
Total % Change** -86% 0% 23% 66% 91% 368% 71% -38% 221% 110%
FAVORABLE YEARS (Best % gain years )
5,8,9
UNFAVORABLE YEARS ( Worst % gain years)
0,7
Now let's combine the years with favorable economic or stock market results --
FAVORABLE
2,4,5,6,8,9
UNFAVORABLE
0,3,7
Here comes the amazing part. Now take these last numbers of the years and consider them as first numbers of decades:
FAVORABLE
1920's
1940's
1950's
1960's
1980's
1990's
These decades were all good to great decades for the economy.
UNFAVORABLE
1900's
1930's
1970's
These decades were all very poor to horrible decades for the economy.
#4
Posted 27 July 2007 - 11:39 PM
#5
Posted 27 July 2007 - 11:47 PM
That is pretty cool stuff. Nonetheless, we are in a 00's decade and things are OK so far, although it did start with a dot.bomb recession
Yes. It's getting late for this decade.
The 2010 decade may turn out to be the nightmare decade.
Defenders of the status quo are always stronger than reformers seeking change,
UNTIL the status quo self-destructs from its own corruption, and the reformers are free to build on its ashes.
#6
Posted 28 July 2007 - 02:09 PM
"In order to master the markets, you must first master yourself" ... JP Morgan
"Most people lose money because they cannot admit they are wrong"... Martin Armstrong
http://marketvisions.blogspot.com/