Dead cats bouncing—statistically speaking

I know that I learned in college that even if you've just flipped a coin 10 times and it came out heads each time, the next time you flip, it still has a 50-50 or 50% chance of being heads again. My gut refuses that logic and wants to believe it's something like a 90% chance it will be tails. It's as if I started out saying, what are the chances of getting heads 11 times in a row. That likelihood is only 0.05%. So my gut wants to believe it's even 99.5% chance it will be tails next.

At the HDMA On Highway Dialogue, some of us just listened to really good economists, like the economist for the Federal Reserve, and people from well respected research organizations for trucking. We saw convincing evidence that, even though we've not had a recession in 7 years, there's no more likelihood of a recession next year than in the first year after the last recession. Statistically speaking. We saw some good evidence of how the downturn in truck sales this year is a harbinger of recessions in 6 months to 2 years.

In fact, I learned a new financial term, "dead cat bounce." That's when the market or the economy goes down, then levels off for a while, before it goes down again. If we're lucky, what we are seeing now will not be a dead cat bounce, the harbinger of a recession, but the low point before things go up.

The stock market Thursday, November 10, sure makes it look promising that this is a local minimum and not a dead cat bouncing—statistically speaking.

TAGS: News
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