I’ve posted Entry #111 to my weekly Beyond Buy-and-Hold column at the Out of Your Rut site. It’s called Stock Cycles Are Real.
Juicy Excerpt: Alexander came up with a creative solution to the problem. Imagine that you engaged in a series of coin flips, noted the sequence of heads and tails obtained and then looked for signs of non-randomness. You would be surprised to see the pattern HTHTHTHT (with “H” representing “heads” and “T” representing “tails), THTHTHTH, TTHHTTHH or HHTTHHTT produced as the result of flipping eight coins in sequence. The probability of any of these patterns arising from eight random coin flips is 1 in 64. Alexander notes that: “A similar pattern in stock returns from sequential periods would also suggest non-randomness.”