Ohio Professor Predicted Stock Market Plunge


The Wall Street plunge has not come as a surprise to a Baldwin-Wallace University finance professor, who developed a stock marketing modeling program to predict future trends. 


On Thursday, Dr. Kevin Jacques (Jakes) published an article on the finance investment website "Seeking Alpha", revealing that the probability of the S&P 500 tumbling 5% or more by the end of February, had risen to over 19%.  Dr. Jacques' Monte Carlo Simulation Model, indicated we were facing the highest estimated probability of a market slump in over 2 years. 


The Dow Jones Industrial Average's Monday free-fall now includes its largest single-day drop in history. The Dow lost 1075 points, about four-and-a-half percent of its value Monday.  The point drop shattered the previous record of 778 points lost in September of 2008, but the percentage loss isn't close to the all-time record of 22-percent in October of 1987.


Jacques believes we could experience more volatility this month, in both directions, and the market might end February down about 10 percent. However, he contends it's all a normal function of how stocks behave, and investors who don't panic and have a long term outlook will do fine.

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