Friends at Stifel Nicholaus passed along the following observations from Richard Cripps, CIO at the firm.  The last year – to be sure – has shown us that the highly improbable has been uncharacteristically commonplace, but I still say it is alot more fun to hope.  I for one, am sick and tired of Black Swans.  Besides, if they happen too often, doesn’t that make them the new White?

As you probably know by now, the S&P 500 is below its level 10 years ago. In the next 15 months, the trailing 10-year S&P 500 will be comparing to the go-go period in 1999 (SPX +21.9%) and the first quarter of 2000 (SPX + 9.5%). The index would need a return of 64.2% by the end of March 2010 to have a positive trailing 10-year return — something that historical probability suggests is greater than 98% (see chart below). This return would be considered a near impossibility by many investors. However, consider that in the depth of the worst-ever market decline in 1933, the DJIA went-up 1.3 times its percentage decline in less than a year (DJIA -89%, +121%). The peak-to-trough decline in the DJIA is about 49%, and at 1.3x, the rebound would be 64%. Interesting.”  Richard Cripps, CIO.