David Kostin

David Kostin: First, the bad news. Theres a good chance the U.S. stock market will see a 10 percent drop sometime during the next 12 months. Well, as far as precision goes, good chance is not good enough for a quant like Kostin, so he gives an exact probability: 67 percent odds of a 10 percent retreat from a peak in the next 12 months, according to Business Week. Now for the good news, if you can call it that: He still expects the market to end the year higher, though not by much. Kostin is sticking with his year-end SaP 500 forecast of 1,900, according to a note to clients dated yesterday. That implies a gain of less than 2.8 percent for the year and less than 3 percent from yesterdays close. In other words, a relatively flat market given the ferocity of the gains seen in this bull run and Goldman Sachs Group Inc.s David Kostin has some good news, and some bad news. Though quant work can be complicated, his rationale is actually quite simple -- the market has gone way too long without a so-called correction, or a drop of at least 10 percent from a peak. The biggest declines from highs this year and last year were about 6 percent, and its been 22 months since the Standard a Poors 500 Index SPX saw a 10 percent drop. Mix in a little fancy math, and Kostin ends up with 67 percent odds we ll see a correction in the next 12 months. (news.financializer.com). As reported in the news.