Lucretius,
We have two things in common, but only two. We are both lawyers and a year ago, I believed what you apparently still do believe -- that the market had gone nuts and would return to "reason". But I don't believe that anymore. Let me respond to a couple of things you said:
don't be surprised when the Dow prints 2500 this year.
Thirty-three years ago, the Dow first rose to around 1,000 or a little less. At the time, many people made the same arguments (actually, I should call them statements, since you and I both know they are not arguments). So if we take a thirty-three year period and assume, based on about a century of history, that the Dow (in good times and bad, averaged together) would return about 12 percent a year, where "should" the Dow be 33 years after it was nearly a thousand? At 12 percent it would double every six years with compounding (setting aside the bizarre method by which the index is calculated), meaning that in 33 years it would double roughly five and a half times. That would make the 1,000 Dow rise to 48,000.
But it is only at 11,000-plus. By my reckoning, the market is way behind itself, not ahead. Especially with the Dow throwing out four godawful companies and adding four pretty good ones (Sears and Home Depot are as close to polar opposites as I can imagine), I expect that in five years the Dow will be at 25,000, not 2,500.
are you people completely off your rocker?
I have come to believe that one should only pose a question like that to others when one is comfortable about his own answer to the question.
MAD DOG |
