>>I believe we get one more leg in this wondrous bull, through about 2008 or 2009<<
AC, are you not at all worried about the DOW 10,000 curse?...
Next, what about the possible curse of the logarithmic numbers: 100, 1000, 10,000?
The following statistics come from a thought provoking article by Peter Eliades (always one of my favorite financial writers) in the March 22, 1999 Barrons article, "Nasty Numbers".
The DOW first breached 100 on January 12, 1906. It took nearly 19 years to get significantly past it. Nineteen years!
In between, the DOW declined 48.5 percent to a November, 1907 low, came back in 1909 and hovered there until 1912 when it slid down 30 percent by 1914. In November, 1916 it was 110 then it declined 40 percent in 13 months. In November, 1919, it was 119.62. By 1921 it was off 46.6 percent. Finally, a bull market began in 1924 that carried it to 381.17 on September 3, 1929. We all know what happened at that point. Ouch!
In January, 1966 the DOW broke 1000 intra-day. Then it declined 26 percent. By December, 1968 it hit 994.65. From that point to October, 1974, the average share price declined 75 percent. Ouch again! The DOW continued to flirt with level 1000 back and forth until August, 1982. That’s merely 16 years of going nowhere.
By the way, 1982 is when the headlines screamed, "Equities Are Dead" just before the greatest Bull Market in history! Is conventional wisdom always wrong?
On February 24, 1983, the DOW closed at 1121.81 and the greatest Bull Market in history was off and running. It had only taken 17 years to get through the 1000 barrier curse.
Will 10,000 prove to be a curse number? Did I forget to mention the possible effect of the Y2K problem? How do we cope with the possible consequence of terrible thoughts and nasty numbers?
One way is to utter those words that my hero, Sir John Templeton, said would be the most expensive words you will ever utter: "It’s Different This Time."
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