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To: Jing Qian who wrote (13753)	8/8/1999 9:28:00 AM
From: Mike Buckley	Read Replies (1) \| Respond to of 29970

They also predicted that DOW will reach 50,000 by 2005, and 100,000 by 2020. Let's put that in perspective. Assuming the Dow reaches those targets on today's date in those years, the first prediction results in a 29.3% average annual growth in a 6-year period. During the last 4 1/2 years (since Jan 1, 1995) the S&P 500 has had 25.4% annual growth. The second prediction results in an 11.2% average annual growth during a 21-year period. For decades, the S&P 500 has grown 10% - 11%. --Mike Buckley

To: Jing Qian who wrote (13753)	8/8/1999 1:34:00 PM
From: ahhaha	Read Replies (2) \| Respond to of 29970

No. We might make 15,000 DOW by 2005. It all depends upon how determined the FED is to maintain their imagined prosperity. If they persist with the current accommodation of inflation, we will be at 5,000 DOW in 2005. Prosperity rose from 1980 to 1995 because prosperity is built on how hard people must work. Then that work is harvested. The effect is inflation. First the most abstract values, stock prices, are inflated. Next the inflation moves into progressively less abstract entities until raw commodities are inflating. Finally wages inflate in a desperate attempt to apply monopoly power to get a share of the loot and to keep up with living expenses. At that point there is structural inflation which induces an attitude of the futility of working hard. In 1995 the first phase of declining prosperity began with rising stock prices. The accumulated value of work starts to be squandered. We are currently moving fully into phase two where housing and other less abstract things start inflating. Each of these phases overlaps the others and so stock prices are starting the long road down and commodity prices have bottomed. We have quite a long way to go until things get bad enough so that the attitudes will change back to fear for the future. As long as FED tries to maintain the appearances of prosperity the deterioration will be extended and so we may be starting on a 16 year sideways action for the DOW just like what occurred from 1965 until 1981. The stock market peaked out internally in 1965 which happens to coincide with the end of prosperity. Prices of the DOW inflated until 1969 while the internal state was deteriorating. This is similar to what has happened in 1997, 16 years after the internal bottom. This process is psychologically driven so it transcends anything technology can do, but it doesn't transcend what better psychology could do. That psychology is all built on how dumb the FED will be in trying to preserve prosperity rather than overtly breaking it just like the market would have done gently.