Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Justa Werkenstiff who wrote (9575)	10/31/1999 12:22:00 PM
From: Allan Harris	Read Replies (2) \| Respond to of 15132

But let's spin the wheel for the next economic number. I thought you would never ask: Dow 100,000: Fact or Fiction by Charles W. Kadlec NY Institute of Finance September, 1999 Reviews Amazon.com Any number of magazine articles, and even a few books, will tell you that the U.S. stock market in the late 1990s was a dangerous bubble. No one could say when the crash was coming, but a lot of people believed it was just around the next big economic curve. Kadlec, chief investment strategist for Seligman Advisors Inc., has a different point of view: sure, bad things will happen now and then, but ultimately the Dow Jones Industrial Average will end up at 100,000 in the year 2020. In other words, "two decades of above-average economic growth with price stability." This, he notes, represents only an 11.1 percent annual increase in the stocks' value, which, he believes, is entirely realistic. So how does Kadlec actually get to 100,000? First, he shoots down comparisons to previous periods of boom and bust. The cold war is over, he notes, which represents a new political paradigm. Then there's the oft-discussed drive of the baby boomers to retire in style. And, of course, there's technology, presenting new ways for workers to be more productive and resourceful. Kadlec also sees the worldwide trend toward freedom and democracy as a powerful economic force, as is the need for governments to compete with each other for economic activity. But he cautions that the prosperity he predicts isn't guaranteed: wars (either with bombs or tariffs) could end it pretty quickly. So could terrorism or higher taxes. (He includes some nifty illustrations showing how tax increases on rich people inevitably sock middle-income and poor people harder.) And a currency shock could cause untold economic mayhem. Kadlec notes that even he was surprised by his conclusion that the Dow should travel to this nosebleed height. But if he's right--well, let's just say a lot of investors are going to have very comfortable retirements. A