Dow to hit 20,000!

[LightningDawg]

10 Reasons the Dow Will Hit 20,000 - SmartMoney.com


What do you guys think of this article? Are his points legitimate?

 

[Webzter]

I had to look at the date of the article to see if you were posting one from 2007

 

[ronocnikral]

my magic 8 ball says "maybe"

 

[ziggy29]

Some of these points are legitimate, I think, in terms of upward forces on stock prices, but I think it ignores too many of the sources of current uncertainty (which is, of course, the worst thing for the market, even worse than known bad news).

 

[WB52]

Thanks for posting that article. After five straight weeks of declines in the s&p, I was starting too feel nervous and grumpy. I know that my time horizon should be measured in years, not weeks. But still...
It was refreshing to see some points that support a longer term view of why the markets will continue to build value.

 

[DblDoc]

I agree with the 20,000, not sure about the 12-18months though. Doesn't change my investing plan.

DD

 

[W2R]

10 Reasons the Dow Will Hit 20,000 - SmartMoney.com


What do you guys think of this article? Are his points legitimate?

Even I am not THAT optimistic! Maybe some day. Anything imaginable might happen eventually, given infinite time.

Still, I don't think 12-18 months is a realistic timeframe for his prediction. If he is right, I'll eat my words all the way to the bank.

 

[Running_Man]

MR Altucher is an ultra bull, made this call on CNBC - he is/was a hedge fund blogger for Street.com . He is a source for some interesting ideas, but he will always to refuse to acknowledge anything other than buying stocks now as they are going to rise huge. Makes him a nice chunk of change tho...

YouTube - ‪CNBC's Million Dollar Portfolio Challenge 3/23/2007 Part 1‬‏

Company was bankrupt within a year.

-FREMONT GENERAL ANNOUNCES THAT, IN CONNECTION WITH ONGOING REVIEWS AND | Reuters

 

[Gone4Good]

. . . someday.

12-18 months? Not a freaking chance.

Most of his points are complete BS (like #7 where he casually assumes a 33% increase in trailing P/E multiples, because, 'you know, the Fed.' Which I guess is somehow different from #1 'the Fed' and #3 'the Fed') but #10 is the best . . . "Follow me on Twitter."

 

[Ed_The_Gypsy]

Sure. But the dollar will have collapsed to half its present value.

 

[haha]

Altucher is kind of an investment world comedian. He was great leading up to the 2008 crash. Aaron Task would interview him on Yahoo, and everything he said was always100% wrong. Just as useful as 100% right, which we all know is much harder to achieve.

He is never unsure about anything. Have you ever seen the guy? He needs a better barber, or maybe a razor to shave his head.

Ha

 

[donheff]

Ahhh. That felt good.

 

[frank]

maybe the dow will go to 20,000, but it will still be only 10k in todays dollars. when the dollar is as cheap as it is getting to be, every stock will look rosey until another 3000 point drop to make you remember.

 

[Gatordoc50]

10 Reasons the Dow Will Hit 20,000 - SmartMoney.com

What do you guys think of this article? Are his points legitimate?

Such is the difficulty in stock valuations. Whether using supply/demand or dividend growth or P/E ratios. Since the Fed is using a Keynesian approach to fiscal policy I think it is appropriate to consider Keynes view of the stock exchanges. And that is they are merely a convention to provide liquidity that is effective until it isn't. He didn't use the term Ponzi scheme but it's pretty much what he describes. Hopefully the Ponzi continues!

 

[braumeister]

That would be 20,000 Celsius, right?

 

[Nemo2]

That would be 20,000 Celsius, right?

 

[Gone4Good]

Since the Fed is using a Keynesian approach to fiscal policy

Oh my.

 

[Independent]

I've never heard of the guy, but this seems likely

Altucher is kind of an investment world comedian.

Looking at Shiller's data, an S&P 2,000 (roughly a Dow 20,000) would require trailing 10 year P/E's over 30. We saw that in 1929, and again in 1997-2001.

He didn't label his 10 reasons "Why we're headed into another stock bubble".

 

[TromboneAl]

Article summary: Whee!

 

[M Paquette]

Originally Posted by Gatordoc50
Since the Fed is using a Keynesian approach to fiscal policy

Oh my.

Indeed. Pesky Keynesians and related modern neoclassic economists tend to do things like measure, analyze, and try to formulate quantitative results. I don't know why an organization managing monetary policy would be interested in something like that.
(BTW, the Fed handles monetary policy. Congress handles fiscal policy, such as it is, and sets mandates for the Fed's goals in monetary policy.)

I've always found a strict Austrian school interpretation to be much more entertaining. The Austrian school leans toward strict methodological individualism, treating all economic actors as efficient and logical individual agents, and deriving economic theory as a logical extension of basic principles of human action. They would have loved Star Trek's Mr. Spock. (For similar reasons, the Austrian school of economics is much loved in libertarian political circles.)

The Austrian school's focus on logical human actors leads to some interesting bits in their economic philosophy.

• Testability of economic hypothesis is virtually impossible, since attempting to measure the responses of human actors alters their actions.
• Since an Austrian economic hypothesis is not testable, the Austrian school relies on the power of deduction and a priori reasoning. This puts the school well outside the realm of science, which is founded on testable hypothesis.
• Econometrics and mathematical analysis, being based on mere empirical data and not derived as a logical extension of basic principles of human action, are rejected.

I'm not sure how useful an economic school that rejects quantitative analysis and measurement can be in the real world. It is amusing to see people using an economic philosophy that believes measurement and intervention are futile to argue points about measurement and intervention policy.


Samuelson, Paul A. (Sep 1964). "Theory and Realism: A Reply". The American Economic Review (American Economic Association): 736–739.

Caplan, Bryan. "Why I Am Not an Austrian Economist". George Mason University

 

[unclemick]

I waited a loooong time for the Saint's to make the Superbowl.

60/40 then. 60/40 now. Stay the course. Party on.

Whee!

heh heh heh - ok ok so my Target Retirement is changing the asset mix as the clock ticks - so hurry with the 20k. Oh and Geaux Saints. Do I have another thirty years to wait in either case?

 

[Midpack]

I am certain the Dow will hit 20,000. I just don't know if it will be in the next few years or after I'm dead in 33 ± 7.8 years.

 

[Gatordoc50]

Originally Posted by Gatordoc50 http://www.early-retirement.org/forums/f28/dow-to-hit-20-000-a-56405.html#post1076832
Since the Fed is using a Keynesian approach to fiscal policy

Indeed. Pesky Keynesians and related modern neoclassic economists tend to do things like measure, analyze, and try to formulate quantitative results. I don't know why an organization managing monetary policy would be interested in something like that.
(BTW, the Fed handles monetary policy. Congress handles fiscal policy, such as it is, and sets mandates for the Fed's goals in monetary policy.)

I've always found a strict Austrian school interpretation to be much more entertaining. The Austrian school leans toward strict methodological individualism, treating all economic actors as efficient and logical individual agents, and deriving economic theory as a logical extension of basic principles of human action. They would have loved Star Trek's Mr. Spock. (For similar reasons, the Austrian school of economics is much loved in libertarian political circles.)

The Austrian school's focus on logical human actors leads to some interesting bits in their economic philosophy.


[*]Testability of economic hypothesis is virtually impossible, since attempting to measure the responses of human actors alters their actions.
[*]Since an Austrian economic hypothesis is not testable, the Austrian school relies on the power of deduction and a priori reasoning. This puts the school well outside the realm of science, which is founded on testable hypothesis.
[*]Econometrics and mathematical analysis, being based on mere empirical data and not derived as a logical extension of basic principles of human action, are rejected.

I'm not sure how useful an economic school that rejects quantitative analysis and measurement can be in the real world. It is amusing to see people using an economic philosophy that believes measurement and intervention are futile to argue points about measurement and intervention policy.

Samuelson, Paul A. (Sep 1964). "Theory and Realism: A Reply". The American Economic Review (American Economic Association): 736–739.

Caplan, Bryan. "Why I Am Not an Austrian Economist". George Mason University

Yes, Congress handles fiscal policy. They determine how the money the Fed prints is spent. That is where the problem lies. I hear what you all are saying, that by the end of the year, all the Fed easing will come to fruition and we will be out of this mess. I'm looking forward to it. ( This is where I would roll my eyes if I were that type of guy, but I'm not).

 

[veremchuka]

I saw James on Kudlow and Company last night, this was discussed. I think he is crazy, talk about a perma bull! OTOH, we had the super bull mega trend from 1982 to 2000 then we entered a super bear mega trend to?. Maybe in 2 years we will be in the beginning of another super bull mega trend again, after all markets go up, markets go down. It would be nice but I'm learning to be a bit more skeptical about these things, after all I don't have another 30 years.

 

[SandsofTime]

Rubbish.