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Dow to hit 20,000!
Old 06-03-2011, 03:59 PM   #1
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Dow to hit 20,000!

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


What do you guys think of this article? Are his points legitimate?
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Old 06-03-2011, 04:17 PM   #2
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I had to look at the date of the article to see if you were posting one from 2007
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Old 06-03-2011, 04:21 PM   #3
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my magic 8 ball says "maybe"
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Old 06-03-2011, 04:23 PM   #4
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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).
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Old 06-03-2011, 04:50 PM   #5
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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.
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Old 06-03-2011, 05:05 PM   #6
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I agree with the 20,000, not sure about the 12-18months though. Doesn't change my investing plan.

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Old 06-03-2011, 05:41 PM   #7
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Originally Posted by LightningDawg View Post
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.
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Old 06-03-2011, 06:42 PM   #8
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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...



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Old 06-03-2011, 08:19 PM   #9
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. . . 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."
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Old 06-03-2011, 08:50 PM   #10
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Sure. But the dollar will have collapsed to half its present value.
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Old 06-04-2011, 01:02 AM   #11
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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.

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Old 06-04-2011, 06:29 AM   #12
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Ahhh. That felt good.
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Old 06-04-2011, 06:59 AM   #13
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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.
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Old 06-04-2011, 07:45 AM   #14
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Quote:
Originally Posted by LightningDawg
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!
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Old 06-04-2011, 08:01 AM   #15
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That would be 20,000 Celsius, right?
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Old 06-04-2011, 08:38 AM   #16
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That would be 20,000 Celsius, right?
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Old 06-04-2011, 09:45 AM   #17
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Since the Fed is using a Keynesian approach to fiscal policy
Oh my.
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Old 06-04-2011, 10:25 AM   #18
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I've never heard of the guy, but this seems likely

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Originally Posted by haha View Post
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".
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Old 06-04-2011, 10:40 AM   #19
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Article summary: Whee!
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Old 06-04-2011, 01:52 PM   #20
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Originally Posted by Gatordoc50
Since the Fed is using a Keynesian approach to fiscal policy

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Originally Posted by Gone4Good View Post
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
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