Monday, 10 May 2021

Dow 36,000

In 1999, a book titled Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market was published.

Written by James Glassman and Kevin A. Hassett, the authors argued that stocks at that time were "significantly undervalued and concluded that there would be a fourfold market increase with the Dow Jones Industrial Average (DJIA) rising to 36,000 by 2002 or 2004."

It didn't happen. At the time of writing, the DJIA is above 35,000 for the first time and within touching distance of the 36,000 but almost two decades later than predicted. 

The authors put a little money where their mouths were by betting $1,000 (proceeds to charity) that the index would be closer to 36,000 than 10,000 in ten years and lost. 

They would have needed to wait until October 2017 to have won, but were perhaps a little unfortunate in timing, given that the book was published shortly before the dot-com bubble burst, with a further blow coming with the September 11 attacks of 2001.

The global recession of 2009 was the final nail in the coffin for the bet, but hopefully the royalties from the book covered their losses! 

While tidying up some files this weekend, I came across this article from MoneyWeek magazine of 24th January 2020 written by Bill Bonner. I'm glad I ignored the advice. 

At the time of the article, Tesla was priced at an adjusted $112.96 and while it did decline in March (along with just about every share) to around $70, it's now around $637, even if it is struggling today.

The point is not to believe everything you read, especially when people are paid to write rather than for being correct. 

Most bloggers are not paid to write, and last night I purged from my blog roll all those entries without a post in the past year. There are surprisingly few sports investing blogs out there, and if you know of any please let me know.

Martin, who writes the Tennis Trading blog asked to be added, and I have complied, although to be honest with a 15 month break between February 2020 and this month, I fully expect this blog to go dormant sooner rather than later. 

His comeback post blamed the pandemic for the loss of interest, but the tennis markets are tough to find an edge in so it will be interesting to see what transpires, but Martin is correct in saying that:
A progressive staking system will never change a losing strategy in a winning one. There has to be a real edge.

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