The Dow Jones

Abuskedti

"experts" act suprized or mystified by this crash. It has often been blamed on mortgage lenders or boworrowers or credit crunch or whatever.

But the fact is.. this crash was a mathematical certainty that only the ignorant could not have expected. and our "experts" were perhaps made ignorant by the lure of short term success.

If you made projections of where the Dow or S&P woluld be using the chart of their performances since inception - starting around the year 2000...The graph extrapolated to infinity by about now.

Infinity! I guess the "experts" hoped all our retirement accounts would have reached infinity by now?

Indifference

Abuskedti wrote:

"experts" act suprized or mystified by this crash. It has often been blamed on mortgage lenders or boworrowers or credit crunch or whatever.

But the fact is.. this crash was a mathematical certainty that only the ignorant could not have expected. and our "experts" were perhaps made ignorant by the lure of short term success.

If you made projections of where the Dow or S&P woluld be using the chart of their performances since inception - starting around the year 2000...The graph extrapolated to infinity by about now.

Infinity! I guess the "experts" hoped all our retirement accounts would have reached infinity by now?

I would really like to see that graph as given the historical returns it isn't true.

Strangest Tribe

Ive studied economics and accounting enough to know there are no "experts"
When they have a method of calculating fear and emotion en mass then maybe they'll be able to make charts and graphs of substance rather than educated guesses.

jbalicki10

Strangest Tribe wrote:

Ive studied economics and accounting enough to know there are no "experts"
When they have a method of calculating fear and emotion en mass then maybe they'll be able to make charts and graphs of substance rather than educated guesses.

Exactly, Although Business does go through cycles like the seasons. You can't predict them for certain, but they are there.

jcfranz

Indifference wrote:

I would really like to see that graph as given the historical returns it isn't true.

http://www.marketthoughts.com/images/20080504/chart01.gif

Abuskedti

Indifference wrote:

I would really like to see that graph as given the historical returns it isn't true.

just go to CNN.com, go to business, click on the word Dow at the left.. you will get a graph.. on the bottom, use the drop down, select all data and hit refresh....

or just use this link

http://money.cnn.com/quote/chart/charts.popup.html?ClientID=44711&symb=djia&sid=1643&pg=ch&time=all&freq=1dy&maval=60&lf=1&type=2&mocktick=1&symbtype=0&country=US&rtsid=1000001643&style=2108&size=3

It is true!

In fact, the assumption that 10% annual growth is sustainable is absurd... take a look at what evey $100 per month does in 200 years at 10% annual interest.... I guess I can tell you the answer.. each of those little $100 montly investments would grow to over $5.3 Trillion every 200 years

DriftingByTheStorm

Abuskedti wrote:

In fact, the assumption that 10% annual growth is sustainable is absurd... take a look at what evey $100 per month does in 200 years at 10% annual interest.... I guess I can tell you the answer.. each of those little $100 montly investments would grow to over $5.3 Trillion every 200 years

Your assumption ignores inflation though, brother.

10% growth maybe isn't sustainable, but 10% "GROWTH" augmented with 5-15% inflation is certainly "sustainable", right?

Because in that case (more close to reality) there really isn't growth, there is just dollar multiplication consistent with a dilluted money supply.

I'm just sayin.

RolandTD20Kdrummer

DriftingByTheStorm wrote:

Your assumption ignores inflation though, brother.

10% growth maybe isn't sustainable, but 10% "GROWTH" augmented with 5-15% inflation is certainly "sustainable", right?

Because in that case (more close to reality) there really isn't growth, there is just dollar multiplication consistent with a dilluted money supply.

I'm just sayin.

kinda like this?

Abuskedti

DriftingByTheStorm wrote:

Your assumption ignores inflation though, brother.

10% growth maybe isn't sustainable, but 10% "GROWTH" augmented with 5-15% inflation is certainly "sustainable", right?

Because in that case (more close to reality) there really isn't growth, there is just dollar multiplication consistent with a dilluted money supply.

I'm just sayin.

Absolutely... was hoping you'd chime in..

people bought into the myth that putting money away every month would yield them at least 10% "growth".. that myth lured millions of new investors. That new money artificially inflated the price of stocks in a very very big way... and it built on itself and people began to expect "at least" 12% and if the went "risky" perhaps 17%

reality came knocking

it is not inconcievable that the market could drop to 5000 and remain there for another 10 or 15 years....

or... something else..

but I doubt there will be another deception that will bring back the beanie baby craze to mutual funds for a very long time.