Will the Dow ever see 29500 again?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
User avatar
Garco
Posts: 751
Joined: Wed Jan 23, 2013 2:04 am
Location: U.S.A.

Re: Will the Dow ever see 29500 again?

Post by Garco »

I just looked into my TV window and I saw the DOW flying by at $29,826. I hope it never goes as low as $29,500 again. But I would bet $1000 that it will. With the stock market you should never say "never." But that doesn't mean anything in practice. Markets go up and markets go down.
Xrayman69
Posts: 637
Joined: Fri Jun 01, 2018 8:52 pm

Re: Will the Dow ever see 29500 again?

Post by Xrayman69 »

Good “noise/news” today and last Monday with regards to equity pricing. Still just short term daily noise compared to years to decade time horizon.

Full disclosure, I was psychologically prepared for a down or sideways “trading” market for another year or two but felt comfortable with my plan to buy and hold and rebalance as deemed appropriate based upon a long time horizon of at least 5-10 additional years.
UpperNwGuy
Posts: 4289
Joined: Sun Oct 08, 2017 7:16 pm

Re: Will the Dow ever see 29500 again?

Post by UpperNwGuy »

retire2022 wrote: Mon Nov 16, 2020 1:37 pm Op

If you are invested in the Three Fund portfolio VTI/VTSAX or SP500 I would ignore the Dow since it is only 30 stocks.

If you are in SP500, follow SP500 or VFIAX or VOO

For VTI/VTSAX follow NASDAQ.
How high will the S&P 500 go by the end of 2020?
retire2022
Posts: 1662
Joined: Tue Oct 02, 2018 6:10 pm
Location: NYC

Re: Will the Dow ever see 29500 again?

Post by retire2022 »

UpperNwGuy wrote: Mon Nov 16, 2020 2:47 pm
How high will the S&P 500 go by the end of 2020?
I don't know what the SP500 will be for you, I follow the 20 Simple Moving Average versus the 200 Simple Moving Average.

While I don't know your particulars in terms of where you are in your phase of savings I cannot answer that question for you.

In other words my cost basis is lower than my compounded profits over 32 years, so I can afford to time the market.

My particular situation is I have won the game.

My asset allocation is 93/6, and at 2.05 million with 100K in cash which I had sold off 408K the other week.

I am a market timer, been before this board existed.

With the election results still in question and Covid not been resolved and the economy not firing on all cylinders, it is open question.

I may move my 6% of cash if there is a pullback.

I am waiting.

Does that answer your question? :)
User avatar
Brianmcg321
Posts: 1046
Joined: Mon Jul 15, 2019 8:23 am

Re: Will the Dow ever see 29500 again?

Post by Brianmcg321 »

Looking at all the predictions on the first page is pretty funny. All of them pretty much thought it would be 2-3 years.

Nobody knows nuthin'
Rules to investing: | 1. Don't lose money. | 2. Don't forget rule number 1.
User avatar
HomerJ
Posts: 15326
Joined: Fri Jun 06, 2008 12:50 pm

Re: Will the Dow ever see 29500 again?

Post by HomerJ »

tibbitts wrote: Mon Nov 16, 2020 11:39 am The odds of the Nikkei returning to its previous high were about the same as for the Dow.
You can't make that statement because no one knows what the odds were in either case (and both very different scenarios).
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
User avatar
JamalJones
Posts: 195
Joined: Sat May 28, 2016 12:53 pm
Location: Virgo Super Cluster

Re: Will the Dow ever see 29500 again?

Post by JamalJones »

z3r0c00l wrote: Mon Nov 16, 2020 1:25 pm
JamalJones wrote: Mon Nov 16, 2020 1:10 pm .
If my calculations are correct, when the DOW hits 36,000... you're gonna see some serious ****.
36,000 is the inflection point where stocks make a one-time adjustment that reflects the fact that stocks are less risky than bonds.
Indeed!
TSP + Vanguard Roth IRA + Vanguard Taxable: 80% equities / 20% bonds | "I don't shine shoes, I don’t tape ankles, I don't cut checks - straight cash homie!!" --R. Moss
User avatar
dogagility
Posts: 1133
Joined: Fri Feb 24, 2017 6:41 am

Re: Will the Dow ever see 29500 again?

Post by dogagility »

I'll do you one better by putting in dates to your predictions (or I have no idea what I'm talking about and can't predict the future...) :sharebeer
Somethingwitty92912 wrote: Mon Nov 16, 2020 9:58 am Yes, over the next 10 years you will see it rise to 36800, before we see a major crash again on 3/3/30, it will drop back down to around 26900 on 4/2/31before it rebounds to a stable position of 34000 on 5/23/32, then it will rise back to 39000 by 4/4/33, or I have no idea what I am talking about and no one can predict the future.
All children spill milk. Learn to smile and wipe it up. -- A Farmer's Wife
UpperNwGuy
Posts: 4289
Joined: Sun Oct 08, 2017 7:16 pm

Re: Will the Dow ever see 29500 again?

Post by UpperNwGuy »

retire2022 wrote: Mon Nov 16, 2020 3:39 pm
UpperNwGuy wrote: Mon Nov 16, 2020 2:47 pm
How high will the S&P 500 go by the end of 2020?
I don't know what the SP500 will be for you, I follow the 20 Simple Moving Average versus the 200 Simple Moving Average.

While I don't know your particulars in terms of where you are in your phase of savings I cannot answer that question for you.

In other words my cost basis is lower than my compounded profits over 32 years, so I can afford to time the market.

My particular situation is I have won the game.

My asset allocation is 93/6, and at 2.05 million with 100K in cash which I had sold off 408K the other week.

I am a market timer, been before this board existed.

With the election results still in question and Covid not been resolved and the economy not firing on all cylinders, it is open question.

I may move my 6% of cash if there is a pullback.

I am waiting.

Does that answer your question? :)
No, it doesn't answer my question. I was looking for a one sentence answer such as: the S&P 500 is likely to hit 3800 by the end of 2020. All that other stuff about your situation, my situation, moving averages, compounded profits, and asset allocations is not relevant to my question.
retire2022
Posts: 1662
Joined: Tue Oct 02, 2018 6:10 pm
Location: NYC

Re: Will the Dow ever see 29500 again?

Post by retire2022 »

UpperNwGuy wrote: Mon Nov 16, 2020 4:43 pm
No, it doesn't answer my question. I was looking for a one sentence answer such as: the S&P 500 is likely to hit 3800 by the end of 2020. All that other stuff about your situation, my situation, moving averages, compounded profits, and asset allocations is not relevant to my question.
Not my problem, lol.
UpperNwGuy
Posts: 4289
Joined: Sun Oct 08, 2017 7:16 pm

Re: Will the Dow ever see 29500 again?

Post by UpperNwGuy »

retire2022 wrote: Mon Nov 16, 2020 5:14 pm
UpperNwGuy wrote: Mon Nov 16, 2020 4:43 pm
No, it doesn't answer my question. I was looking for a one sentence answer such as: the S&P 500 is likely to hit 3800 by the end of 2020. All that other stuff about your situation, my situation, moving averages, compounded profits, and asset allocations is not relevant to my question.
Not my problem, lol.
Nor mine either, but you're the one who told OP to pay attention to it.
retire2022
Posts: 1662
Joined: Tue Oct 02, 2018 6:10 pm
Location: NYC

Re: Will the Dow ever see 29500 again?

Post by retire2022 »

UpperNwGuy wrote: Mon Nov 16, 2020 5:40 pm
Nor mine either, but you're the one who told OP to pay attention to it.
I have different reason for paying attention to the SP500 as I outlined before.
manatee2005
Posts: 1048
Joined: Wed Dec 18, 2019 9:17 pm

Re: Will the Dow ever see 29500 again?

Post by manatee2005 »

I love these resurrected March posts.
User avatar
dogagility
Posts: 1133
Joined: Fri Feb 24, 2017 6:41 am

Re: Will the Dow ever see 29500 again?

Post by dogagility »

manatee2005 wrote: Mon Nov 16, 2020 5:44 pm I love these resurrected March posts.
Me too. All the angst on display is a good reminder that "nobody knows 'nuthin", so "stay the course"...
All children spill milk. Learn to smile and wipe it up. -- A Farmer's Wife
GoldenFinch
Posts: 2285
Joined: Mon Nov 10, 2014 11:34 pm

Re: Will the Dow ever see 29500 again?

Post by GoldenFinch »

dogagility wrote: Mon Nov 16, 2020 5:47 pm
manatee2005 wrote: Mon Nov 16, 2020 5:44 pm I love these resurrected March posts.
Me too. All the angst on display is a good reminder that "nobody knows 'nuthin", so "stay the course"...
These threads provide a nice diary-like history of what happened, but also what people were thinking at the time. Very interesting in retrospect!
Dottie57
Posts: 9314
Joined: Thu May 19, 2016 5:43 pm
Location: Earth Northern Hemisphere

Re: Will the Dow ever see 29500 again?

Post by Dottie57 »

I watch SP500 and some international. I don’t know why anyone really watches the DOW.
000
Posts: 3257
Joined: Thu Jul 23, 2020 12:04 am

Re: Will the Dow ever see 29500 again?

Post by 000 »

z3r0c00l wrote: Mon Nov 16, 2020 1:25 pm
JamalJones wrote: Mon Nov 16, 2020 1:10 pm .
If my calculations are correct, when the DOW hits 36,000... you're gonna see some serious ****.
36,000 is the inflection point where stocks make a one-time adjustment that reflects the fact that stocks are less risky than bonds.
Of what adjustment do you speak?
z3r0c00l
Posts: 1857
Joined: Fri Jul 06, 2012 11:43 am
Location: NYC
Contact:

Re: Will the Dow ever see 29500 again?

Post by z3r0c00l »

000 wrote: Mon Nov 16, 2020 6:02 pm
z3r0c00l wrote: Mon Nov 16, 2020 1:25 pm
JamalJones wrote: Mon Nov 16, 2020 1:10 pm .
If my calculations are correct, when the DOW hits 36,000... you're gonna see some serious ****.
36,000 is the inflection point where stocks make a one-time adjustment that reflects the fact that stocks are less risky than bonds.
Of what adjustment do you speak?
That was the thesis behind the book Dow 36,000 - that the bubble of the late 90's was actually a realization that stocks are no more risky than bonds, and a one time leap forward in price was to be expected. The thesis was probably wrong, the timing comical, but strangely enough it might be coming true in a sense. Interest rates have now dropped so low that it is more reasonable than ever that stocks take on lofty valuations. In a world were 30 year treasuries offer negative real returns, a CAPE of 35 doesn't seem so crazy. If this decade holds relative peace and prosperity, I think Dow 50,000 will be upon us before 2030. 8 years at what, 6.5% is all we need to get there?
000
Posts: 3257
Joined: Thu Jul 23, 2020 12:04 am

Re: Will the Dow ever see 29500 again?

Post by 000 »

z3r0c00l wrote: Mon Nov 16, 2020 6:16 pm That was the thesis behind the book Dow 36,000 - that the bubble of the late 90's was actually a realization that stocks are no more risky than bonds, and a one time leap forward in price was to be expected. The thesis was probably wrong, the timing comical, but strangely enough it might be coming true in a sense. Interest rates have now dropped so low that it is more reasonable than ever that stocks take on lofty valuations. In a world were 30 year treasuries offer negative real returns, a CAPE of 35 doesn't seem so crazy. If this decade holds relative peace and prosperity, I think Dow 50,000 will be upon us before 2030. 8 years at what, 6.5% is all we need to get there?
Thanks for clarifying.

A "permanently high plateau", so to speak?
z3r0c00l
Posts: 1857
Joined: Fri Jul 06, 2012 11:43 am
Location: NYC
Contact:

Re: Will the Dow ever see 29500 again?

Post by z3r0c00l »

A classic case of "this time is different." It rarely, if ever, is different. Yes internet and radio and railroads changed the world but they didn't justify their bubbles. The same is true of Japan, their way of doing business had lots of eastern mystique about it but their asset prices were irrational.
manatee2005
Posts: 1048
Joined: Wed Dec 18, 2019 9:17 pm

Re: Will the Dow ever see 29500 again?

Post by manatee2005 »

dogagility wrote: Mon Nov 16, 2020 5:47 pm
manatee2005 wrote: Mon Nov 16, 2020 5:44 pm I love these resurrected March posts.
Me too. All the angst on display is a good reminder that "nobody knows 'nuthin", so "stay the course"...
Yup. I am lucky I joined bogleheads in Dec 2019, 3 months before the pandemic and during that time I learned to stay to course. Otherwise, without Bogleheads I would have probably panic sold in March and still be in cash.
MakingBacon
Posts: 50
Joined: Tue Oct 02, 2018 1:15 am

Re: Will the Dow ever see 29500 again?

Post by MakingBacon »

Garco wrote: Mon Nov 16, 2020 2:19 pm I just looked into my TV window and I saw the DOW flying by at $29,826. I hope it never goes as low as $29,500 again. But I would bet $1000 that it will.
Eh? I hope it does indeed go below 29,500 again...well below. I'm still kicking myself for not buying more back in March because I was scared. I won't make that mistake again the next time we have a big dip.
z3r0c00l
Posts: 1857
Joined: Fri Jul 06, 2012 11:43 am
Location: NYC
Contact:

Re: Will the Dow ever see 29500 again?

Post by z3r0c00l »

MakingBacon wrote: Tue Nov 17, 2020 1:10 am
Garco wrote: Mon Nov 16, 2020 2:19 pm I just looked into my TV window and I saw the DOW flying by at $29,826. I hope it never goes as low as $29,500 again. But I would bet $1000 that it will.
Eh? I hope it does indeed go below 29,500 again...well below. I'm still kicking myself for not buying more back in March because I was scared. I won't make that mistake again the next time we have a big dip.
I think the lesson is to buy now and not wait.
User avatar
Brianmcg321
Posts: 1046
Joined: Mon Jul 15, 2019 8:23 am

Re: Will the Dow ever see 29500 again?

Post by Brianmcg321 »

MakingBacon wrote: Tue Nov 17, 2020 1:10 am
Garco wrote: Mon Nov 16, 2020 2:19 pm I just looked into my TV window and I saw the DOW flying by at $29,826. I hope it never goes as low as $29,500 again. But I would bet $1000 that it will.
Eh? I hope it does indeed go below 29,500 again...well below. I'm still kicking myself for not buying more back in March because I was scared. I won't make that mistake again the next time we have a big dip.

Did you miss the big dip in October? It was a 2000 pt drop. If you didn’t buy then, why not?
Rules to investing: | 1. Don't lose money. | 2. Don't forget rule number 1.
z3r0c00l
Posts: 1857
Joined: Fri Jul 06, 2012 11:43 am
Location: NYC
Contact:

Re: Will the Dow ever see 29500 again?

Post by z3r0c00l »

Brianmcg321 wrote: Tue Nov 17, 2020 8:39 am
MakingBacon wrote: Tue Nov 17, 2020 1:10 am
Garco wrote: Mon Nov 16, 2020 2:19 pm I just looked into my TV window and I saw the DOW flying by at $29,826. I hope it never goes as low as $29,500 again. But I would bet $1000 that it will.
Eh? I hope it does indeed go below 29,500 again...well below. I'm still kicking myself for not buying more back in March because I was scared. I won't make that mistake again the next time we have a big dip.

Did you miss the big dip in October? It was a 2000 pt drop. If you didn’t buy then, why not?
The idea is to wait until stocks go way up, like 30%, then when they drop 5% you buy the dip. :oops:
User avatar
Garco
Posts: 751
Joined: Wed Jan 23, 2013 2:04 am
Location: U.S.A.

Re: Will the Dow ever see 29500 again?

Post by Garco »

So many "ideas" for how to trade stocks. I never relied on any special signal or situation to pile into or abandon investments. I never was a trader and certainly never a day-trader. In my brokerage account I've certainly made trades on occasion, but that account is only about 20% of my retirement portfolio value, and I use it to give me more varied investment possibilities than I have in my tax-deferred accounts at Fido and TIAA.
Last edited by Garco on Tue Nov 17, 2020 1:02 pm, edited 1 time in total.
Xrayman69
Posts: 637
Joined: Fri Jun 01, 2018 8:52 pm

Re: Will the Dow ever see 29500 again?

Post by Xrayman69 »

Garco wrote: Tue Nov 17, 2020 12:37 pm So many "ideas" for how to trade stocks. I never relied on any special signal or special situation to pile into or abandon investments. I never was a trader. In my brokerage account I've certainly made trades on occasion, but that account is only about 20% of my retirement portfolio value, and I use it to give me more flexibility than I have in my tax deferred accounts at Fido and TIAA.
Have about 5% in tradable accounts. Have been using VIX as an interesting trade and play the last 6 months. Using it just like sports wagering as a point of interest. I’m otherwise 80%+ equity funds that are buy and hold and DCA every week and month.

The S&P has been bouncing in a range around 3500 and 3000 for the past several months with a trend going up. Each time the last several months when it got around 3400 on a sharp up day >1.5% I purchased VIX with cash on hand. The volatility has regularly pulled back the index down about 5-8% that permitted me to sell the VIX and buy the VOO at the lower price while the VIX a d S&P price are typically inversed by 3-5x.

Have been fortunate and done this 4x since June.

As the S&P hit over 3600 this week bought VIX again as a hedge. Perhaps will get pullback on S&P to 3400 at which point will sell vix and convert to VOO
User avatar
sperry8
Posts: 2211
Joined: Sat Mar 29, 2008 9:25 pm
Location: Miami FL

Re: Will the Dow ever see 29500 again?

Post by sperry8 »

alfaspider wrote: Wed Mar 25, 2020 3:20 pm
sperry8 wrote: Wed Mar 25, 2020 2:04 pm
justsomeguy2018 wrote: Sun Mar 22, 2020 8:28 pm And if so, how long til we get back to the peak? Seems like if it keeps dropping significantly the harder it will be to get back to peqk levels. 10 years?

I'm pretty bummed that I only started to max out retirement accounts the last few years at all time highs and might not be able to contribute at the lows if I am out of a job.
Think of it rationally. The market is (was) down 34% from all time high. That means we need a 50% rise to get to even. In an average bull market the market rises ~17% per year. Assuming that was the bottom we get back to all time highs (on average) in 3 years. Assuming it was not the low, and a new low is to be made... we may need a 4th year to get back to even from that unknown future date. So we are looking at 3-4 years, perhaps 5 depending on when the final low is made.
You are thinking about it too linearly. You typically don't see a steady 17% year after year in a bull. Extreme drawdowns have also been met by extreme upswings. For example 1933-34 saw real returns in the 65% range. 50% could occur within a year if the shutdowns end sooner than expected. Remember that we are mostly still in the stage of a predicted calamity rather than one that has actually occurred. I don't doubt the legitimacy and seriousness of the expert predictions of what will happen, but even the experts have a very wide divergence in terms of predicted outcomes.
Nailed it
BH contest results: 2019: #233 of 645 | 18: #150 of 493 | 17: #516 of 647 | 16: #121 of 610 | 15: #18 of 552 | 14: #225 of 503 | 13: #383 of 433 | 12: #366 of 410 | 11: #113 of 369 | 10: #53 of 282
Afty
Posts: 1451
Joined: Sun Sep 07, 2014 5:31 pm

Re: Will the Dow ever see 29500 again?

Post by Afty »

hagridshut wrote: Sun Mar 22, 2020 9:21 pm Signal for the bottom is when people are so demoralized that they can no longer bring themselves to visit these forums, and most of the final posts from departing members are bitter, profane, and angry diatribes cursing "Bogleheads" for encouraging us to "Stay the Course". We are getting there, at least anger wise.
This post was prescient. The actual bottom was one day later on March 23. “Be fearful when others are greedy, and greedy when others are fearful.”
manatee2005
Posts: 1048
Joined: Wed Dec 18, 2019 9:17 pm

Re: Will the Dow ever see 29500 again?

Post by manatee2005 »

Afty wrote: Sat Nov 21, 2020 1:31 am
hagridshut wrote: Sun Mar 22, 2020 9:21 pm Signal for the bottom is when people are so demoralized that they can no longer bring themselves to visit these forums, and most of the final posts from departing members are bitter, profane, and angry diatribes cursing "Bogleheads" for encouraging us to "Stay the Course". We are getting there, at least anger wise.
This post was prescient. The actual bottom was one day later on March 23. “Be fearful when others are greedy, and greedy when others are fearful.”
I backed up the truck and bought stocks in early march when they dropped a bit. Then they dropped off a cliff in mid March. It was a gut punch at the time but now those shares are up a lot.
retire2022
Posts: 1662
Joined: Tue Oct 02, 2018 6:10 pm
Location: NYC

Re: Will the Dow ever see 29500 again?

Post by retire2022 »

op

It only took nine months

https://www.cnbc.com/2020/11/23/stock-m ... -news.html

The Dow Jones Industrial Average rallied on Tuesday, breaking above 30,000 for the first time as this month’s rally in beaten-down value stocks continued to pick up steam amid positive vaccine news and hope for a strong economic recovery.
Last edited by retire2022 on Tue Nov 24, 2020 12:10 pm, edited 1 time in total.
Jags4186
Posts: 5209
Joined: Wed Jun 18, 2014 7:12 pm

Re: Will the Dow ever see 29500 again?

Post by Jags4186 »

Now we can all ask the question again. Will the Dow ever see 29,500 again? :moneybag :confused :moneybag :greedy
bmelikia
Posts: 634
Joined: Mon Jun 15, 2009 9:23 pm

Re: Will the Dow ever see 29500 again?

Post by bmelikia »

Maybe it won't anymore!
"I would rather die with money, than live without it...." - Bogleheads member Ron | | "The greatest enemy of a good plan, is the dream of a perfect plan." | -Bogle
Tommy
Posts: 220
Joined: Mon Mar 07, 2016 11:47 pm

Re: Will the Dow ever see 29500 again?

Post by Tommy »

Let's see what happens tomorrow :)
User avatar
F150HD
Posts: 3278
Joined: Fri Sep 18, 2015 7:49 pm

Re: Will the Dow ever see 29500 again?

Post by F150HD »

wheres all the March "going to cash" folks at?
dru808
Posts: 1046
Joined: Sat Oct 15, 2011 2:42 pm
Location: mid pac

Re: Will the Dow ever see 29500 again?

Post by dru808 »

I love these 🧵’s
65% US equity | 25% ex US equity | 10% US long bond index
User avatar
MNGopher
Posts: 520
Joined: Tue Jun 16, 2015 1:44 pm
Location: Minnesota

Re: Will the Dow ever see 29500 again?

Post by MNGopher »

This has to be one of the fastest recoveries ever. It's amazing to me how fast it's been considering the virus is still around and businesses are still facing shutdowns.
Call_Me_Op
Posts: 8003
Joined: Mon Sep 07, 2009 2:57 pm
Location: Milky Way

Re: Will the Dow ever see 29500 again?

Post by Call_Me_Op »

Nobody knows nuthin'.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein
whereskyle
Posts: 1286
Joined: Wed Jan 29, 2020 10:29 am

Re: Will the Dow ever see 29500 again?

Post by whereskyle »

Somethingwitty92912 wrote: Mon Nov 16, 2020 9:58 am Yes, over the next 10 years you will see it rise to 36800, before we see a major crash again, it will drop back down to around 26900 before it rebounds to a stable position of 34000, then it will rise back to 39000, or I have no idea what I am talking about and no one can predict the future.
Remove everything after the "or"

This is spot on.

Good work!
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle
whereskyle
Posts: 1286
Joined: Wed Jan 29, 2020 10:29 am

Re: Will the Dow ever see 29500 again?

Post by whereskyle »

MNGopher wrote: Tue Nov 24, 2020 9:47 pm This has to be one of the fastest recoveries ever. It's amazing to me how fast it's been considering the virus is still around and businesses are still facing shutdowns.
The tech sector that drives the market became that much more valuable.

Still waiting on value to become valuable though!
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle
RobLyons
Posts: 810
Joined: Tue Oct 31, 2017 12:55 pm

Re: Will the Dow ever see 29500 again?

Post by RobLyons »

Amazing how the markets ignore the debacle that is the US is right now. Glad I decided to buy more with every 1,000 pt drop. Very nice returns. Prepare for correction.
"Great parenting sets the foundation for a better world"
Valuethinker
Posts: 41428
Joined: Fri May 11, 2007 11:07 am

Re: Will the Dow ever see 29500 again?

Post by Valuethinker »

z3r0c00l wrote: Mon Nov 16, 2020 6:16 pm
000 wrote: Mon Nov 16, 2020 6:02 pm
z3r0c00l wrote: Mon Nov 16, 2020 1:25 pm
JamalJones wrote: Mon Nov 16, 2020 1:10 pm .
If my calculations are correct, when the DOW hits 36,000... you're gonna see some serious ****.
36,000 is the inflection point where stocks make a one-time adjustment that reflects the fact that stocks are less risky than bonds.
Of what adjustment do you speak?
That was the thesis behind the book Dow 36,000 - that the bubble of the late 90's was actually a realization that stocks are no more risky than bonds, and a one time leap forward in price was to be expected. The thesis was probably wrong, the timing comical, but strangely enough it might be coming true in a sense. Interest rates have now dropped so low that it is more reasonable than ever that stocks take on lofty valuations. In a world were 30 year treasuries offer negative real returns, a CAPE of 35 doesn't seem so crazy. If this decade holds relative peace and prosperity, I think Dow 50,000 will be upon us before 2030. 8 years at what, 6.5% is all we need to get there?
6.5% does not sound bad from a Total Return perspective.

But current market yield is c 2%? So 2% dividend yield (+growth in dividends) + capital returns = 6.5% pa? That seems doable -- say 4.5% real. On the high side, but doable.

6.5% simply on price return implies a real return of c 6.5% pa (assuming dividend yield of 2%) and that seems extreme.
Last edited by Valuethinker on Wed Nov 25, 2020 10:06 am, edited 1 time in total.
Valuethinker
Posts: 41428
Joined: Fri May 11, 2007 11:07 am

Re: Will the Dow ever see 29500 again?

Post by Valuethinker »

retire2022 wrote: Tue Nov 24, 2020 12:08 pm op

It only took nine months

https://www.cnbc.com/2020/11/23/stock-m ... -news.html

The Dow Jones Industrial Average rallied on Tuesday, breaking above 30,000 for the first time as this month’s rally in beaten-down value stocks continued to pick up steam amid positive vaccine news and hope for a strong economic recovery.
Yes although compared to the original forecast in Dow 30,000, it took 20 years.

Those of us who have been investing over that time well remember the first 10 years, where it went nowhere, almost.
retire2022
Posts: 1662
Joined: Tue Oct 02, 2018 6:10 pm
Location: NYC

Re: Will the Dow ever see 29500 again?

Post by retire2022 »

Valuethinker wrote: Wed Nov 25, 2020 10:05 am
Yes although compared to the original forecast in Dow 30,000, it took 20 years.

Those of us who have been investing over that time well remember the first 10 years, where it went nowhere, almost.
going down currently, reversion to the mean. :happy
alfaspider
Posts: 3066
Joined: Wed Sep 09, 2015 4:44 pm

Re: Will the Dow ever see 29500 again?

Post by alfaspider »

sperry8 wrote: Sat Nov 21, 2020 12:41 am
alfaspider wrote: Wed Mar 25, 2020 3:20 pm
sperry8 wrote: Wed Mar 25, 2020 2:04 pm
justsomeguy2018 wrote: Sun Mar 22, 2020 8:28 pm And if so, how long til we get back to the peak? Seems like if it keeps dropping significantly the harder it will be to get back to peqk levels. 10 years?

I'm pretty bummed that I only started to max out retirement accounts the last few years at all time highs and might not be able to contribute at the lows if I am out of a job.
Think of it rationally. The market is (was) down 34% from all time high. That means we need a 50% rise to get to even. In an average bull market the market rises ~17% per year. Assuming that was the bottom we get back to all time highs (on average) in 3 years. Assuming it was not the low, and a new low is to be made... we may need a 4th year to get back to even from that unknown future date. So we are looking at 3-4 years, perhaps 5 depending on when the final low is made.
You are thinking about it too linearly. You typically don't see a steady 17% year after year in a bull. Extreme drawdowns have also been met by extreme upswings. For example 1933-34 saw real returns in the 65% range. 50% could occur within a year if the shutdowns end sooner than expected. Remember that we are mostly still in the stage of a predicted calamity rather than one that has actually occurred. I don't doubt the legitimacy and seriousness of the expert predictions of what will happen, but even the experts have a very wide divergence in terms of predicted outcomes.
Nailed it
Sort of. The predicted calamity did happen, but I certainly underestimated how easily the market could shrug it off. I suppose I was right about the possibility of a swift upswing.
User avatar
Mel Lindauer
Moderator
Posts: 31184
Joined: Mon Feb 19, 2007 8:49 pm
Location: Daytona Beach Shores, Florida
Contact:

Re: Will the Dow ever see 29500 again?

Post by Mel Lindauer »

Perhaps today?
Best Regards - Mel | | Semper Fi
User avatar
abuss368
Posts: 22052
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: Will the Dow ever see 29500 again?

Post by abuss368 »

retire2022 wrote: Wed Nov 25, 2020 10:08 am
Valuethinker wrote: Wed Nov 25, 2020 10:05 am
Yes although compared to the original forecast in Dow 30,000, it took 20 years.

Those of us who have been investing over that time well remember the first 10 years, where it went nowhere, almost.
going down currently, reversion to the mean. :happy
Is international on the way up now?
John C. Bogle: “Simplicity is the master key to financial success."
retire2022
Posts: 1662
Joined: Tue Oct 02, 2018 6:10 pm
Location: NYC

Re: Will the Dow ever see 29500 again?

Post by retire2022 »

abuss368 wrote: Wed Nov 25, 2020 10:14 pm
Is international on the way up now?
You know the answer to that in the thread below:

viewtopic.php?p=5607227#p5607227
Post Reply