Because I am a jerk

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CFA_Halifax

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Browsing through some old financial news from March 10, 2000. I'm sure many of you will understand the significance of that day.

Nasdaq sets record (again)
March 10, 2000: 5:20 p.m. ET

Tech buying doesn't let up, but blue chips in Dow can't catch a break


NEW YORK (CNNfn) - The Nasdaq composite eked out its 16th record of the year Friday, rising for the third time in three sessions, as money chased proven technology leaders such as Dell Computer, Microsoft and Qualcomm.

http://money.cnn.com/2000/03/10/markets/markets_newyork/



How the times have changed....
 
And today...

Stocks Waffle Amid M&A, Earnings
July 16, 2007 7:58 p.m.
The Dow industrials were this close to 14000 for a while Monday, before retreating � but still closing at a record � as worries about risk crept into the highflying marketplace.


http://online.wsj.com/article/SB118458791627067438.html?mod=home_whats_news_us
 
The Nasdaq is no where close to its 'glory' days, however. Also, in gold terms -the Dow is actully down significantly since 2000. The 'record high' really is an optical illusion unless you use a linear scale.
 
sure, there was a commodities bull run cum bubble in the 70s. sugar was up 44 times in a just a few years.the rise to the top was parabolic for so many commodities.
also, gold was 35 $ in 1971.

the point is that in the current decade the commodity bull run has been stronger than that in the equity indices (outside the emerging markets) . things have tripled or quadrupled in the same period when the Dow has climbed back to its level at the beginning of this millenium.

I guess, it is all relative - if your investing horizon spans such a period in world history when there is a commodity bull run, then it makes no sense to hope that 'equities will always go up in the long run'. to extend the cliche -in the long run,we are all dead.
 
Yes, I understand that today's market does compare to the markets in early 2000 or 87 as I don't believe they will crash per se. More of mid to late cycle correction. I was just browsing through some old news and thought it would be fun.

Did anyone read the article in the Economist a few weeks back in which they show that the NASDAQ rally was actually the largest in the history of major stockmarkets (compared the late 20's, 80's in Japan, and the currenct China boom)
 
If you want to see something really interesting on commodities check out this article on the economist.com from March of 1999...........

http://www.economist.com/opinion/displaystory.cfm?story_id=188181
 
Dsylexic Wrote:
-------------------------------------------------------
> The Nasdaq is no where close to its 'glory' days,
> however. Also, in gold terms -the Dow is actully
> down significantly since 2000. The 'record high'
> really is an optical illusion unless you use a
> linear scale.

I've never understood why I should care about this. Sounds like one of those made up statistics like inflation ex inflation. What's the Dow today in terms of soybeans? Who cares? I can't make it rain at Score's with soybeans.
 
HoldSideAnalyst Wrote:
-------------------------------------------------------
> I can't make it rain at Score's with soybeans.

This point bears repeating.
 
HoldSideAnalyst Wrote:
-------------------------------------------------------
> Dsylexic Wrote:
> --------------------------------------------------
> -----
> > The Nasdaq is no where close to its 'glory'
> days,
> > however. Also, in gold terms -the Dow is
> actully
> > down significantly since 2000. The 'record
> high'
> > really is an optical illusion unless you use a
> > linear scale.
>
> I've never understood why I should care about
> this. Sounds like one of those made up statistics
> like inflation ex inflation. What's the Dow today
> in terms of soybeans? Who cares? I can't make it
> rain at Score's with soybeans.



Not sure whats the point here -for someone who invested in gold in 2000 -it would make lots of sense. What is being implied is that it would have been crazy to miss the opportunity in gold .

About the inflation bit -if analysts can accept 'core' inflation -they can accept anything the BLS throws at them.
 
The point is that the US dollar is significantly weaker than it was in 2000. A global investor who has round-tripped the Dow in this time period has actually lost approximately 35% of their purchasing power due to the decline in the dollar (against the basket of world currencies). In other words, one share of each of the Dow 30 companies makes it rain a lot less at Scores now than it did seven years ago.

Ordinarily, gold would be a good benchmark for real purchasing power, but that distinction is a little iffy this time around. In this gold bull market, gold has risen in price in all currencies as a result of supply problems.

It is easier to say that a Eurpoean investor would not have broken even over the past seven years by being 100% invested in the Dow. They would be down about 41%.
 
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