It looks as though “risk assets” are again in favor this morning, though, there’s no telling how long that might last. Amid all the talk about the current “correction” and the likelihood of a new “bear market”, Jason Zweig’s Intelligent Investor commentary in the weekend Wall Street Journal is worth a look for those who haven’t already sold their stocks.
Will Dow 10000 turn out to be a long replay of Dow 1000?
Last week, the Dow Jones Industrial Average rose above 10000—again.
Since March 16, 1999, when it first touched 10000 in intraday trading, the Dow has bounced over that threshold and back 63 times. This Friday, the index closed 219.6 points below where it stood exactly 11 years ago.
This isn’t the first time stocks have been stuck on a seemingly endless pogo-stick ride. On Jan. 18, 1966, the Dow hit an intraday high of 1000.50. It broke through the four-digit barrier three more times that January and February, then faded. The Dow cracked 1000 again in 1972 and 1976, then fell back both times. Not until December 1982 did the Dow finally hurdle above 1000 and stay there.
There’s a lot more on how much the last two secular bear markets have in common. It continues to amaze me that so many stock investors don’t acknowledge the whole idea of a “secular bear market” and that the vast majority of those who do think it’s already over.
The behavior of long-term interest rates had the former Federal Reserve chairman scratching his head. It’s gold that puzzles the current Fed chief. Damned if Bernanke and his fellow central bankers can explain the surge by a metal John Maynard Keynes once dismissed as a “barbaric relic.”
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