Re: [Pen-l] Dow 11,349.28

[Laurent GUERBY <laurent@xxxxxxxxxx>]

On Fri, 2008-07-25 at 10:00 -0400, Louis Proyect wrote:
> http://www.harpers.org/archive/2008/07/hbc-90003316
> Dow 11,349.28
> 
> By Ken Silverstein
> 
> James Glassman and Kevin Hassett published Dow 36,000: The New Strategy 
> for Profiting from the Coming Rise in the Stock Market on September 20, 
> 1999, an event which almost immediately triggered a drop in stock prices 
> from which the market has never recovered. After todayâs sharp drop to 
> 11,349, the market stands 526 points above its close roughly nine years 
> ago when the book came out.
> 
> Thatâs a gain of about 0.5 percent annually since Glassman and Hassett 
> issued their bullish proclamation. Investors would have done better 
> putting their money in a savings account (and almost as well leaving it 
> under the mattress).

Technical nit: you need to add dividends received (the "total return"
index) for those investment comparison to be valid. I don't know of a
public source for Dow Jones Industrials long term total returns, google
finance has it since dec 2005 (.DJUSINT) so for example:

          total / index
09Dec2005 351.57 10778.58
24Jul2008 408.27 11632.38
ratio      16.1%      7.9%

So about 3.5% yearly dividends for recent data.

But risk adjusted it clearly hasn't paid investors :).

Laurent


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