I started trading stocks back in 1972. I had about $6,000 in the market. My grandfather and my dad traded stocks so it was pretty easy to pick up all the ins and outs of the market. It didn’t mean for one minute that you would make any money, hardly anybody did back then. My stock broker was a real agreeable guy. If you had a stock you liked and weren’t sure about buying it, he had about 10 good reasons why it was a good buy. He was a very good listener and let you do most of the talking. He knew that you came into buy something, otherwise you’d be some place else.
He had a plaque on his desk that had engraved on it “DOW 2000.” You’d look at the sign and then at him and wonder out loud, “Do you think it will ever happen.” We’d kind of laugh and chuckle and reflect that the DOW had been at 1,000 for a hell of a long time, and the concept of it going to 2000 was a pipe dream. The plaque was a good conversation piece even if it was a little ridiculous.
Anyway, I was reminiscing old times and began to think about that plaque with “DOW 2000” on it. I remembered the absurdity of the DOW hitting 2000 back in 1972. Not a chance. Then, looking at today’s market with the DOW at 12,000 that same plaque looks just as absurd, the same exact feeling as I had in 1972, it can't happen.
I guess what I have learned, is that the future is not rational or logical, when it comes to what’s going to happen next. We just take that concept for granted and that’s our biggest mistake.
3 comments:
Where you say "...take that concept for granite..." I always thought it was "take for granted." But I like this way of saying it too, like the concept seems solid as ganite. Also I happen to know from my manufacturing industry job that granite, like a diamond, is very hard, but that hardness causes it to be brittle and easily cracked.
Hi Grey Paper
I changed it, thanks for the notice. I guess I left the "d" off of granted and spell check suggested granite and I said ok.
Great post. Personally I'm waiting for the DJIA to hit triple digits (yes, that means < 1000) before I turn bullish again. Manias always end lower than they started, and this one started in 1982 in triple digits. Deflation will provide the neccessary extra fuel to get us down to this level.
Of course, if a currency hyperinflation sets in, then I could be wrong. Hyperinflation WILL happen in the US one day -- of that I have no doubt. But I think that's for a future time, today's problem is deflation.
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