The Dow Jones Hit Its Bull Market High 10 Years Ago Today

On Friday, January 14, 2000, the Dow closed at 11,722.98 — a level it wouldn’t break for over six years. That peak capped an amazing 17-1/2 year run. In the ensuring 10 years, we’ve lost about 1,000 points or roughly 8.9%. Inflation, or at least the CPI, has increased by about 28% which makes the inflation-adjusted close from ten years more like 15,000. Ten years ago, gold was going for about $280 an ounce (around $360 inflation adjusted).
In the letters section of the January 2000 issue of the Atlantic, J. Douglas Van Sant of Stockton, California criticized the article in the September 1999 issue on Dow 36,000 by James Glassman and Kevin Hassett.
Mr. Van Sant wrote:

I would be willing to bet Glassman and Hassett that even ten years from now, when earnings and dividends should have nearly doubled, the Dow Jones Industrial Average will still be closer to its current level of 11,000 than to their hyperbolic projection of 36,000.

Good call. The Dow closed yesterday at 10,680.77.
Glassman and Hassett replied:

To J. Douglas Van Sant we say, if the Dow is closer to 10,000 than to 36,000 ten years from now, we will each give $1,000 to the charity of your choice.

I recommend Haiti.

Posted by Eddy Elfenbein on January 14th, 2010 at 6:48 am

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