What's Dow 40,000 in “real” terms?

Travis Pavlik ‏@tpavlik: your dow 40k call…whats that in “real” terms


A couple of comments. In the past 10 years I’ve made lots of predictions based on analysis of the markets. I’ve published those in places ranging from the Wall Street Journal to Forbes to thestreet.com and probably a dozen other places. Most of them have turned out pretty good. I try not to do it too much anymore for several reasons.

A) People will always hate you no matter what. Whether you win or lose, someone lost money. And they hate you.

B) The stock market, in general, is for suckers.

C) People ALWAYS forget my good calls. The stocks that go from $1 to $30 and then get bought out. And there are plenty of those.

D) I lost interest. In general, Wall Street is crooked and I don’t like having anything to do with it. Having had everything to do with it for years. Heck, I practically applied to work for Bernie Madoff.

E) I really love the direction my writing is now going. And it’s far away from stocks.

F) I get constant hatemail about stocks. Or I see random lies about me on message boards. I really can’t stand it after ten years. You’d think I get used to people calling me an “ugly creep” but it just never gets better.

So, back to your question. I assume it is somewhat sarcastic or negative towards me for a few reasons. For one thing, I never made a prediction for Dow 40,000. I made a prediction for Dow 20,000. Second, you ask in “real” terms. I only made the prediction a year ago. So inflation’s been about 2%. If you look at housing prices (instead of rentals, which is what the inflation index is usually composed of) there’s actually been deflation. So I’m not sure what point is being made with the word “real”.

I predicted Dow 20,000 for the end of 2013. My guess is we won’t get to Dow 20,000 by the end of 2013. Growth has been slower than I thought.

Does that mean that everyone who followed my prediction was a loser and lost money. Does it make me a loser?

When I made the prediction, the Dow was at 12,470. Right now the Dow is at 13,560. So 8.7% higher. Nobody is losing money. Around the same time I also said on CNBC that AAPL was a strong buy and would be the first trillion dollar company. It was at 350 then. It’s at 700 now. About a 100% return. A few months earlier, I had also predicted that a stock, INHX, then at $1.80, would go higher. It got sold a year later at $26. About a 1400% return. Everyone who followed the advice is making money. You can’t really ask for better. There are no prophets on Wall Street.