‘Dow 36,000’ Looks Less Daft But Still Misses the Point
Even if stocks are undervalued, as a symbol of 1990s mania argued, equity risk is real.
Not there yet.
Photographer: Kena Betancur/Getty Images
In 1999, James Glassman and Kevin Hassett created a sensation with their book “Dow 36,000: The New Strategy for Profiting from the Coming Rise in the Stock Market.” The authors, who viewed stocks as undervalued, predicted the Dow Jones Industrial Average would quadruple in three to five years. Reviewing it at the time, I wrote, “The only thing missing from this halftime speech of an investment book is the exhortation to buy stocks for the Gipper.”
Their headline assertion, of course, never came to pass; 1999 was the peak of the biggest bubble in U.S. stock market history. Stocks fell 44% in real terms over the next few years, then rose to almost 1999 real levels in 2007 before falling 50% in the financial crisis. The Dow has only recently hit 29,000, 25% short of 36,000 after 20 years.