The Stock Market

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Cartoon: Stock Market Swings

Stock Market Capitalization

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Peter Schiff on Gold and the Dow

Ludwig: Before this rally in gold is over, would you venture to guess how high it can go?

Schiff: I like to quote it in terms of the Dow, because you just don’t know how much inflation there’s going to be. So my target is for a relationship that’s close to 1-to-1 between gold and the Dow. I’ve had that target since the Dow was worth more than 40 ounces of gold. Right now it’s worth 8 or 8-1/2 ounces, so I think it’ll get down to 1-to-1. But you don’t know where that’s going to be. It could be Dow 5,000-gold $5,000, it could be Dow 10,000-gold $10,000; it could be Dow 20,000-gold $20,000; it could be Dow 2,000-gold $2,000. I don’t know where it’s going to be, but I think it’s going to happen.

Ludwig: Why 1-to-1?

Schiff: That was the low of the bear market of the 1930 and that was the low of the bear market of the 1970s. The Dow was worth one ounce of gold in 1932 and the Dow was worth one ounce of gold in 1980.

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2010 Market Swings

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Cartoon: Stock Market and Casinos

Stock Market Swings

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Current Bear Market

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S and P 500 Monthly Performance

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Four Bear Markets

Stock Market: Super Bulls and Super Bears

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Dow 10,000

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Bubbles Greenspan and the Significance of Dow 10,000

When the Dow scaled 10,000 in March of 1999, the stock market had been rallying for several years already. Just five years earlier, the Dow had breezed through the 5,000-level. Therefore, almost no one doubted that 10,000 would be a mere stepping stone to 15,000…or 20,000…or yes, even 36,000, as James Glassman and Kevin Hassett infamously predicted in their 1999 classic: Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market...

What went wrong?

The short answer is: Alan Greenspan. (The long answer is also Alan Greenspan). The former Chairman of the Federal Reserve nurtured an epic financial bubble during most of his 19-year reign...

What does this condensed and biased portrayal of history have to do with Dow 10,000? Just this: without easy credit, and the mania it spawned, Dow 10,000 would not have been possible. When the Dow first reached that magical level in 1999, the blue chip index was trading hands for about 28 times earnings – its highest valuation in 70 years.

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Dow 10,000

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Recovery?

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Stock Market: Good Year, Bad Decade

For the year:

Dow 18%
S&P500 23.5%
Nasdaq Comp 44%

For the Decade:

Dow -8.34%
S&P500 -0.9%
Nasdaq Comp -44.2%

“It’s been a decade of delusion,” said Richard Tedlow, professor of business administration of Harvard Business School in Cambridge, Massachusetts. “In many ways, we’re worse off than the 1930s, we’ve created problems of moral hazard and we’re faced with an astounding public debt.”

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The Dow Hits 10,000

Stocks rallied Wednesday afternoon, with the Dow industrials briefly touching 10,000 for the first time in over a year, following better-than-expected quarterly profit reports from Intel and JPMorgan Chase.

The Dow Jones industrial average (INDU)rose as high as 10,001.58 with about 2-1/2 hours left in the session. It then stepped back slightly, to a gain of 128 points, or 1.3%, to 9,997.
The last time the Dow crossed 10,000 during a trading session was Oct. 7, 2008, when it briefly touched 10,124.03...

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Cartoon: The Stock Market is Gambling Especially in the Short Run

Stock Market Hits 2009 Highs

Stocks rallied Friday, with the Dow and S&P 500 closing at the highest point in nine months, after the July jobs report showed the smallest number of job cuts in nearly a year, adding to recovery hopes.

The Dow Jones industrial average (INDU) gained 114 points, or 1.2%, according to early tallies. The S&P 500 (SPX) index rose 13 points, or 1.3%. The Nasdaq composite (COMP) added 27 points, or 1.4%.

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Stocks Hit 9 Month Highs

Stocks surged Thursday, hitting their highest levels in nearly 9 months, as investors eyed the latest batch of better-than-expected profits and forecasts and a report that suggested the labor market is starting to stabilize.

The Dow Jones industrial average (INDU) rose 83 points, or 0.9%, ending at its best level since Nov. 4. It was also the highest close for the blue-chip index in 2009.

The S&P 500 (SPX) index added 11 points, or 1.2%, ending at its highest point since Nov. 4.

The Nasdaq composite (COMP) gained 16 points, or 0.8%, to reach its highest close since Oct. 1...

Friday brings the biggest economic report of the week, the first reading on second-quarter gross domestic product growth. GDP is expected to have shrank at a 1.5% annualized rate, according to forecasts. GDP shrank at a 5.5% annualized rate in the first quarter.

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