Is 10000 Really That Big of a Deal?

23 October 2009

Last week, the media was all over the fact that the Dow had surpassed 10,000. You cannot doubt the impressive run that the Dow has had since closing at 6547 on March 9, 2009.

But is 10,000 still an impressive threshold?

The Dow first closed above 10,000 on March 29, 1999. That’s over a decade ago for those of you who are counting. Not to mention that the Dow has crossed the 10,000 point mark more than a dozen times over the past 10 years.

Psychological threshold – yes.
Impressive – not so much.

3 Responses to “Is 10000 Really That Big of a Deal?”

  1. Lonnie Fogel

    The Dow is significant gauge for the general public. The S&P 500 is a much better gauge of the market.

    As for what comes next, probably a pause at the least, some year-end tax selling, and perhaps a frightful bout of stagflation if the dollar loses its status as the world’s primary currrency as America continues to print money to cover its bills.

  2. John Hefferon

    First, it’s a price-weighted average of just 30 stocks, meaning a $1 move in a $10 stock and $100 stock have the same impact. The DJIA’s meaning/significance is more historical in nature.

    Also, the US Dollar has lost almost 1/3 of its value since 1999, so the current 10,000 isn’t anywhere near the same economic value of the previous 10,000.

    Anyone with a “Dow 10,000″ party hat needs to rethink things.

  3. Anil Dilawri

    Gentlemen,

    You make some pretty decent points.

    Thanks for sharing.

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