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I can not comment on the DJIA forecast but I do know this:
6/3/92 to 6/3/02
DJIA went from 3,406.99 to 9,709.79 or up 185% annualized at 11.04%
Nas went from 589.93 to 1,562.56 or up 164.8% annualized at 10.23%
S&P 500 went from 414.59 to 1040.68 or up 151.01% annualized at 9.64%
Wilshire 500 went from 4,024.34 to 9,865.09 or up 145.14% annualized
at 9.38%
Inflation [CPI] went from 140.20 to 179.80 or up 28.25% annualized at
2.52%
It is entirely within some realm of possibility that the worst case
scenario on the DJIA may play out but one must look at the odds. From
studies I recall major bear markets can last up to 17 years and we
have not had too many of those. Most recent bear markets have been of
shorter duration as low as 9 months to 3 years.
When pessimism is that great it is an extreme. There are 3 things I
have learned that I think apply here.
1. Do not fight the Fed
2. Do not fight the trend
3. Beware the crowd at extremes.
I give credit to Wachovia for the bulk of this info.
Sincerely,
John
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