I had a look at the chart. It looks interesting. And something glares out at me...

He predicted a DOW of 30,000 (roughly) for 2003. We are NOWHERE near that number. If we continued his yellow line we would be chopping off a large section of purple block. And we're not talking a slight miss like the "under-cut" near 1993. We are talking about a DOW which is near 25% of what he predicted. That is a BIG miss.

If this is all supposed to be based on "necessary family spending" than small little outside influences shouldn't matter.

And doesn't following this model show that the followee is basing their investments on price of the stock and not the underlying business - which my original question was asking about.

Sure the DOW might go down (plummet, crash and burn, whatever.) But what about the underlying companies. Some of which should be experiencing growth during this same period...

Certain medical stocks.
Certain property stocks.

Being two just examples.

I recall you even mentioning your stocks going up while the index fell.

So your experience shows certain underlying business are not effected by the index.

His model is so way off the mark it is not even funny.

And we haven't even thrown into the mix the idea that as soon as you know about something, the outcome changes because your actions change thanks to the new information.

So with your experience proving otherwise and his so totally wrong prediction, what stock/faith/reliability can we place in anything else he predicts from this point on?

Wouldn't the smarter thing be to study the stock market from the 1930s to find out which stocks did better than the rest during such a tumultuous time? Because if the economy of today is going to echo the end of the roaring 20s, doesn't it stand to reason the same companies that did well then will do well now - after all, human behavior doesn't really change.

Thoughts?

Michael Ross

I am sensing the need for a simple book to explain "Everything you need to know about the stock and bond market". Stockmarket for dummies?