graphMath Dunces

“It seems we’re somewhat ahead of schedule, but I think we’re still on track for Dow 20,000 by the end of the decade.”

–Seth Masters, Chief Investment Office –Bernstein Global Wealth Management; “Forecast for a 20,000 Dow Still Holds”; The NYT (May 11, 2013)

The leading contender for dumb article of the day (decade?) would be the one quoted from above.

That’s because “predicting” that the Dow will reach 20,000 in the next 7 years is no prediction at all:  it merely extrapolates 5% annual returns between now and then.

Who knows, with a couple more rounds of Quantitative Easing, perhaps the Dow will hit that mark by December.

This December.

Using the same dim-witted math, I hereby predict that the Dow will cross 100,000 — by the year 2053.

That’s where it will be if it simply averages 5% annual returns the next 40 years.

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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