Finance

THE GREATER FOOL

Back in 1958 we had an economic professor at B.U. tell the class that not one student in that class would live long enough to see the Dow hit 5000.  I am still here.

DJIA Milestones

Milestone Date Time
1,000 November 14, 1972 76 Years
2,000 January 8, 1987 14 Years
3,000 April 17, 1991 4 Years
4,000 February 23, 1985 4 Years
5,000 November 21, 1995 9 Months
6,000 October 14, 1996 11 Months
7,000 February 13, 1997 4 Months
8,000 July 16, 1997 5 Months
9,000 April 6, 1998 9 Months
10,000 March 29, 1999 12 Months
11,000 May 3, 1999 1 Month
12,000 October 19, 2006 7 Years, 5 Months
13,000 April 25, 2007 6 Months
14,000 July 17, 2007 3 Months
15,000 May 7, 2013 5 Years, 10 Months
16,000 November 18, 2013 6 Months
17,000 July 3, 2014 8 Months
18,000
19,000 December 23, 2014 5 Months

76 Years to hit 1000 and accelerating as shown above, hitting 5000  in 95.  Is there anything beyond the greater fool in the casino causing this.  Out side of IPO’S not one cent in a stock sale  goes to the corporation the stock represents.  Some small number of firms do grant small dividends.  Real gains come from buying at X,  expecting in the reasonable future to sell at X +.  The buyer at X+ expects to sell later to the greater fool at X++.  Corporate performance is the sham used to justify the increasing price.  Most corporations are interested only in quarterly performance and stock options; and little to nothing of earnings are ever shared with the stock holder.

They have come up with great ideas to play the casino, Hedge Funds, swaps and other esoteric forms of making a buck.  In my opinion it is all smoke and mirrors, with no connection to reality.  To make it worse the game is often played on a rigged table or with stacked cards.

The house of cards can not stand forever, and it will not.  Who has the best seat in this game; your broker, who gets a commission on sales and buys.

Should every employee, since they really CREATE the profits get their share every quarter?

 

 

 

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