NewCo Daily Aug 2 2017
Why are markets ignoring political chaos and merrily pushing upward? Plus P&G fights raiders, and Birkenstock goes ballistic.
Back in the go-go days of the first dot-com bubble, a pair of economic analysts wrote what became that era’s most discredited book: Dow 36,000. With the markets already at historic heights (the Dow reached a peak of 11,700 or so in early 2000, before crashing back to earth later that year), the duo predicted a three-fold rise to 36,000 in just a few short years.
The authors doubled down on their bet by publicly wagering that the index would be closer to 36,000 than 10,000 by the year 2010. The Dow would have had to cross 23,000 for them to have won. Thanks to the great recession of 2009, they lost that bet, bigly.
But just yesterday, the Dow flirted with 22,000, setting another record high amongst a string of record highs and prompting a slew of chin stroking pieces on the state of our financial markets. The New York Times set the tone, pointing out that “the president’s promise to slash regulations and cut taxes — even if unfulfilled — has stoked long-dormant animal spirits among investors. That corporate earnings are excelling and the global economy is growing faster than many expected has only added to the bullish vibe.”
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