And they think racing punters are stupid!

[robert99]

From Bloomberg,<br>Some people don’t understand they don’t understand.<br>Even then, they stay in denial despite all the evidence.<br>Next year (or sometime way in the future) we will all be millionaires, meanwhile we are just about breaking even.<br>Horse racing prediction theories seem quite rational in comparison.

<br>`Dow 36,000′ Optimists, Unbowed, Say Market Still Headed Higher

By Demian McLean

Oct. 24 (Bloomberg) — James Glassman says his seven-year- old prediction that the Dow Jones Industrial Average will rise to 36,000 wasn’t wrong, just early. :biggrin:

Two years after Glassman and co-author Kevin Hassett published their theory, the Dow average had sunk 29 percent. Their Dow 36,000,” a New York Times bestseller, and Charles Kadlec’s Dow 100,000” became metaphors for the investing excesses of the late 1990s. The two books were released within a month of each other in late 1999.

Anyone who followed their advice in 2000 got their butts handed to them,” said Barry Ritholtz, chief investment officer of Ritholtz Capital Partners in New York, which manages about $100 million. These guys come out of the woodwork when society is foaming at the mouth and receptive to these things.” :biggrin:

The Dow has since recovered and set a record, rising above 12,000 last week in a four-year bull market. The surge has improved some portfolios and may eventually do the same for the reputations of the authors, who stand by their forecasts.

I’m more confident today than I was five years ago that we’re in the early days of prosperity and the Dow will reach 100,000 by the mid-2020s,” said Kadlec, 60, managing director at closely held J&W Seligman & Co. in New York. The company manages more than $19 billion. :o

Glassman, 59, defends Dow 36,000’s” original premise as well. The prediction — that the Dow would triple by 2005 — is still valid, he says, although he’s pushed the deadline out to 2021. :biggrin:

Investors who bought the Dow’s 30 stocks in October 1999, when the book was published, waited more than four years to pull even. From the bull market peak reached four months after it came out to the bear market low of Oct. 9, 2002, the average lost 38 percent.

Still Relevant

Glassman and Kadlec say their out-of-print books, offered for sale on Amazon.com for as little as one cent, are still relevant. :biggrin:

Dow 36,000” held that stocks were safer than bonds over the long term. When investors recognized this, the Dow would triple in value, the authors wrote. :biggrin:

There’s nothing that’s occurred over the past few years that’s changed our minds about the original thesis,” said Glassman, who writes a syndicated investing column and is a resident fellow at the American Enterprise Institute, a Washington-based think tank. :o

The Dow is a price-weighted average of 30 companies that are among the biggest in their industries. Its concentration of industrial companies makes it a narrower gauge than the Standard & Poor’s 500 Index.

Faster Pace

The average has risen in value by about 5 percent a year since 1928, although that pace has more than doubled to 12 percent during the past three decades. With a 2021 deadline, Glassman’s prediction of 36,000 would require the Dow to grow by 7.6 percent annually.

When you consider the market has historically doubled every seven to 10 years, that’s not really going out on a limb,” said Barry James, who oversees $1.8 billion as chief investment strategist at James Investment Research Inc. in Xenia, Ohio.

Hassett, 44, the director of economic policy studies at AEI and a former Federal Reserve economist, said the book describes a new way of valuing stocks. I’ve never been about target dates,” he said. Hassett writes a syndicated column distributed by Bloomberg News.

The co-authors based their original forecast on work by Jeremy Siegel, a professor of finance at the University of Pennsylvania’s Wharton School. :biggrin:

Siegel had noted that since the early 1800s, equities had never offered a negative return, after inflation, if held for 17 years or more. To Glassman, that meant stocks were a safe bet for long-term investors if they could stomach short-run volatility.

`Very Scary’

One of lessons of the 12,000 mark is that over the long term, stocks are remarkably consistent,” Glassman said. In the short term, stocks are very, very scary.”

Kadlec’s book pointed to several trends he said should spur a climb to 100,000 by 2020: higher productivity, baby boomers’ investments, lower taxes, mild inflation and an absence of war. Except for the latter, most of those trends have held, Kadlec says today.

The extraordinary thing is the markets’ resilience in the face of the terrorist threat,” Kadlec said. We could have gone down a much darker path.”

To reach 100,000 by 2025, the Dow needs to rise by about 12 percent annually.

As for their personal portfolios, Glassman and Kadlec mostly waited out the bear market rather than take losses.

I’m very diversified,” Glassman said. I was down 20 percent in some years, but I put more money in. I’ve done pretty well.” :biggrin:

At the end of 2002, Kadlec was down about 40 percent from his 1999 high, and by 2003 was almost even.” :biggrin:

In late 2004, the same portfolio was up, somewhere in the teens,” he said. I followed my own advice.” :o

[stevedvg]

The two books were released within a month of each other in late 1999.

That’s typical.

At a market top, predictions are made that are extremely optimistic (euphoric) and say that the good times will last forever.

It’s just part of human nature.

Steve

[carlisle]

Hi

the bookmakers and stockbrokers, love it……….

byefrom<br>carlisle<br>

[RobinFromIreland]

Are there any articles/statistics on the size of the racing tipster industry i.e. money spent, most successful etc?

[carlisle]

Hi RobinFromIreland

http://www.relayline.com keep some stats on tipster.

byefrom<br>carlisle<br>

[robert99]

That link can’t be right information. :o <br>Dear old Nick Mordin is top tipster for October with £429.13 profit at SP to £10 stake.

[stevedvg]

http://www.relayline.com keep some stats on tipster.

Those stats are shocking.

A bunch of tipsters who have somehow managed to achieve an average profits of -36%.

I’m off to start a tipping service!

Steve

PS Mordin and Winstanley both in profit. This is one hell of a month!<br>

[carlisle]

Hi

Nick Mordin is, in his own way, inspirational.

Steady……

Finally sounds like he has made his customers some money.

byefrom<br>carlisle<br>

[Author]

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