Do you still have your commemorative baseball cap?
Seeing the Dow Industrials closing almost exactly at 10,000 today reminded me of a raging debate more than ten years ago.
As some of my buds from the Colorado Longwaves group (George Ure, Rick Ackerman and Tom Drake to name a few) may recall, Peter Eliades pointed out during the first run-up to to Dow 10,000 that the new digit Dow levels had historically proven to be powerful attractors that later turned into nearly insurmountable resting points.
His history of Dow 1,000 (which served as a nearly impenetrable barrier from the mid-60’s to the early 80’s) showed that it turned into almost impossible gravitational attraction whenever the Dow went above 1,000 for nearly 15 years.
Peter even shared with us the incredible number of years it took to permanently leave Dow 100 behind after first crossing it. This chart, copied from Wikipedia, shows the market first trading near Dow 100 during World War 1, and that it had its last visit to that very round number in World War 2, roughly 25 years later.
Peter E. caught an enormous amount of flack from the bulls in the crowd as Dow 10K was rapidly replaced by Dow 11K, Dow 12K and so on. Economists who still expect us to take them seriously (eg James Glassman and Kevin Hasset, both Senior Fellows of the American Enterprise Institute) proudly published treatises with improbable titles like Dow 36,000.
Laughing last and best, I imagine, Peter has proved the power of “magic” numbers to me.