Glassman backs the Dow againStocktake: are markets over-invested?

“Dow 36,000 is attainable again.” So said James Glassman in a guest column for Bloomberg last week.

Glassman is co-author of Dow 36,000 , the infamous book published at the peak of the dotcom bubble in 1999. The Dow, then around 10,000, would hit 36,000 within three to five years, he said at the time. Instead, it collapsed, and hit 6,600 in 2009.

Now, the Dow, at over 14,400, is at all-time highs again. The market has rallied 117 per cent over the last four years, and a repeat performance would leave it just 16 per cent from 36,000, Glassman enthused.

In 1999, Glassman argued stocks could “quadruple tomorrow and still not be too high”. Fourteen years later, they are just over one-third of the magic 36,000 level, but he is unrepentant.

“We wrote our book before the September 11 attacks, the dot-com debacle, the 38 per cent decline in stocks in 2008, the ‘flash crash’ of 2010 that sent the Dow down 1,000 points in minutes, the Japanese tsunami and the euro crisis”, he said last week.