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Dow to Hit 17,000 Says Wharton Business Professor; Will It Really Happen This Year?
Be prepared for the next great transfer of wealth. Buy physical silver and storable food.
investmentcontrarians.com / By George Leong / June 5, 2013
There are some signs the stock market is developing some froth. Besides a growing disconnect between the record levels of the stock market and the underlying economic and business fundamentals, we are witnessing predictions that remind me of the froth in 2000.
The latest comments on the stock market emerged from Jeremy Siegel from the Wharton School of business; in an interview on CNBC, Siegel said that the long-term upward trend remains in place, and he confidently predicted the Dow Jones Industrial Average will hit 17,000 this year. (Source: Navarro, B.J., “Jeremy Siegel Still Sees Dow 17,000,” CNBC web site, May 31, 2013.)
While I respect the work of Mr. Siegel, I really don’t agree with his prediction on the stock market. I actually think that while the Dow will likely trade at 17,000 at some point in the future, it’s not going to be this year. Maybe that will happen in 2014, but there are currently too many fundamental uncertainties to ascertain that. Siegel is projecting 18,000 by 2014, which is more plausible, as long as the status quo remains intact with the economy and interest rates.
Let’s take a look at Siegel’s estimate for this year, and let’s assume that it will be achievable in this type of momentum stock market—you never know; reasoning is often pushed aside.
If the Dow reaches 17,000, the advance would be 29.73%—nearly twice the current gain of around 15.35% at the end of May. Reaching that advance will not be easy, though. Since 1975, there have only been two years out of the 38 years (5.36% of the time) when the Dow reported an advance greater than 29.73%: 1975 at 38.32%, and 1995 at 33.45%. In other words, it’s a long shot.
Thanks to BrotherJohnF
Source: http://silveristhenew.com/2013/06/05/dow-to-hit-17000-says-wharton-business-professor-will-it-really-happen-this-year/
