Letter to the Editor
January 8, 2013
The following is in response to our interview, Jeremy Siegel on ‘Dow 15,000,’ which was published on December 18:
I loved your article based on an interview with Jeremy Siegel, the book vendor. In it he said:
We’re going up. We could get another 15 to 20%. I’m on record saying that I think there is an overwhelming probability that we’re going to get Dow 15,000 by the end of next year, so if the current level is 13,180, that’s a 14% rise. There is a possibility – if we get some good work done on the entitlements, if we set the tax rates appropriately – with the housing recovery, it’s very possible to get 25% next year. That would certainly be a very-good-case scenario.
To his wishes for good work on entitlements and appropriate tax rates I will add: “when pigs can fly.” Those are naïve statements made by one who wants to sell books on “Dow 15,000.”
The wonderful stock market performance that Siegel predicted ended on March 31 of 2012. The S&P 500 started 2012 at 1,257.60 and was up more than 11% to 1,408.47 on March 31. On December 31, as I write this it is trading at 1,406.36, down two points in nine months.
Whether or not the market moves higher in 2013, this has been the worst environment for investors since I began investing in the market in 1960. It is based on the Federal Reserve flooding the market with paper, forcing interest rates to zero and leaving no alternative but buying stocks that are then blasted higher and lower by the pronouncements of politicians.
As Will Rogers pointed out the last time the government was taking advantage of us, “the best way to double your money is to fold it in half and put it back in your pocket.”
Fred Goodman, CFP