Dow Hits 20000 for First Time • Hacker News Board

Re: Dow Hits 20000 for First Time

#11

Post by redler » Wed, Jan 25, 2017, 4:22 PM UTC

scurvy wrote: post #5

pilom wrote: post #2

So what? The Dow is a terrible indicator of even how well the stock market or the economy as a whole is doing. It is price weighted instead of market cap weighted so smaller companies that released fewer shares at a higher price have more impact on the Dow than larger companies. http://www.npr.org/sections/money/2017/01/04/508261371/episo...

It's still important for the Dow Theorists (if there are any left).

Here's my favorite part of Dow Theory:

"Trends persist until a clear reversal occurs."

In other words, if you find yourself falling, you're no longer rising.

Useful.

Re: Dow Hits 20000 for First Time

#12

Post by cschneid » Wed, Jan 25, 2017, 4:24 PM UTC

Other people have covered how the Dow is a mediocre stock index. The other half is that 20k doesn't mean anything either. It's just a number calculated by the math-function of the index.

The psychology is mildly fun, just like a 50th birthday may be more celebrated than a 49th. Round numbers appeal to us. But 20k dow says nothing more about the state of the economy than the 19.9 dow did a few days ago.

Re: Dow Hits 20000 for First Time

#13

Post by nugget » Wed, Jan 25, 2017, 4:25 PM UTC

Remember when nearly the entire business media predicted that if Trump was elected the stock market would crash immediately?

Some of my smartest friends (at hedge funds) placed large bets mid to late 2016 that the market would decline. Now here we are.

The lesson isn't that Trump is awesome for the economy (maybe he is, maybe he isn't) or that the market won't crash tomorrow (maybe it will, maybe it won't) but rather that even the so-called experts are relatively clueless when it comes to financial timing. Remember Brexit? Same story. Good lessons for the rest of us trying to invest. If you want to learn more, read 'The Bogleheads Guide to Investing' [http://fave.co/2jpTKmf] which is an excellent place to start.

Re: Dow Hits 20000 for First Time

#14

Post by tomelders » Wed, Jan 25, 2017, 4:29 PM UTC

nugget wrote: post #13

Remember when nearly the entire business media predicted that if Trump was elected the stock market would crash immediately? Some of my smartest friends (at hedge funds) placed large bets mid to late 2016 that the market would decline. Now here we are. The lesson isn't that Trump is awesome for the economy (maybe he is, maybe he isn't) or that the market won't crash tomorrow (maybe it will, maybe it won't) but rather…

This is sort of the same sentiment that people have towards things like Bird Flu. It didn't happen, so the experts were wrong, and it was all a load of hot air. But in actual fact a lot of people behind the scenes worked very hard to make sure it didn't become a problem.

Re: Dow Hits 20000 for First Time

#15

Post by SlipperySlope » Wed, Jan 25, 2017, 4:29 PM UTC

Would be great for Republicans if this boom persists through the 2018 midterm elections.

When Trump's trade policies take hold there should be a rush to form manufacturing startups to make stuff in the USA for the industrial supply chain, e.g. power cords, circuit boards, paints, etc. I expect these to form in the traditional centers of manufacturing excellence - urban areas where minorities will enjoy relative job prospect improvements.

Re: Dow Hits 20000 for First Time

#16

Post by gcp » Wed, Jan 25, 2017, 4:30 PM UTC

tomelders wrote: post #14

nugget wrote: post #13

Remember when nearly the entire business media predicted that if Trump was elected the stock market would crash immediately? Some of my smartest friends (at hedge funds) placed large bets mid to late 2016 that the market would decline. Now here we are. The lesson isn't that Trump is awesome for the economy (maybe he is, maybe he isn't) or that the market won't crash tomorrow (maybe it will, maybe it won't) but rather…

This is sort of the same sentiment that people have towards things like Bird Flu. It didn't happen, so the experts were wrong, and it was all a load of hot air. But in actual fact a lot of people behind the scenes worked very hard to make sure it didn't become a problem.

Y2K doomsday etc.

Wasn't it expected that the markets would rise as soon as uncertainty about Trump started dropping off? Market pricing tries to look ahead.

Re: Dow Hits 20000 for First Time

#17

Post by jfabre » Wed, Jan 25, 2017, 4:31 PM UTC

tomelders wrote: post #14

nugget wrote: post #13

Remember when nearly the entire business media predicted that if Trump was elected the stock market would crash immediately? Some of my smartest friends (at hedge funds) placed large bets mid to late 2016 that the market would decline. Now here we are. The lesson isn't that Trump is awesome for the economy (maybe he is, maybe he isn't) or that the market won't crash tomorrow (maybe it will, maybe it won't) but rather…

This is sort of the same sentiment that people have towards things like Bird Flu. It didn't happen, so the experts were wrong, and it was all a load of hot air. But in actual fact a lot of people behind the scenes worked very hard to make sure it didn't become a problem.

Who worked behind the scene after the election to make sure that the economy doesn't crash?

Re: Dow Hits 20000 for First Time

#18

Post by nrjdhsbsid » Wed, Jan 25, 2017, 4:32 PM UTC

Trump for all his craziness is vehemently pro business. I know the whole tech crowd wants him to crash and burn but the stock market rising is no surprise to me.

Whether it's worth the damage done to the poor and the environment is yet to be seen.

Re: Dow Hits 20000 for First Time

#19

Post by jcfrei » Wed, Jan 25, 2017, 4:32 PM UTC

nugget wrote: post #13

Remember when nearly the entire business media predicted that if Trump was elected the stock market would crash immediately? Some of my smartest friends (at hedge funds) placed large bets mid to late 2016 that the market would decline. Now here we are. The lesson isn't that Trump is awesome for the economy (maybe he is, maybe he isn't) or that the market won't crash tomorrow (maybe it will, maybe it won't) but rather…

Brexit is a bad example because the predictions were accurate. If you are a foreign investor (your main currency being something other than GBP) and invested in the FTSE then the loss on your GBP was higher than your profit on the index. Slightly different story for UK based investors: While you made a profit on your FTSE ETF, those gains will to some extent be offset by a rise in inflation. Stocks are in general a good protection against higher inflation - which is exactly what is happening in the UK.

Re: Dow Hits 20000 for First Time

#20

Post by coldtea » Wed, Jan 25, 2017, 4:32 PM UTC

tomelders wrote: post #14

nugget wrote: post #13

Remember when nearly the entire business media predicted that if Trump was elected the stock market would crash immediately? Some of my smartest friends (at hedge funds) placed large bets mid to late 2016 that the market would decline. Now here we are. The lesson isn't that Trump is awesome for the economy (maybe he is, maybe he isn't) or that the market won't crash tomorrow (maybe it will, maybe it won't) but rather…

This is sort of the same sentiment that people have towards things like Bird Flu. It didn't happen, so the experts were wrong, and it was all a load of hot air. But in actual fact a lot of people behind the scenes worked very hard to make sure it didn't become a problem.

>But in actual fact a lot of people behind the scenes worked very hard to make sure it didn't become a problem.

Even more worked harder to sell useless drugs for the epidemic.