

Dow ends above 16,000 for first time as stocks jump - werkmeister
http://www.marketwatch.com/story/us-stocks-rise-after-jobless-claims-drop-2013-11-21?dist=tbeforebell

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tghw
Breaking News: The Dow goes above an arbitrary number!

I know we as humans have a tendency to assign meaning to things like this, but
the truth is it doesn't make much difference.

Especially the Dow. Stop paying attention to it. It's a terrible measure of
anything but what the Dow weightings are. First, it's only 30 companies, which
is a tiny slice of the economy. Second, it's based on share price, not market
cap, so companies that split less frequently tend to have a much larger effect
on the average. Finally, it's not adjusted for inflation, so all of this
"first time ever" business is meaningless.

If you're going to use a common index, at least use the S&P 500. Or better
yet, the Wilshire 5000.

~~~
cylinder
It matters because it matters to people. It's completely arbitrary, but
sometimes humans just work that way. Like it or not, there are going to be
individuals watching the nightly news tonight and will hear about the Dow
crossing 16,000, and they will think "Wow, it's going up, I need to get in on
this," and/or it will affect their confidence as consumers going into an
important time of year for consumer spending.

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dev1n
The non-energy activity sector of the economy has been growing at a rate much
faster than the physical, energy-related activity sector of the economy. This
type of decoupling is terrible and can only last for so long. I would suggest
checking out Tom Murphy's blog Do The Math where he examines this decoupling
in awesome depth [1]

[1]: [http://physics.ucsd.edu/do-the-math/2011/07/can-economic-
gro...](http://physics.ucsd.edu/do-the-math/2011/07/can-economic-growth-last/)

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hansjorg
An interesting article about the Dow Jones Industrial Average by Adam
Davidson: Why Do We Still Care About the Dow?

[http://www.nytimes.com/2012/02/12/magazine/dow-jones-
problem...](http://www.nytimes.com/2012/02/12/magazine/dow-jones-
problems.html?pagewanted=all&_r=0)

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iYuzo
Forget the Dow. The point is that the markets are doing well, despite all the
negative coverage it gets from the media and so called pundits. Corporate
profits are near all time highs. Companies are becoming more lean and mean.
Innovation and the proliferation of new technology is shifting the paradigms
of every industry at an unprecedented rate. Europe is finally starting to see
a bottom. China has enormous potential of becoming a consumer market not only
for itself but for the rest of the world. South America (Brazil mainly) is
taming inflation and spurring healthier economic growth. I'm not going to go
through the list of countries that are doing better than they were 3-4 years
ago, the BRIICS are doing better, to say the least. The trailing P/E is at
17.6 which is below an average of 18.7 going back to 1956. Of course the
markets are going experience more volatility and turbulence at times, but
that's inherent. The markets can retrace 10%, which seems to be the number
everyone is focused on, sometime in the next 3-6 months. The market can also
run up 20% in 4 months and retrace 10% in the 5th month. How are you going to
win that game?

~~~
dragonwriter
> The point is that the markets are doing well, despite all the negative
> coverage it gets from the media and so called pundits.

I've seen negative coverage of the _economy_ more than the (commodity and
equity) _markets_. The two aren't the same thing.

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iYuzo
The equity markets are the fastest economic indicator. Yes there is a dicatomy
between the economy and the equity markets but they should not be separated.
Also the it seems like you might not be watching financial news often enough
because the most common phrase is "we are seeing growth but at extremely slow
levels," "the economy is still weak," and many more that have a similar
undertone.

~~~
dragonwriter
I don't think you read what I wrote: I noted that I see negative news about
the _economy_ more than negative news about the _financial markets_.

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kb120
If stocks are doing so well. why does the Fed continue easing polices?
Wouldn't now be an OK time to at least cut the monthly amount?

~~~
kmfrk
The index also isn't adjusted for inflation, I believe.

~~~
hansjorg
It isn't: [http://www.npr.org/blogs/money/2013/03/05/173515767/the-
dow-...](http://www.npr.org/blogs/money/2013/03/05/173515767/the-dow-isnt-
really-at-a-record-high-and-it-wouldnt-matter-if-it-were)

