Dow 20,000 !!
 |
| <image credit to money.cnn.com> |
This has become the headline news for major financial newspapers
or webs, DOW Index finally broke through the psychological level of resistance
of 20,000.
As for me, although it’s a milestone it just a “figure” without
looking into the fundamental or valuation of the market.
You may find below news interesting to read :
From CNBC: Dow
20,000: Its insignificance may rival its importance (click )
From The New York
Times: The Dow Hit 20,000. Now What? ( Click )
From CNN/ Money : Boom: Dow hits 20,000 for the first time ever
(click )
From Bloomberg
: Does Dow 20,000 Mean It's Time to Get Out? ( click
)
But one of the articles caught my attention as they described the numbers of days
it took for Dow to climb from a thousand to another thousand levels.
Dow clambers above 20,000 —
marks 2nd-fastest run to a milestone in history ( Click here for full story)
 |
| image credit to marketwatch.com |
Did you spot the
problem with these figures?
As I mentioned before in my blog
post about: "Lies, damned lies, statistics
! “(click
), we need
to interpret and analyse any figure given or presented to us in order to discover more about it. Remember to take all the "facts or statement " given with "a grain of salt".
Anyway, while everyone seems happy with
DOW close above 20,000, let’s celebrate our Lunar New Year and may this New
Year bring you “Good
luck, Prosperity, Joy and Contentment. “
Not sure . Is it the bottom row ..To gain 1000 to reach 1000 take 21652 or
ReplyDeleteIt's talking about absolute but we should be concerned about percentage rise ?
Hi SGDividens,
DeleteYes! You are right ...is about absolute value not about the points...1000 increase when index at 1000 level,we are talking about 100% increase in market cap...while from 19000 to 20000, market need to increase the value by slightly more than 5%... :-)
Cheers !
Hi SGDividends & STE,
ReplyDeleteNot only that, before we even look at the % changes, we have to adjust all the figures for inflation.
Obviously in an environment of high inflation, the increase would be much more rapid than if it's an environment of deflation.
So all "real" changes, both on the gain or loss side, have to be adjusted for the inflation during the said periods under review.
Cheers
TTI
Hi TTI,
DeleteWelcome back from your holiday!! I still trying to figure out where is the place of the photo you have posted in your blog post 😀😀. Yah! You are right ...we will need to adjust for inflation on these figures as well... $1 20 years ago may not same as today’s value..ie NPV..👍👍
Cheers!! Wishing you and your family a very Happy and Prosperous CNY!