In the middle of the tech-stock mania, James K. Glassman, and Kevin Hassett, published their infamous book Dow 36,000. The New Strategy to Profit from the Upcoming Rise of Stock Market on October 1, 1999. Glassman and Hassett were the brunt of many jokes when the tech bubble burst in March 2000.
It’s true that I like and know Jim Glassman, and he was very generous to me during my career. But Jim and Kevin have forgotten a piece of Wall Street wisdom: it is fine to forecast a price, or to anticipate a date, but not both. The adage “Wall Street will remain irrational for as long as you stay solvent” is one that I have followed religiously.
In just 22 years since the book was published, the Dow Jones Industrial Average has risen to within shouting range of 36,000. After reading the book, I decided to go back and revisit it to gain a new perspective.
Before I started this project too seriously, luckily, I had done a quick Google search to see which Dow stocks were in place on October 1, 1999 compared with today. It was a pretty shocking answer.
There are only 13 Dow stocks that remain the same today as they were on October 1,1999. Four more stocks have similarities with that period due to mergers. In general, however, Dow components have changed by 50% over the past 22 years.
Here are some more interesting facts:
- Amgen is in: Amgen.com.
- Out : Alcoa (At&T), Eastman Kodak (Exxon), General Motors (General Motors), Hewlett-Packard, International Paper, Philip Morris, Sears Roebuck, United Technologies, and Union Carbide.
The committee responsible for making these decisions, which is not a SpaceX rocket scientists, has replaced, in essence, the most popular car from 1999 (Toyota Camry) with a Tesla.
It’s not the first time that it has been proven that historical perspectives of the stock market have no value. This is not a true Apple-to Apple comparison.
If the Dow Jones Industrial Average ever reaches 36,001, then you may hear other people revisiting the book. When you examine the engine, you may see an entire block of metal, or you might only find a frunk
