If the dow tanks, I can,t see how it will rise to pre-tank levels. The dow rose to the present levels not because companies are profitable and paying lofty dividends. The dow got to this level by people gambling that they could sell their stock to someone else at a higher price than they paid for it. After it tanks and people get burned, where will the shyters find pigeons that are not broke or shy? This is without one considering what financial havok the Y2k bug will wreak. To think that the dow will recover in a year or two without some radical economic policy changes is a bottle, pipe, pill and syringe dream.

-- oh (comeon@wakeup.com), October 14, 1999

Answers

Oh,

What "radical economic policy changes" do you have in mind?

-- mike (maples@voy.net), October 14, 1999.

Lets just say because of pessimism and other world wide factors the DOW drops down to 7500 or so by the New Year. Even if Y2k comes along and slaps us around for a month the market will ALWAYS be looking for the slightest sign of a turnaround. The minute a uptick in the economy or ability to tackle Y2k problems is seen, the market will start rising again. It always does. Its greed. People want to get there before anyone else so they all want to buy. I remember the '87 crash vividly, I was working Wall St the evening (4pm to midnight) when it happened. Looked horrible, but a few days later it started going back up and everyone only cared about finding buying oportunities.

Remember right before the Gulf War started there was so much pessimism and the market started wobbling. The war started and the market started to shoot up like a rocket. As soon as investors realized it wasnt going to be TEOTWAWKI they started buying again.

-- hamster (hamster@mycage.com), October 14, 1999.

and, if you were invested in 1929, it took you until 1945 or thereabouts to recover, and that's if all the companies you held stock in actually survivied.

how many people lived to see their stocks regain what they'd lost?

some never did recover.......what do you do with 1000 shares of Huppmobile or some other out-of-business car maker?

-- no, (this@isn't.1987), October 14, 1999.

1929 recovered in 3 months. the 1930 "soft landing" slide was much more indicative of the situation. The slide is why it took 15 years to come back, and there was a war to help.

C

-- Chuck, a night driver (rienzoo@en.com), October 14, 1999.

You can't use history to determine what the market will do after 1-1-2000. It's a new type of ballgame that no one has ever played before!

-- Jim (jwworden@efortress.com), October 14, 1999.

Chuck,

I don't understand your statement that 1929 recovered in 3 months. The Dow topped on 9/3/29 at 381.17 and ended the year at 248.48, for a drop of */-35% in 4 months. It fell another 35% or so in 1930.

-- mike (maples@voy.net), October 14, 1999.

The DJ average closed near 1000 in early 1966, and did not move decisively above 1000 until early 1983. Thus the market was essentially flat for 17 years. The DJ average did not recover to its 1929 high until about 25 years later.

-- Danny (dcox@ix.netcom.com), October 15, 1999.