(Of course, the guy is in the business of selling gold and silver, so take that into account)
the dow in terms of computer chips has exploded.
but the dow in terms of uranium is horrible.
of course the euro in terms of uranium is horrible, and gold in terms of uranium is horrible, and crude oil in terms of uranium is horrible.
the real measure of the Dow, or the Nasdaq, or the S&P 500 is not in oil or in uranium, it's in dollars. just like the real measure of the EU exchanges is in euros.
what you say is clever but obfuscating.
Please explain to me how can this be obfuscating on European Tribune?
I'm curious, thanks!
Over the last ten years (apr1997-apr2007), european buying in STOXX50E got slightly better euro returns than if they invested in NASDAQ (2.0x vs 1.9x). I did not try wider indexes.
I think that Bush's administration did a lot (if not everything) to increase "demand" for speculative stocks and decrease demand for dollar. Oh yeah, that's what they are preaching - supply-side economy, push all the money into stocks.
The Dow is, as you say, less speculative. It's essentially the big dogs in American business. If you want to know where America is headed, though, the S&P and NASDAQ are probably the better choices, given the larger number of companies.
DJIA is where you dump your money when you want to play a conservative game, because people are always going to buy things from Wal-Mart and Johnson & Johnson. It's more stable, whereas NASDAQ is all over the place. NASDAQ companies are often engaged in fiercely competitive markets and can get tossed around like it's nobody's business. Intel and AMD come to mind. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
Expressing the Dow in euros is a lot more relevant to us here in Europe - and definitely legitimate and meaningful in terms of "value". The fact that the dollar has lost 40% of its value against the euro over the period has to mean something, right?
I mean, market cannot be that wrong? In the long run, we're all dead. John Maynard Keynes
you can cherry pick dates to prove anything you want on returns on the American stock markets, since stock markets have cycles, though the long term trend is up. The Dow was 10791 at the beginning of the decade, which was Jan 2, 2001, so it is 21.6% higher today, six years later, and that is definitely lower than the longer term growth figures. If you chose January 2000 the returns would be far less. If you chose 1995 they would be far better. The long term returns from US equities are about 10% nominal and 7% real.
But the US economy is incredibly strong in recent times. There has been one very minor recession since 1991, which is an incredible period of prosperity, particularly thinking of the challenges of the tech wreck, 9/11, a poorly chosen and poorly run war in Iraq,,,,just to pick a few.
the "natural" value unit should be related to your assets/income and your expenses. So pricing things in oil, or in Euros, makes sense depending on who you are, where you are and what you do.
but managing in oil or in gold does not make sense to me, nor does managing your affairs in cans of soup or pasta, as your referenced article points out.
