| Just a Number |
15 December 2003
|
Dow Holds Above 10,000
The DJIA closed above 10,000 last week for the first time in almost two years. Having retraced all that it has lost, the stock market appears to be ready to go higher. Traders and investors, though, have nothing like the enthusiasm they had back in 1999 when five figures was first reached. Put them down as older and wiser.
Back in 1999, an entire generation of traders and investors had never seen a bear market. There were a number of people, a great many, who didn't realize that markets go down as well as up -- often going farther and faster down than they ever do going up.
Now, back at 10K and change, the mood in lower Manhattan is cautious despite the recovery in prices. The issue in 1999 was whether the peak would be at 15,000 or 20,000 -- 36,000 was even mentioned by otherwise serious people. Now, the worry is whether year-end profit-taking will push it back below the magic figure of 10,000.
The number is the same, though. It is the market's perception that has changed. That is the important thing about markets. Economists, business "experts" and statisticians will argue that markets are driven by supply and demand. They are not. They are driven by greed and fear. In 1999, greed over-rode fear to bring the DJIA to the 10K level. Now, fear is likely to weigh on any attempt to bring a new high to the Dow. The excessive exuberance is gone. Actually, all the exuberance is gone.
Home