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Dow 20,000: With Charles Smith and Gordon Long

  • Written by Syndicated Publisher No Comments Comments
    October 25, 2013

    I recently had the pleasure of chatting with Gordon T. Long, Founder of Macro Analytics, and Charles Hugh Smith, editor of “Of Two Minds”, about the possibility of the “Dow 20,000.”  Now, before you dismiss the idea entirely as “crazy talk” it is always important to consider both sides of the investment argument.   It is very easy to become “convicted” to a particular idea but by doing so we run the risk of “confirmation bias” wherein we fail to analyze contradicting evidence.  However, by analyzing the opposing argument, we can understand where risks lay within our current investment thesis.  By understanding the risks that exist we can more effectively manage them.

    Gordon, Charles and I share a discussion about the possibility of “Dow 20,000” and the drivers that could get us there.  We also discuss the what I believe to the be the “real risk”which is the ever increasing possibility that we are moving into the next major asset bubble.  Even the much heralded Jack Bogle of Vanguard believes that there will be two more 50% crashes over the next decade.

    This is the introduction from the “Macro Analytics” website:

    “In Part I of this multi-part series we ask Lance Roberts whether he sees DOW 20,000 or DOW 5,000 ahead, and when?

    The economics and fundamentals overwhelmingly suggest the US equity market is now being driven solely by Federal Reserve liquidity injections.

    The only way Lance can see DOW 20,000 is to see the market as being in stage 3 of a classic ‘blow off’ market cycle:

    • Phase 1:  What Bull Market?  Just A Bounce Before The Next Crash.
    • Phase 2:  I Missed The Bottom So I Will Wait For A Pullback.
    • Phase 3:  Market Is Going Up Forever, Just Get On And Ride.

    He argues convincingly that Bull Markets don’t start from these levels and with these market metrics. His Economic Output Composite Index supports this view.

    Listen as Lance kicks-off this discussion with Charles Hugh Smith and Gordon T Long, who share their views as the three go around the table outlining out their respective views (Part II – Charles Hugh Smith and Gordon T Long).”

    I hope you enjoy it.

     

     

    Images: Flickr (licence attribution)

    About The Author

    Lance Roberts – Host of StreetTalk Live

    After having been in the investing world for more than 25 years from private banking and investment management to private and venture capital; Lance has pretty much “been there and done that” at one point or another. His common sense approach has appealed to audiences for over a decade and continues to grow each and every week.

    Lance is also the Chief Editor of the X-Report, a weekly subscriber based-newsletter that is distributed nationwide. The newsletter covers economic, political and market topics as they relate to the management portfolios. A daily financial blog, audio and video’s also keep members informed of the day’s events and how it impacts your money.

    Lance’s investment strategies and knowledge have been featured on Fox 26, CNBC, Fox Business News and Fox News. He has been quoted by a litany of publications from the Wall Street Journal, Reuters, The Washington Post all the way to TheStreet.com as well as on several of the nation’s biggest financial blogs such as the Pragmatic Capitalist, Zero Hedge and Seeking Alpha.
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