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Dow 10,000 and “Buy & Hold”
Posted By Barry Ritholtz On November 7, 2003 @ 8:45 am In Finance | Comments Disabled
Follow up to “The Very Very Long Term ”
A few articles were the prime motiviation to my looking at a logorithmic DJIA chart  going back nearly a century. The first was a WSJ article, mistitled “Investors Battle Curse of 10000 .” To me, its not that any given round number is cursed; Rather, its that periods following long Bull markets tend to be a sideways affair. That’s how in most of the prior excesses — valuation, capacity, governance — get worked off. (Add in a major war just to be historically parallel).
Additionally, the geometric chart the WSJ used (see below) presents a very misleading picture. When presenting a 40 year plus period, a logorithmic chart looks far less “toppy.”
The second article — “Long-Term Investing Quietly Gets Vindicated Again ” really pissed me off. Its a classic “Buy & Hold” piece of nonsense that you only will see AFTER a nice long run in the indices. You will hardly ever read this tripe in the midst of a Bear market, for a variety of psychological and editorial reasons.
double click for full image
Chart courtesy of: WSJ 
Investors Battle Curse of 10000 
by E.S. Browning, WSJ, October 20, 2003
Long-Term Investing Quietly Gets Vindicated Again 
Chet Currier, Bloomberg
October 17, 2003
Article printed from The Big Picture: http://www.ritholtz.com/blog
URL to article: http://www.ritholtz.com/blog/2003/11/dow-10000-and-buy-hold/
URLs in this post:
 The Very Very Long Term: http://bigpicture.typepad.com/comments/2003/11/looking_at_the_.html
 logorithmic DJIA chart: http://bigpicture.typepad.com/comments/100_year_dow_periods.html
 Investors Battle Curse of 10000: http://online.wsj.com/article/0,,SB106639890121763600,00.html
 Long-Term Investing Quietly Gets Vindicated Again: http://quote.bloomberg.com/apps/news?pid=10000039&sid=anQ37dD6l1ys&refer=columnist_currier
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