One thing's for sure: Dow 10,000 is meaningless. Like Dow 9,867, it's just a lonely number, no more important than the 9,999 that came before it.
What is important, though, is investor psychology. And it's hard to deny that a nice, cozy, round number like 10,000 gets people's attention and brings new interest to the market. That's why on Wednesday, we asked you what you thought awaited Wall Street after Dow 10,000. More than 5,000 of you responded, so it's worth analyzing what you had to say:
|
Question |
Percentage Picked |
|---|---|
|
Still Going Higher |
19% |
|
Expect a Big Correction |
27% |
|
Drift Back and Forth |
42% |
|
Don't Know/Don't Care |
12% |
Compare that to a similar poll of nearly 23,000 respondents we ran in early March, when Dow 5,000 was on people's minds:
|
Question |
Percentage Picked |
|---|---|
|
We're at or Near the Bottom |
11% |
|
Still Going Lower/Dow 5,000 |
78% |
|
Don't Know/Don't Care/Clinging to my Gold |
11% |
And almost exactly a year ago, with the Dow at 8,500, we asked how low it would go:
|
Question |
Percentage Picked |
|---|---|
|
Already Bottomed |
10% |
|
7,500 |
54% |
|
5,000 |
24% |
|
Lower than 4,250 |
6% |
|
Don't Know |
6% |
All that data leads us to the wholly unsurprising conclusion that most Fools aren't expecting nearly as much chaos going forward as they did over the past year. Now that the financial system's been talked down from the proverbial ledge, a bit more optimism is hardly unexpected.
Your Foolish opinions
Individually, some of your comments from the recent poll were downright bullish:
wenger2k: "at least among folks I talk to most are hoping for a pullback so they can get their money in at a better level. As long as this is true I don't see why we'll see more than 3 to 5% pullbacks. In order to see any sizable pullback, I believe there will have to be clear evidence that the reflation trade has overshot the new economy. The first part of the earnings season is indicating that the top line is starting to grow again which indicates to me that we're not quite yet at that mythical fair value level."
abientot2: "The recovery is on target, the predicted steps are being taken one by one, confusion is all around me, but in the end the steps will be taken. We are on target to continue a recovery in the economy and new highs in the stock market."
wenger2k (again): "Are you guys actually reading the earnings reports? Revenues' ARE recovering. Why does everyone continue to say that revenues aren't recovering its just not supported by facts. And I'm not just about talking about financials. Retailers are saying that customers are cautiously returning. And another example, look at [Intel's
"The people calling for a pullback provide no basis for their argument other than a very chicken little sounding 'we've come a really long way' which really isn't an argument at all."
And, of course, some remain rather skeptical:
Boomerchef: "The market is not reading the real temperature of the nation's financial health. It's 'irrational exuberance'."
NoMoeMoney: "The market crashed because the consumer was over extended. Now the Government is over extended. 10,000, 11,000, 12,000 what will it matter when a major portion of the population are unemployed, out of benefits and no longer able to feed their families? Better invest in companies that supply the riot police."
My view of the numbers
Me? I'm still a firm believer that the rally since March is solely a reversion to sensibility, not a leap into irrational expectations. Citigroup and Bank of America
That said, you can still find bargains if you look hard enough. UnitedHealth
Like any other point in history, it's a good time to buy high-quality companies at good prices. Luckily for you, you still can. That was true at Dow 14,000, it was true at Dow 6,600, and it's true today.
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