Hirsch Sees 'Super Boom' With Dow Hitting 38,820

September 27, 2010 4:49 PM EDT
The Dow Jones industrial average will hit 38,820 according to Jeffery Hirsch, editor in chief of the "Stock Trader’s Almanac," the catch is investors will have to wait until 2025 when the markets will be eight years into a super boom.

Hirsch believes that the majority of the 259 percent surge will not come until 2017.

"All previous major economic booms and secular bull markets were driven by peace, inflation from war and crisis spending, and ubiquitous enabling technologies that created major cultural paradigm shifts and sustained prosperity," he wrote in a press release sent with the 44th edition of the book.

To say the number is far-fetched may be an understatement, as the DJIA would have to experience 9.4 percent growth per year. But that performance is not well-ahead of the stock market's performance pre-2000.

One argument for this level to be attainable is that the entire world's gross domestic product is 90 percent larger than in was in 2000 according to World bank data, while the Dow is still around the same level it was at the turn of the century.

With this fact in mind, the Dow would only have to experience around a 5.2 percent annual increase over for the 25 years following 2000.

"Government spending is on the rise. This has always led to massive jumps in inflation eventually. We expect that it will happen again over the next several years. Following the major wars in the 20th century involving the United States, inflation kicked in and the stock market made 500+ percent moves." Hirsch added.


Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

General News, Insiders' Blog

Related Entities

Stock Trader's Almanac