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Brett Arends' ROI
March 1, 2011, 12:01 a.m. EST
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By Brett Arends, MarketWatch
BOSTON (MarketWatch) "” Twelve years after publishing the infamous "Dow 36,000," Jim Glassman has finally explained what went wrong.
Turns out, it wasn't his fault.
"What happened?" he asks, in his new book "The Safety Net." Easy. "The world changed."
All eyes will be on Apple's Wednesday event, at which the company is widely expected to unveil a new version of the iPad. WSJ's Don Clark and the digits team tell you what to expect from the new version of the iPad.
The world has become "much, much riskier" than it was in 1999, he says. Look at 9/11. Look at "the sudden and unprecedented collapse of home values, the "?flash crash' of May 2010, the BP /quotes/comstock/13*!bp/quotes/nls/bp (BP 48.47, +0.37, +0.77%) oil blowout, the shutdown of European air traffic for weeks by an ash cloud, and many more, including, of course, the 2008-2009 catastrophe in the markets."
Meanwhile, he says, America is in decline. Growth rates are slowing "” partly because of our growing preference for "European-style security," which during his book he blames on growing American "decadence."
"The French, Italians, and Germans, in their prosperity, have chosen leisure and swaddling by the state. This appears to be where the United States is headed as well."
In other words, in some ways "Dow 36,000" didn't fail us. We, the American people, failed Dow 36,000. We were just too lazy, and soft, and, well, "decadent" to deserve it.
His commentary has been taken with great seriousness by a number of people. Yes, the world is much riskier. Yes, America is in decline. No wonder the stock market has done so badly. That's the reason.
It may sound compelling.
There's just one problem with it.
It's total claptrap.
The failures of Dow 36,000 have little "” or, in most cases, nothing "” to do with any of these. And believing they do is just to repeat the old mistakes in new ways.
While advisers remain optimistic in their outlook for stocks, many see warning signs in the market's long rally. Among the most common:over-enthusiasm from their own clients.
Look, I actually want to take a charitable view of Glassman here. We all make mistakes. And I respect a man who can admit he was wrong. Very few people actually have the guts to do so. When they do they're usually penalized for it.
And there is more joy in heaven over one sinner who repents than over 99 who don't need to. So I want to be on Glassman's side.
Brett Arends is an award-winning financial columnist with many years experience writing about markets, economics and personal finance in Europe and the U.S. He has received an individual award from the Society of American Business Editors and Writers for his financial writing, and was part of the Boston Herald team that won two others. He was educated at Cambridge and Oxford Universities, and has worked as an analyst at McKinsey & Co. He is a Chartered Financial Consultant (ChFC) and Accredited Asset Management Specialist (AAMS). His latest book, "Storm Proof Your Money," has just been published by John Wiley & Co.
The Academy Awards would have attracted more viewers if there had been a better host, writes Jon Friedman.
3:45 p.m. Feb. 28, 2011
"The trouble with Dow 36,000 http://on.mktw.net/eY7pFI" 12:11 a.m. EST, March 1, 2011 from MKTWArends
"Pentagon spending is budget blind spot http://on.mktw.net/eAkuzR" 1:34 a.m. EST, Feb. 14, 2011 from MKTWArends
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