is because I'd rather be right than rich.
I know this is a false alternative but so far I haven't
figured out how to break out of this particular,
idiosyncratic, patterned way of my being in the world,
even though, I hope to so break out ... some day.
But until and unless ...
Stop. I'm getting off track.
So, as I was saying:
When you evaluate the Chart 2 pattern and normalize
it (and file off its edges), here is what you get:
[insert it ... [400/400 = 1.0], etc. [0.5] [0.75 = 0.5 up
50%] and finally
[0 .1 which = 10% of starting peak] = Chart 3 on left]
Then, when you put the current day known DJIA
this normalized, crash curve pattern, here is what you
[insert this = Chart 4 on left, with the red dot the "you are here" mark as
of December 26th, 2008 DJIA close at 8515.55]
We notice that to be on the "pure" curve would have
required the Dow bottoming at 7,140 (after
dropping from its peak value of 14,279.96 set as an
interim day high back in October 11th, 2007) but so far
lowest its seen is 7,392 so we take that number as a
given and call the difference between it and the pure
bottom guesstimate error and count it as the pattern
bottom and then project the next top which per the
pattern is 50% higher or, DJIA = 7392 *1.5 = 11,088 to
be reached sometime during 2009.
The best guess is, during the first half of 2009 but I'm
not sticking my neck out to estimate this because you
have too many Government BM's sticking their noses
in .... what should be a free market but isn't.
So until and unless ... 1428 here we come?
No, wait. There is one saving grace possibility that
could keep the Dow from falling all the way to 1,428
and that is what I call the Greenspan bottom ( I know
some would use a swear word here but not me
because one of my new year's resolutions is to use
fewer and fewer and eventually almost no swear
words in my writing) ...
Anyway, as I was frigging saying:
The Greenspan Bottom (which is actually a Top in the
real world) is based on two
assumptions: what I call, the Greenspan Number is
basis for one assumption and the other assumption
is that the DJIA value of about 2000 at the end of the
year in 1987
was an actual, not very distorted measure of the real
value of the equity market as a whole at that time.
The Greenspan Number is the one he quoted in his
most recent book where he said it seems as if human
beings over the long long haul can at best create and
sustain an annual productivity increase of around 3%.
Then by the 'rule of 72, a 3% per year productivity
increase driven growth rate--that is, in reality markets
grow due to productivity increases, so that the real
market valuation today after a sustained optimal
productivity gain of 3% per year--doubles the initial
real value (DJIA of 2000 in 1987) in (72/3 =) 24 years.
That is, 1987 + 24 = 2011, the year in which the DJIA
will bottom out at 4,000 (where it should have grown
to) and not overshoot it in a kind of irrational anti-
exuberance all the way down to 1,428.
Then, at 4,000 the Dow will start its 3% long haul
climb once again.
(Getting back as it were into the 8000 zone in
2011+24=2035, one year before the year that I had
predicted (a decade or more ago) would be the year
Objectivism, qua influential philosophy, would take
over the majority of the American Culture (the year its
influence would pass the 51% mark). And none too
soon given this alternative, horrible
That's pretty much it.
Except to note these possible exception(s):
1. The Dow can break out of this pattern
but until and unless it does we ARE IN Crash Mode.
2. The time element--BECAUSE of
Government BM's--is too hard to predict with any
meaningful accuracy, but this makes sense because
the (free) stock market shape itself is the
of "volition possessing perceptual-conceptual rational
animals" pursuing their unimpeded-by-others selfish
interests (when impeded by others, especially BM's, it
throws in "action choices of SM
makes it MORE unpredictable, something BM's, qua
seekers of power over others, like--for
of evil BM's use of the unpredictable to control people
see Nazi Germany as explained to us by Dr. Peikoff
in "The Ominous Parallels").
3. Signs of break out?
a) Busting through the 11,000's very assertively and
staying above it in the same very assertive way (a
normal prediction tolerance of say, plus/minus 5%
makes the 11,088 be 11,642 on the top side and
10,533 on the bottom side so a break out to the top
side would have to take these numbers into
b) DJIA going sideways for a
relatively long time, say five years or more at 8000's to
9000's or so.
c) Alchemists finally solving
the problem of how to turn straw into gold (cheaply).
4. and any other thing THAT BREAKS THE
PATTERN IN ANY MEANINGFUL WAY
That's it, I'm done and exhausted. If I smoked I'd light
one up right now but I don't any longer. In fact I quit in
November of 1987 right during that little 33%, almost
(Von Mises) correction of the DJIA as it recovered back
to the 2000 number by years end. (Ludwig von Mises,
the great Austrian born laissez-faire economist said
real free markets, market corrections still occur
but when they do they are very rapid, meaning over
very quickly, hence "overnight" corrections or what I
call, Von Mises corrections. And notice the risky
double "reasoning" on my part (risky, because it could
be circular): the 1987 market correction was rapid,
hence, it must've been a real free market, hence a
DJIA of 2000 was a real--not distorted--market