''Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market'' is a 1999 book by syndicated columnist James K. Glassman and economist Kevin A. Hassett, in which they argued that stocks in 1999 were significantly undervalued and concluded that there would be a fourfold market increase with the

Dow Jones Industrial Average The Dow Jones Industrial Average (DJIA), Dow Jones, or simply the Dow (), is a stock market index of 30 prominent companies listed on stock exchanges in the United States. The DJIA is one of the oldest and most commonly followed equity inde ...

(DJIA) rising to 36,000 by 2002 or 2004. The bursting of the

dot-com bubble The dot-com bubble (dot-com boom, tech bubble, or the Internet bubble) was a stock market bubble in the late 1990s, a period of massive growth in the use and adoption of the Internet. Between 1995 and its peak in March 2000, the Nasdaq Comp ...

of 2000,

September 11 attacks The September 11 attacks, commonly known as 9/11, were four coordinated suicide terrorist attacks carried out by al-Qaeda against the United States on Tuesday, September 11, 2001. That morning, nineteen terrorists hijacked four commer ...

in 2001, and the

Financial crisis of 2007–2008 Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of ...

ensured that the titular target would not be attained within the author's suggested timeframe. It wasn't until 2021 when Dow 36,000 would be reached in actuality, 22 years after the book was published.

Context

Glassman and Hassett had predicted that the The book was published in 1999, shortly before the

burst, and predicted that stocks would rise quickly to 36,000. Although the DJIA reached a record high of 11,750.28 in January 2000, it fell steadily after the bursting of the

. Following the

of 2001, the DJIA fell further, reaching a low of 7,286.27 in October 2002. Although the DJIA recovered to a new record high of 14,164.53 in October 2007, it crashed back to the vicinity of 6,500 by the early months of 2009, amidst a

global recession A global recession is recession that affects many countries around the world—that is, a period of global economic slowdown or declining economic output. Definitions The International Monetary Fund defines a global recession as "a decline i ...

Historical results

Excerpts from the book were published in ''

The Atlantic Monthly ''The Atlantic'' is an American magazine and multi-platform publisher. It features articles in the fields of politics, foreign affairs, business and the economy, culture and the arts, technology, and science. It was founded in 1857 in Boston, ...

'' in 1999. In the January 2000 issue of ''

'', Glassman and Hassett replied to a critic of their theory that "if the Dow is closer to 10,000 than to 36,000 ten years from now, we will each give $1,000 to the charity of your choice." For the Dow to be closer to 10,000 than to 36,000, it would have to be below 23,000. As things turned out, the index was not even at half that figure ten years after Glassman and Hassett's prediction (the Dow's highest close in January 2010 was 10,725, reached on January 19). In early 2010, Glassman and Hassett conceded they lost the bet and they each donated $1,000 to the Salvation Army. It wasn't until October 18, 2017, coincidentally the day before the 30th anniversary of

Black Monday Black Monday refers to specific Mondays when undesirable or turbulent events have occurred. It has been used to designate massacres, military battles, and stock market crashes. Historic events *1209, Dublin – when a group of 500 recently arriv ...

, that the Dow closed above 23,000, thus finally reaching more than halfway from 10,000 to 36,000. Following multiple downturns, including the

2020 stock market crash On 20 February 2020, stock markets across the world suddenly crashed after growing instability due to the COVID-19 pandemic. It ended on 7 April 2020. Beginning on 13 May 2019, the yield curve on U.S. Treasury securities inverted, and rem ...

, the Dow continued rising toward the titular milestone. The Dow Jones Industrial Average finally reached 36,000 in intraday trading on November 1, 2021 and closed above it the next day.

Summary of main argument

According to

John Quiggin John Quiggin (born 29 March 1956) is an Australian economist, a professor at the University of Queensland. He was formerly an Australian Research Council Laureate Fellow and Federation Fellow and a member of the board of the Climate Change Aut ...

, writing in the ''

Australian Financial Review ''The Australian Financial Review'' (abbreviated to the ''AFR'') is an Australian business-focused, compact daily newspaper covering the current business and economic affairs of Australia and the world. The newspaper is based in Sydney, New Sou ...

'', Glassman and Hassett believed that both investors and official commentators had mistakenly considered stocks to be a risky investment which should require a premium return, when compared to 'safe' investments such as

government bonds A government bond or sovereign bond is a form of bond issued by a government to support public spending. It generally includes a commitment to pay periodic interest, called coupon payments'','' and to repay the face value on the maturity dat ...

. They argued that if stocks and bonds were treated as equally risky, the Dow Jones index would be around 36,000. Hence, anyone who gets in now and stays for the long haul, can expect returns of around 300 per cent (in addition to the normal interest rate) as the rest of the market wakes up. Once this historic correction is over, the

efficient-market hypothesis The efficient-market hypothesis (EMH) is a hypothesis in financial economics that states that asset prices reflect all available information. A direct implication is that it is impossible to "beat the market" consistently on a risk-adjusted bas ...

will hold sway. Quiggin situated Glassman and Hassett at a time when the economic boom in the United States of the 1990s had created "the renascence of the stock market"—the Dow Jones index had risen from 1000 in the early 1980s to more than 10,000 by 2000 with Nasdaq, a technology-based-index with an even more dramatic rise.

References

{{reflist, 30em

External links

''Booknotes'' interview with Glassman on ''Dow 36,000'' 3 October 3, 1999.
1999 non-fiction books American non-fiction books Collaborative non-fiction books Dow Jones Industrial Average Finance books Prediction