As we approach that number- putting aside paper worth (dollars invested, not in any way backed up by real capital): will the fall stop at a real number? or will it slide into bargains.

This is the Clinton Legacy.

Markets based on lies.

The DOW will be worth nothing all too soon if the Government keeps going after companies for bad accounting.

The DOW will be worth nothing all too soon if it continues to fall and rise with the news that JUST ONE large company is not going to hit it's projected growth. Read: Media Hype.

You will see more and more short-term investing and day-trading going on as the market becomes more volatile. This will also INCREASE the volatilty.

Potential new investors will be apprehensive about buying stock...Just the opposite of what happened when the Dot.Com boom was starting.

The only thing that will save the market, aside from lower taxes on capitol gains, is a NEW INDUSTRY that can sustain itself.

I do not know of any new industries that fit the bill.

Actual worth? About 4,000.

Yes, between 4,000 and a bit over 5,000.  The rest is just perception, which is easily manipulated.

Remember how it was run up?  The new economy with Clinton and Gory (who invented the internet).  Whoooppie!  HAppy days are here again!  I felt the economy was a fraud in 1997; and some would argue earlier, something I would not dispute.  Fortunately for me, I took my own advice and got out of the market nearly two years ago.  

Why worry, the entire market is not dropping. This is the 2nd year in a row the BOND market [:)] will outperform the stock market. Diversification and a longer time horizon is the key. Unless there is another Worldcom or Enron lurking in the shadows, I would dare to say that 7500 would be the bottom. The STOCK market is not participating in the economy due to all these companies that lied about earnings. All economic indicators point towards a slow recovery, albeit SLOOOOWWWWW.

The biggest problem we have now is that the dollar is becoming devalued in the world markets. This puts a funky twist to the Fed. and puts them between a rock and hard place. However all is not lost as price fixing is legal in the currency market.

Look at it this way. Some day, some ignorant politician is going to knee-jerk the U.S. into a "cashless society". This will be a poor attempt to trace funding of terrorists, poor business accounting and tax dodgers.

With a no-cash society, there is NO WAY the stock OR bond market will support itself, so when you start hearing about Iris Scans and  Chip Implants becoming more popular, that would be the time to get out of the market.

Man, I LOVE a good paranoid rant conspiracy =)

5000 DOW
500 NazduK imo

Devil's Advocate said:
The DOW will be worth nothing all too soon if the Government keeps going after companies for bad accounting.

I must totally disagree!  The stock market is a confidence game and the gamblers need to believe the figures.  Until the crooks are rooted out and the accounting mess cleaned up there will be no confidence.

IMHO we need to lock these THIEVES up and make them return the money stolen like any other criminal.

Market will continue to fall for some time.  It has been overvalued for years and based on "growth" (speculation) rather than actual profits or potential for same.  Too many jittery types and con artists who place short term profit ahead of long term profitability.

Who is that author who wrote the book "Trends 2000"? I heard he's been right most of the time and he claims the DOW could sink to 3000 and the NASDAC 1000. That would suck.

There are two main methods of figuring the actual value of a company.

1. Take the total expected market value of all the assets (equipment, real estate, patents, contract rights), subtract all liabilites (what the company owes, include employment termination costs), and then divide that number by the number of shares.

2. Predict the future dividends of a company into the future, apply a future value deduction to each (there are many methods) and see what that is worth per share.

Then take the higher of the two amounts.

All the standard fancy talk, P/E ratios and such, are a method of figuring something related to #2.

In brief, use the above to figure the value of each of the Dow stocks. That is why the market is not going to recover for a long time unless corps keep buying back shares (and thus lessen the number of outstanding shares out there to increase the value per share).

Note, if #1 gives the higher value the corp is not long for this world.

I have put money into my gun collection for 20 years, have got lots of bargains. I can tell you that you can liquidate your collection for retirement and not have all the hassles of a 401! I have never seen the gun market take a big slide in the wrong direction.

I'm sorry, I really didnt mean it the way you read it. Yes, I agree that SOMEONE should watchdog them. My bitch was that the Government can DESTROY a companys reputation if they even HINT that they might look into them.

IT IS ALL MEDIA HYPE that is screwing the markets.

Oh yeah, Now just WHY is our market hinging on the Japanese market every morning? Seriously, somebody tell me because I don't know.

It's not just media hype that's destroying the market. If anything, media hype is supporting this market, telling people not to worry and to invest for the long haul.  This is insane.

All the markets became overpriced due to the Fed creating so much money over the last five years.  Anytime there was a financial crisis (Asia/LTCM, Y2K, 9/11) the Fed would react by inflating the money supply.  Much of that money went straight into the stock market, blowing prices way out of proportion with earnings and possible growth.

This pumping by Greenspan created the bubble.  He popped the NASDOG with interest rate hikes, but the Dow and the S&P have pretty much held on until this year.  And they still have a long way to fall.  S&P's at 900 with an average P/E of something around 25-26.  Historical P/E average for a fairly priced stock is something like 13-14.  We have a ways to go.