Demograhics suggests that getting to dow 3500-5000 in a panic in the mid teens is entirely possible
And maybe even a little sooner.<g>
For those familiar with Harry Dent's demographic terminology, the '48 to '66 bull corresponded to the peak spending of the Bob Hope generation. The '82 to '00 bull corresponded to the peak spending of the Boomer generation. While many of Dent's idea's are excellent, he pushes them too far (IMO). He ignores the emotional component of the market. For both the Boomers and their parents the Bob Hope generation, the euphoria generated by their secular bulls caused them to "get ahead of themselves". The Hope generation's market peak occurred in '66 not '72, and the Boomer's market peak occurred in '00 rather than '07.
But the generational spending peaks that Dent describes so eloquently still buoy the market. Note the "fine structure" in
Yes the market peaked in '66. But the period from '66 to '82 can be divided into two segments - '66 to '72 and '72 to '82. During the first segment, the Hope generation's spending still provided support for the market. Thus after the initial decline, the market moved sideways with '72 being about the same as '67. With retirement of the Hope generation in '72, the market plummeted (Sorta lost all Hope <g>).
Are there any parallels for us today? I believe there are. Some have marveled that even though we are in our third year of a bear market, public participation in the market continues to increase. I suspect that is a direct result of the boomer generational peak approaching (but not yet reaching) retirement. Moreover there are the still elevated P/E's of many stocks. If this analysis is correct, then the radical P/E compression associated with secular bear periods may have to wait until after 2007.
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