Replay of the 1920s bull market could lead Dow to hit 150,000. Is it happening soon?
Market Watch, if the market behaves between now and 2029 the same way it did during 1920, it may soar to a new height and reach the point many people can not imagine now. If the Dow Jones Industrial Average registers a growth of 0.79%, as it did in the 1920s, it may touch 150,000 in 2029.
But, there are important differences between the two sets of situations as well. The decade-to-date return of the DJIA from January 2020 to August 2021, was a gain of 22.7%, in contrast to a 41.2% loss over the decade-to-date return through August 1921.
If Dow Jones’s performance between May 2012 and February 2014 is superimposed on that of between 1928 and 1929, the correlation between the two series certainly looks to be remarkable. It also becomes clear that the prospect of a 1929-like crash is imminent.
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According to Market Watch, there are reasons to not believe that the current decade will be like the 1920s. According to Jim Grant, editor of Grant’s Interest Rate Observer, who has extensively studied the decade of the 1920s, it can be said safely that the stock market’s massive rally in the second half of the 1920s was in large part a bounce back from severe depression the U.S. economy.
Grant in his book wrote “The Forgotten Depression" wrote that in 1920 and 1921, “there was a deflationary depression” that was so severe that one economist at the time said that the world was “nearer collapse than at any time since the downfall of the
