Why the Dow Doesn’t Matter
Warren Buffett Just Called It: Dow 1 Million
Dow 1 million.
Can you imagine?
To be honest, I can’t believe the Dow is trading as high as it is today.
But Warren Buffett has gone on record saying that the U.S. is in pretty good shape, and even 100 years out, stocks are a solid bet. He also said that in 100 years, the Dow will be over a million.
While I’m the last person to second-guess the Oracle of Omaha, this is a bit of a stretch.
And let’s be honest: In a hundred years, today’s bull market will be about as relevant as whale oil in our modern economy.
In One Hundred Years
Yes, this year we’ve seen the Dow hit record highs.
Wall Street robots and D.C. speechwriters are loving life, and things are great.
Never mind the fact that household and personal debt continues to rise.
Never mind the fact that most folks are still living from paycheck to paycheck, unable to save or invest anything.
And don’t even get me started on the student loan time bomb.
At the end of 2016, total student loan debt came in at just over $1.3 trillion. Student debt is now actually the second-highest debt burden in the country next to mortgage debt.
When that house of cards comes crumbling, who knows what’s going to happen?
Of course, in the window of a hundred years, whatever damage the student debt bomb does won’t be particularly relevant by the time we get to 2117.
And that’s really my point.
Yes, despite the Dow hitting record highs and the Washington elite telling us how great things are, little of this is relevant in terms of where we’ll be in a hundred years.
What Do YOU Care About?
One hundred years ago, no investor would’ve predicted that we’d be able to buy and sell stocks in a matter of seconds using something called the internet.
No one would’ve predicted that there would be an International Space Station floating in space, where reusable rockets made by a guy who also builds electric cars would make regular deliveries.
No one would’ve predicted that a woman would be the Press Secretary for the President of the United States, who, worth noting, took over after a black man served as President of the United States for two terms.
Look, I love making predictions as much as the next guy, but in a hundred years, there might not even be a Dow.
Of course, none of this really matters to us as investors.
Although the idea of Dow 1 million makes for good headlines, it doesn’t help us create wealth today. And, quite frankly, that’s all I care about.
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Let’s just cut to the chase, shall we?
There are three areas you should be focused on right now if you really want to make some real money.
This is where you’re going to get the most bang for you buck today — not a hundred years from now.
And this is where my focus is, not on where the Dow will be in another century.
Hell, I don’t much care what the Dow’s doing today.
The Dow is considered a proxy of U.S. economic health. Bur really, it’s a representation of that which has already happened.
In other words, before the Great Recession hit us with all the subtlety of a brick to the face, the Dow was flying. Only after the proverbial poop hit the fan did the Dow tell us “things aren’t so good.”
People who continued to point to the Dow as evidence of a continued bull market got hit the worst.
Now, I’m not saying we’re about to get knocked over with another global economic implosion, but the Dow has had little to do with our ability to profit from the legal cannabis boom or the insane profits we’re seeing in the digital currency space.
Warren Buffett thinks the Dow will be at 1 million in a hundred years. And maybe he’s right.
But in a hundred years, we’ll all be worm food. So who cares?
All I care about is what’s going to make me money now.
And unless you hate money, this is where your focus should be, too.
To a new way of life and a new generation of wealth...
@JeffSiegel on Twitter
Jeff is the founder and managing editor of Green Chip Stocks, a private investment community that capitalizes on opportunities in alternative energy, organic food markets, legal cannabis, and socially responsible investing. He has been a featured guest on Fox, CNBC, and Bloomberg Asia, and is the author of the best-selling book, Investing in Renewable Energy: Making Money on Green Chip Stocks. For more on Jeff, go to his editor's page.
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