Warren Buffett Predicts Dow 1,000,000; But There's A Catch...

Tyler Durden's picture

The Wall Street Journal won the award for the greatest "Shock And Awe" financial headline of the day when it published a story earlier entitled "Warren Buffett Says the Dow Is Going Over One Million."  The 'Oracle of Omaha' apparently made the 'bold' prediction at the 100-year anniversary celebration of Forbes magazine in which he also said that "being short America will continue to be a loser’s game."  Here are the highlights from WSJ:

You heard it from Warren Buffett first: the Dow Jones Industrial Average is headed above one million.

 

The blue-chip stock benchmark is likely to be above that milestone in a hundred years’ time, the Berkshire Hathaway Inc. chief executive and chairman said Tuesday night.

 

“The Dow will be over a million and that is not a ridiculous forecast at all if you do the math,” he said.

 

“Being short America has been a loser’s game,” he said. “And it will continue to be a loser’s game.”

Warren

 

And while the title may make you want to drop everything you're doing, throw all your cash in the DOW and retire early...a bit of simple math reveals that a more appropriate title for the Wall Street Journal's "Shock And Awe" piece from early today might have been: "Warren Buffet Predicts Dow Will Massively Underperform Historical Returns Over the Next Century."

In reality, 'Dow 1,000,000' in 100 years would indicate an abysmal CAGR of just 3.9% pre-tax, or closer to just 3% post-tax returns per year (assuming tax rates don't trend toward 90% over the next 100 years).

Taking a look back, the Dow has returned 5.7% annually over the past 100 years and 9.3% annually since 1980 when the modern era of equity bubbles first started to really take off.

 

Finally, just to put all this in context, if the Dow were to grow at the same annualized rate of 9.3% that it has grown at since 1980, then a more reasonable 100-year price target for the Dow would be just over 140,000,000 instead of the 1,000,000 predicted by Buffett...

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lester1's picture

Is that the same Warren Buffett who got an under the table bailout from the Federal Reserve in 2009?

The_Juggernaut's picture

It's only going to a million because teh dollar's going into the shitter.

Looney's picture

 

… “Being short America has been a loser’s game,” he said. “And it will continue to be a loser’s game.”

Oh really, Warren? How ‘bout this report?

The Strategic Studies Institute and the U.S. Army War College recently published a reportAT OUR OWN PERIL:

DOD RISK ASSESSMENT IN A POST-PRIMACY WORLD”.

In the team’s assessment, post-primacy has five interrelated characteristics:

1. Hyperconnectivity and weaponization of information, disinformation, and disaffection;

2. A rapidly fracturing post-Cold War status quo;

3. Proliferation, diversification, and atomization of effective counter-U.S. resistance;

4. Resurgent but transformed great power competition;

5. Violent or disruptive dissolution of political cohesion and identity.

Although, the document is 145 pages long, the actual “report” is about 60-70 pages, maybe even less. The rest are title pages, blank section separation pages, dedications, references – the usual bureaucratic bullshit.

Basically, it is the Deep State’s admission that “The unipolar world is over. We are fucked.”  ;-)

Looney

https://ssi.armywarcollege.edu/pubs/download.cfm?q=1358

Haus-Targaryen's picture

Dow - $1,000,000; BigMac - $49,999

Real value is what counts; not nominal

yogibear's picture

Zimbabwe economics American style.

SubjectivObject's picture

there's something .... something ...

exponential

going on with that chart

tmosley's picture

That chart went exponential the DAY Alan Greenspan became Fed chairman.

Mtnrunnr's picture

At some point asset inflation will have to slow down. GDP growth is at some point self limiting. The planet is only so large.

WakeUpPeeeeeople's picture

… “Being short America has been a loser’s game,” he said. “And it will continue to be a loser’s game.”

Ain't that what the Romans were saying. At least until they started taking it up the ass.

jcaz's picture

Ya Warren?  Well, I'm short WFC, see ya on the other side.....

YUNOSELL's picture

I'll only believe the Dow at 1,000,000 if Janet Yellen says it

Beam Me Up Scotty's picture

They could make the Dow 1,000,000 tomorrow if they wanted to.  It's only a number on a peice of paper.  They could create a whole shitload of money out of thin air and start a buying spree the likes of which no one has ever seen.  They could buy EVERYTHING and pay ANY PRICE for it.  Dow 1,000,000. 

Escrava Isaura's picture

tmosley: That chart went exponential the DAY Alan Greenspan became Fed chairman.

First, we haven’t seeing exponential yet.

Second, the problem is not the Fed, the crux of our financial problem is private money that you and I and our government had, and have to borrow into existence.  

 

Kidbuck's picture

Who gives a fuck what your first century pedofiles and faggots said.

sodbuster's picture

Warren Buffett- the "Orifice of Omaha"

auricle's picture

Didn't every other failed currency's stock market go into the stratosphere as well? That kind of prediction should have people deeply concerned. 

Kidbuck's picture

Growth may have limits but the value of the dollar can be halved and halved again forever.

Stuck on Zero's picture

Buffet has always been long on America: long on lobbying and insider trading that is.

OverTheHedge's picture

But the money system MUST have growth: bit of a conundrum.

Chupacabra-322's picture

@ yogi,

The only power the have over you is with CONSENT (Black Law's Dictionary). Pay no Taxes. Peaceful Non-Participation, Non-Compliance & being an accessory into their Criminal system/s based on Criminal Fraud, Debt Bondage & Enslavement.

Vote with Your Dollars. Seek Alternative Systems Decentralized outside the Control of the Borg. They're out there. Peer to Peer. Seek them.

Long Agorism.

AGORISM:
The ideology which asserts that the Libertarian philosophical position occurs in the real world in practice as Counter-Economics (see below).

AGORIST:
Conscious practitioner of Counter-Economics; older terms include Left Libertarian and New Libertarian.

COUNTER-ECONOMICS:
The study and/or practice of all human action which is forbidden by the State, including violation or non-compliance with regulations; sale and delivery of controlled or forbidden substances; ignoring of all borders and internal state boundaries, customs, tariffs, duties and taxes; evasion of taxes, tributes, levies and assizes; non-compliance with personal regulation such.

James Corbett:?The Most Dangerous Philosophy the Oligarchs Do Not Want You To Know.

https://www.corbettreport.com/the-most-dangerous-philosophy-what-the-oli...

cynicalskeptic's picture

The Zimbabwe stock market was the best performing market in the world for a decade......

of course Zimbabwe dollars were the worst performing currency.....   

 Pretty soon that worthless $Zim 100 trillion note will be worth more than a $US 100

Diatom's picture

WTF!!

I guess that in the current infinite growth model we gonna get a 250 000 km radius Earth...

Infinite growth...Infinite human stupidity...

BabaLooey's picture

Go fuck yourself Warren

Seriously.....do so.

You fucking cunt.

Get Becky Quick to ram her electronic Carl Quinatella model Burrito-dildo up your ancient tax cheatin, Barry Obomber taint licking choo train shit hole.

 

Au_Ag_CuPbCu's picture

I hate it when you sugar coat that shit!

Squid Viscous's picture

i don't listen to anyone that wears depends,

just fucking die already Buffett

strannick's picture

By being short America, he means being short the Deep State and Zionist Fed.

America doesnt exist in these places. God bless America

The Founding Fathers would have been outside Buffets home with pitchforks. Buffet would have had a troop of Redcoats to protect him.

Chupacabra-322's picture

Being short: Globalist NWO.

Thery're going "all in" on

The Global Criminal Oligarch Cabal Bankster Intelligence Crime Syndicate.

mkkby's picture

Simmer down everyone. This is the hedge. You are SUPPOSED to understand guys say this shit when they are SELLING.

Buffet is a deep value investor. Today the fed announces more tightening at record prices. Any questions?

TeethVillage88s's picture

Kicking & Screaming.

- MSM Kicking & Screaming
- Dems Kicking & Screaming
- Lobbyist & Think Tanks & Foundations Kicking & Screaming
- Agents & Foreign Agents Kicking & Screaming
- Deep State Kicking & Screaming to Recruit President Trump
- Neocons Kicking & Screaming to Recruit President Trump

cheech_wizard's picture

Reads like brochures for start-up companies in Silicon Valley back in the 80's and 90's...

English <buzzword><buzzword> more English <more buzzwords>

Standard Disclaimer: The U.S. military - always fighting the last War...

knukles's picture

On a long enough timeline the survival rate for everyone drops to zero

secretargentman's picture

That rings a bell... Did you make that up? 

Implied Violins's picture

...but what if the timeline reaches zero first??

affirmed_78's picture

On a long enough timeline every index drops to zero

iinthesky's picture

So it'll be worth 1/2 a Bitcoin by then?

Rapunzal's picture

He is a son of a corrupt senator and he is the world most famous insider trader. Always was, his books are utter garbage. Yes Dow too moon but calculate your bread prices as well. But Buffet was always that nice guy billionaire, that people could believe in. It's all a dog and pony show. Like the old JP Morgan he carries the water for the Rothschilds/Rockefellers.
They always get their cut, our economy is nothing but organized crime.

Wile-E-Coyote's picture

Yeah, it's fucking club and you ain't in it!!

veritas semper vinces's picture

I won't accept anything less than 6 Million.We all know that this is the magical number,after all.

bluskyes's picture

and the Kanukistan government in 2017 via Home Capital Group.

H H Henry P P P Paulson's picture

Yes, the same Warren Buffett who wishes he paid more in taxes, but only pays himself a 1/2 million dollar salary and uses the lower corporate rate for the rest.

lucyvp's picture

Yes, and his crumby little toady Charlie Munger who told college kids to "buck up" when they were questioning the status quo after  AIG, Well Fargo etc were bailed out.

ThankUGartman's picture

I thought he did a private placement investment for 10B in Goldman Sachs at $80/ share back in 2009? So he's up 20B just from that.

jamesmmu's picture
EXPERT: Crazy Not To Be In Gold Right Now… Stay Away from Bitcoin, It’s an ‘Absolute Bubble’

http://investmentwatchblog.com/expert-crazy-not-to-be-in-gold-right-now-...

The_Juggernaut's picture

I can think of many reasons that beaniecoins will implode, but the words of an "expert" aren't one.

spastic_colon's picture

oh geezus lets parade uncle crony around now in desperation.....thanks cnbs....he doesnt have to worry about being alive to see this happen.

this reminds me of the "Are You Rich Yet" Barron's headline in the 90's

Dun_Dulind's picture

Uncle Warren is off his meds again.

yogibear's picture

When people are trying to escape a dollar crash it's possible as the Federal Reserve forces everyone into stocks.

Implied Violins's picture

He's been forced to eat vaccinated babies again too.