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

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.”



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...


Looney The_Juggernaut Wed, 09/20/2017 - 15:41 Permalink

  … “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

In reply to by The_Juggernaut

Escrava Isaura Beam Me Up Scotty Wed, 09/20/2017 - 17:45 Permalink

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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.    

In reply to by Beam Me Up Scotty

Chupacabra-322 yogibear Wed, 09/20/2017 - 16:29 Permalink

@ 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.

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

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

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.


In reply to by yogibear

Rapunzal lester1 Wed, 09/20/2017 - 16:04 Permalink

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.

In reply to by lester1

spastic_colon Wed, 09/20/2017 - 15:41 Permalink

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