When the Dow Jones Hits 120,000…

Back in the summer of 2008, Commodity Hedgies were all the rage as dollar values seemed to rise daily, and particularly if you happened to be lucky enough to have picked the crude oil contract.

This luck was deemed as "genius" at the time, as pension fund consultants made the rounds to all their clients saying things like:   "You need more exposure to commodities. After all, they’re rising!"

And expose themselves they did. Gas hit $5.00 a gallon and oil hedge funds were making a killing.

Crude Terrorism

It was in June of that year that I wrote a piece called "Crude Crisis or Financial Terrorism?" And I sent the report to all members of the Senate and Congress.

I got one call for my efforts, from the Department of Homeland Security. They wanted to know where I got the crude oil charts. I told them they were from down the hall from their offices at the CFTC - they were released every Tuesday.

The report was correct.

The experts told us crude was going to $200 a barrel, then $300, and OPEC ruled the future.  The media followed with a summer full of video coverage showing us that future. The end was upon us because the price of crude would choke the world economy. All would fall.

But we fixed that too.

In the end, $148 oil was terrible. And yet so was $26 per barrel just 12 weeks ago. But don't worry, when it gets back to the midrange that will somehow be bad for the consumer as well.

The Dow Jones and New Highs

I started in this business in 1982, and I cannot tell you how many times I’ve read from “the experts” that “It's risky to invest in the rally in the Dow Jones since it has never been this high before."

The Dow Jones was just 1,200 or so at the time.  It’s now near enough to 18,000.

And while we fixed that too we still get the same headlines.

Be certain of this:  30 years from now, we will look back on this period with the same amazement as we can now see when the Dow Jones was at 1,200 in the early 1980s.

And when the Dow hits 120,000, our current levels will look cheap and we won't recall being afraid to invest at record highs given how bad the future looked.

Think demographics not economics. And count people first, money and economic growth will follow.