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Last week,
the “DOW
JONES PROPAGANDA AVERAGE” celebrated the five-year
anniversary of hitting its ALL-TIME HIGH of 14,166…
The slew
of MSM coverage of this trivial event was AWESOME; far more important
than the rest of the world’s stories combined –and then
some. Idiot websites like Yahoo! Finance tried to glean “meaning”
from this milepost; when in fact, there is NONE…
Stock
Market’s Five Year Anniversary of All-Time Highs: What Have We Learned?
…other
than the fact the iPhone was launched in 2007; allowing the capitalization-weighted
NASDAQ to be skewed upward by the performance of one stock…
Since
October 2007, the Dow has declined 5% in nominal terms, compared to 9%
for the S&P 500. Of course, the primary reason for this disparity is survivor
bias; as since October 2007, Citigroup, AIG and General Motors were
deleted from the Dow; in lieu of Kraft Foods, Cisco, and government-supported
Travelers.
Quietly,
last month Kraft was replaced by United Health, a soon-to-be-Obamacare-supported company; which, not surprisingly,
outperformed Kraft over the past five years, skewing the Dow’s
“comparative growth” further…
Historical
components of the Dow Jones Industrial Average
Aside from
being the WORLD’S MOST MANIPULATED STOCK AVERAGE – in the name of
“national security” – the Dow also suffers from FAR MORE
deadly biases. Most importantly, its nominal gains ignore INFLATION
– the giant, pink elephant in the room. Simply based on
the government-published CPI, the Dow is down 12% in the past five
years; and likely, 15%-20% including the aforementioned survivor bias…
Of course,
by now we ALL know – even KING MSM SHILL Jack Welch –that
government statistics are pure fantasy; especially inflation data,
utilized to not only calculate entitlement payments, but engineer perception
of the dollar’s value.
John
Williams of shadowstats.com is the pre-eminent expert in calculating
REAL economic data; and according to his data – and OUR experience in
the REAL WORLD – annual consumer inflation has run 6%-7% higher than
reported; far less so, in things we “WANT VERSUS NEED.”
Using
Williams’ REAL inflation data, the Dow is down a whopping 32% in the past
five years; and likely, around 40% when incorporating survivor bias…
In other
words, when it comes to stock performance there are numerous items to
consider; other than nominal price. Equally important are survivor
bias and inflation; for the latter of which, there is no better
measure than the following…
PROTECT
YOURSELF, and do it NOW!
Call Miles
Franklin at 800-822-8080, and talk to one of our brokers. Through
industry-leading customer service and competitive pricing, we aim to EARN
your business.
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