Wall Street Investor Mocked 25 Years Ago for Predicting Dow Jones at 40,000

On the 26th (local time), the Wall Street Journal (WSJ) reported that a Wall Street investor who was ridiculed 25 years ago for predicting the Dow Jones Industrial Average would surpass 40,000 is now the one laughing.

According to the report, 79-year-old David Elias, who resides in Williamsville, New York, predicted in his 1999 book Dow 40,000: Strategies for Profit in the Greatest Bull Market in History that the Dow would reach 40,000 by 2016.

Although the milestone was only reached eight years later than he predicted, Elias told WSJ, "It's better to be late than not to have predicted it at all." The Dow, composed of blue-chip stocks on the New York Stock Exchange, surpassed 40,000 intraday for the first time on the 16th. The following day, the 17th, it made history by closing above 40,000 for the first time.

Earlier this month, ahead of the Dow crossing 40,000, Elias received 12 baseball caps as gifts, with "Dow 40,000" printed on the front and "Elias" on the back. WSJ noted, "He was mocked for predicting Dow 40,000 in 1999," adding, "Now look who's laughing."

After the book's publication, Elias faced years of online ridicule and mockery. When the IT bubble burst, the Dow plunged to 8,235. Following the Lehman Brothers collapse in 2009, it dropped further to 6,547. On March 7, 2009, Amazon.com featured a review of the book stating, "Great as a doorstop or paperweight. Also good for killing cockroaches. You can tear the pages to start a fire in the fireplace. There are still useful ways to use this book."

WSJ mentioned that Elias is not the only person whose reputation was damaged by attempting to predict historic milestones of major indices. In 1999, James Glassman and Kevin Hassett predicted the Dow would surpass 36,000, but this did not happen by 2021.

Elias’s 1999 book also included the prediction that Microsoft (MS) and Intel would be added to the Dow and drive the index’s rise. Both MS and Intel were added to the Dow in the year the book was published, and Microsoft is currently the company with the largest market capitalization.

The book also forecasted that U.S. stocks would outperform global stocks. WSJ pointed out that since the end of 1998, the Dow has risen about 325%, outperforming Japan’s Nikkei 225 (about 180%), the STOXX Europe 600 (about 85%), and Hong Kong’s Hang Seng Index (about 90%). Additionally, Elias predicted rapid growth in Latin America over the next 20 years; however, countries such as Mexico, Venezuela, Brazil, and Argentina have faced difficulties due to recessions and other challenges.

Elias has also issued a new Dow forecast. He expects the Dow to reach 67,000 within 10 years. He emphasized, "I am 100% confident," adding that one reason for this belief is artificial intelligence (AI).