Dow 100,000: Fact or Fiction [Hardcover]

Charles W. Kadlec (Author)

Book Description

Publication Date: September 30, 1999

Boom or bust? That's the question on the mind of millennium market watchers. A seasoned investment strategist, Charles W. Kadlec has a startling answer: We are at an historic moment, the beginning of a Great Prosperity -- a decade or more of above average economic growth. What lies ahead is a period of unparalleled opportunities for investors with a strategic outlook. In this provocative book, Kadlec reveals the forces driving this monumental boom and examines its potential impact.

Dow 30,000 supports its supremely bullish premise -- the DJIA is headed for a record 30,000 by the end of the next decade. With penetrating insight, Kadlec pinpoints the factors now in place that could make this ideal an economic reality: the end of Cold War, the aging of baby boomers, technological revolution, the spread of freedom (and the surge of individual creativity), and increased competition among governments for economic activity. He does not ignore potential threats: war in the Middle East, international terrorism, or failure to solve the dilemmas of Medicare and Social Security: He concludes with two strategies for taking advantage of this phenomenon -- one for wealth-building, and the other for wealth-budgeting.

Compelling and persuasive, Dow 30,000 will change the way investors look at today's market -- and empower them to seize the opportunities that tomorrow's market offers.

Editorial Reviews

Amazon.com Review

Any number of magazine articles, and even a few books, will tell you that the U.S. stock market in the late 1990s was a dangerous bubble. No one could say when the crash was coming, but a lot of people believed it was just around the next big economic curve. Kadlec, chief investment strategist for Seligman Advisors Inc., has a different point of view: sure, bad things will happen now and then, but ultimately the Dow Jones Industrial Average will end up at 100,000 in the year 2020. In other words, "two decades of above-average economic growth with price stability." This, he notes, represents only an 11.1 percent annual increase in the stocks' value, which, he believes, is entirely realistic.

So how does Kadlec actually get to 100,000? First, he shoots down comparisons to previous periods of boom and bust. The cold war is over, he notes, which represents a new political paradigm. Then there's the oft-discussed drive of the baby boomers to retire in style. And, of course, there's technology, presenting new ways for workers to be more productive and resourceful. Kadlec also sees the worldwide trend toward freedom and democracy as a powerful economic force, as is the need for governments to compete with each other for economic activity. But he cautions that the prosperity he predicts isn't guaranteed: wars (either with bombs or tariffs) could end it pretty quickly. So could terrorism or higher taxes. (He includes some nifty illustrations showing how tax increases on rich people inevitably sock middle-income and poor people harder.) And a currency shock could cause untold economic mayhem. Kadlec notes that even he was surprised by his conclusion that the Dow should travel to this nosebleed height. But if he's right--well, let's just say a lot of investors are going to have very comfortable retirements. --Lou Schuler

From Kirkus Reviews

A positive scenario for the future of the stock market. While many economic forecasters fret over the inflated value of stocks, at least one believes that the market still has a long way to grow. Kadlec, a professional investment strategist, creates a strong and positive argument for further advancement over the next several decades in most areas of business, a period he refers to as ``The Great Prosperity.'' This argument is infectious and upbeat, but the author's intent is more than cheerleading. He bases his work on a sober analysis of history, economic systems past and present, and current trends in politics and business, both local and global. Discussion is based on probability, not certainty, and he emphasizes various dangers and pitfalls that can endanger further growth, even though the overall message clearly weighs heavier on the side of prosperity than collapse. The message is informative and provides a clear set of lessons on the basic underpinnings of economic systems as they function today. For those inclined to accept the author's premise, there are also simple guidelines for investors that are aimed at maximizing the effects of this future expansion. And other guidelines are designed to help all observers participate in a predictive exercise: lists of positive and negative signs that are strong indicators of continuing expansion or presages of economic downturns. Lower tax rates and an increasing number of countries committed to stable exchange rates, for example, are positives, while solving the Medicare funding dilemma and imposing tariffs on foreign trade are on the short list for causing problems. One minor negative: some of the investment strategies and tools included here come from the author's company and are a bit too promotional for an otherwise objective work. The author states that this is not ``a prophecy of the future,'' but it is also more than mere speculation. Definitely worth investigating, if only for the economic education. -- Copyright ©1999, Kirkus Associates, LP. All rights reserved.

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Product Details

• Hardcover: 288 pages
• Publisher: Prentice Hall Press; 1St Edition edition (September 30, 1999)
• Language: English
• ISBN-10: 0735201374
• ISBN-13: 978-0735201378
• Product Dimensions: 9.3 x 6.3 x 1.3 inches
• Shipping Weight: 1.5 pounds
• Average Customer Review: 3.3 out of 5 stars  See all reviews (23 customer reviews)
• Amazon Best Sellers Rank: #1,625,941 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

8 of 8 people found the following review helpful:

5.0 out of 5 stars Great book for turn-of-century jitters, September 9, 1999

By A Customer

This review is from: Dow 100,000: Fact or Fiction (Hardcover)

I must confess that I am an avid reader of economics, so I feel that I know whereof I speak: DOW 100,000 is simply superb. Not only is it immediately apparent how thoughtful Chuck Kadlec is, but he possesses that all-too-rare quality among economists of readablity- his is a vision and message that is readily graspable by the typical investor. And in these uncertain, turn-of-century times, that is a god-send. While it certainly doesn't hurt that his outlook is optimistic, he isn't Pollyannaish. He spends ample time discussing the risks to his outlook.

He's fun to read because it is as if he is thinking out loud. His contentions lead logically one to the other, and when you're finished with the book, you are not left struggling to remember what he thinks will happen- and why- you are left with a very logical, compelling construct.

Kadlec thinks that the Dow will reach 100,000- which to many is certainly a mind-boggling number. He argues that this is achievable by 2020 if the Dow simply advances by an annual average of 11.1%. He demonstrates that this rate of advance is eminently reasonable by tracing the Dow track record all the way back to 1926. He points out that if correct policies are in place, it is perfectly reasonable to expect this to happen. Then he goes on to examine five historical forces that are currently in play that, when combined with wise policy, virtually assure that it will happen. These forces include some things we tend to take for granted in this country- such as freedom- as well as some things we are still trying to understand- such as the meaning and magnitude of the on-going technology revolution.

Anyway, for students of the market and the forces that shape it, for investment advisors, for investors, this book is a great read. It provides you with a sound foundation on which to build. It poses and goes a long way toward answering the many questions we are all wrestling with as we approach the turn of the century. I really, really liked this one.

24 of 30 people found the following review helpful:

5.0 out of 5 stars Useful applications for all investors -- new or experienced., November 7, 1999

By A Customer

This review is from: Dow 100,000: Fact or Fiction (Hardcover)

I highly recommend Dow 100,000 Fact or Fiction by Charles W. Kadlec. This well-researched work clearly and concisley maps out a blueprint for a period of unprecedented economic prosperity.

In a nutshell, Kadlec points to numerous wealth-creating domestic and global trends which should continue to strengthen during the next century. These demographic, economic, and political forces are explained in a common sense approach that both the novice and seasoned investor could appreciate and, more importantly, apply to their investment decisions. While the title surely provides ammunition for the bears among us, Kadlec deflects the ammunition by not taking a pollyanna approach. The risks to achieving prosperity are clearly defined and explained.

Finally, Kadlec includes practical strategies for creating and maintaining wealth during this unique period. Kadlec's vision of the future is predicated on the escalation of individual freedom and choice. Reading this book will provide excellent preparation in order to take advantage of this exciting new era.

15 of 18 people found the following review helpful:

5.0 out of 5 stars Good times could become the norm. This book tells how., September 20, 1999

By A Customer

This review is from: Dow 100,000: Fact or Fiction (Hardcover)

Dow 100,000: Fact or Fiction is clear and simple, but never simplistic. Unlike many books on this topic, Kadlec offers thoughtful analysis, not opinion or hyperbole. This is a work grounded in a careful look at history and an understanding of the demographic, social, economic and political forces that alter policy and affect prosperity and stock market returns.

Kadlec begins with the insight that there almost no average years, but that the S&P 500's long run average return of 11.5 % is a homogenization of good times and bad times. He then goes on to answer the question of what determines whether we experience good times or bad times. The 30s and 70s, for example, reflect an accumulation of bad policies and the destruction of financial wealth and prosperity. The 80s and 90s are a period of excellent policies.

Kadlec is not a full-time permanent optimist. He has identified five forces that, if they continue to result in good policies, will propel us to a Dow 100,000. Importantly, however, he has also identified six pitfalls, areas from which policy errors could be made. If these errors occur, not only would prosperity not expand, we could in fact lose it altogether. As a professional money manager, I look forward to hearing more from him.