Inaudible editor and chief.
Jill Schlesinger: And I'm Jill Schlesinger editoratlarge. There's still lots of talk out there about the Dow hitting 10,000, but how excited should you really be?
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All right. Jill, no one knows better than us that 10,000 is a meaningless psychological milestone and yet, I can't help but feel more optimistic when the Dow's above 10,000 and a little pessimistic when it's under 10,000. It's like picking daisies. She loves me when it's above 10,000. It's a inaudible market when it's below 10,000. What's up?
Jill Schlesinger: Well, I mean, five digits is definitely better than four digits, and it is psychologically important. As much as we say it's just a number, yes, ten years from now we'll look back. We'll say, "Yeah, that was just a number." But as we are living it today, we know that markets and investors are influenced by all of these emotions. And when we go above these benchmark levels, it does feel good. We have a tiny bit of euphoria, and it does help sentiment a little bit.
That's right. Well, of course. When you start to feel that way, there are some other numbers you can focus on to take the euphoria down a couple of notches.
Jill Schlesinger: Yes.
27. That's the number of times the Dow has crossed 10,000 and then retreated back again. Or how about this one? 1.4 trillion. That's the size of the deficit and that is as far as the eye can see. When the government's borrowing that much money and propping up the economy, you have to wonder how solid is this recovery really? And if the Dow 10,000 is keyed off for recovery coming, how much can you believe it?
Jill Schlesinger: Well, I keep thinking it's great. Here's a good metaphor from baseball season. We're in the height of the playoffs. We're coming up to the World Series. Our economy is like an injured baseball player, and the doctor pumped us full of steroids. And it was great because we got back on our feet. We could swing the bat and all of a sudden the numbers got better and better and better. The question that we're really asking ourselves is: Can this player, this economy survive without those performance enhancing drugs, all that liquidity that was pumped into the system? That's gonna be the test when the Federal Reserve and the Treasury stop pumping money in. Will our athletic body be able to handle 10,000 and actually go forward from here?
That's a really good point. You know, there have been a lot of earning surprises in the past week, but a lot of them have focused on the banks and who was getting more of the steroid shots than the banks.
Jill Schlesinger: Indeed. And you know, I think it's also important for us to realize that a lot of these earnings still are looking good simply because companies have cut head count, cut expenses. We actually need to see companies sell more stuff. We had Apple reporting that they sold more iMacs and more iPhones last quarter than any other quarter in its history. That's what we need to see more of. We need to see it the banking sector. We need to see it in technology sector and all the different sectors that comprise the S&P 500.
Yes. Well, I think we're starting to see it a little bit in technology. There is some topline growth there, but that's really the outlier. It's kind of the exception right now.
Jill Schlesinger: And we also have to think about the investor who is sitting here saying, "But wait a minute. I'm not really where I was two years ago." And you aren't, and we get that. But it just shows you, you can't get too excited by the numbers because, frankly, it depends what kind of investor you are. You may not have gone down as much as the market went down. You may not have participated in this rally as fully. But in the end, you still are stuck with the same dilemma. What kind of investor am I? What is my time horizon? How much risk do I want to take? It's boring, but you come back to those questions. It should keep your out of trouble.
That's right. 10,000. The questions you have to ask yourself at 10,000 are the same questions that you ask at 7500 at 13,000 at 9,000. That's reality, and that's your reality check. Thanks for watching.
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==== Transcribed by Automatic Sync Technologies ====
