Lessons of a Bull Market That Never Happened

By BRETT ARENDS
WSJ

Much of the financial news this month has revolved around the one-year anniversary of the Panic of 2008 -- the collapse of Lehman Brothers, the takeover of Merrill Lynch, the government's bailout of Wall Street.

But there's another anniversary for investors. It is 10 years this weekend since the publication of "Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market," a popular seller that became the poster child of 1990s stock-market hubris.

Authors James K. Glassman and Kevin A. Hassett weren't quite the Dan Browns of their day, but in their book they nonetheless claimed to have discovered a virtual secret code buried within the stock market.

In a nutshell, they argued that, even in that period of wildly "irrational exuberance," shares were massively undervalued. Their reading of history revealed that shares were far less risky over time than was widely assumed. As a result, they concluded that the Dow Jones Industrial Average, which at the time stood at 10300 or so, was really worth more than three times as much.

(More here.)