Dow's At a New High? Don't Get Too Excited

Excerpt from our One-Page WSJ Summary:

Cold Water Club

Summary: Remember the good old days of 1972? On November 10th, the Dow closed at 995.26, breaking the six year plus record of 995.15 from February 1966. Then after peaking at 1051.7 in January 1973 it fell, and took a decade to recover. According to Bollinger Capital Market's John Bollinger, yesterday's peak looks all too familiar: "Great bull markets are born from periods of excessively low valuations. All the current cycle has allowed us to do is bring us to just above average valuations." Plagued by Watergate, inflation, oil woes and recession the 70s turned out to be no picnic; while these days may be better, as the article notes: "it hardly seems like a time for lots of bubbly."
Related links: Full WSJ article • First Time in a Decade the Dow's P/E is Higher Than the S&P 500's • New Stock Bubble Theory Picks Up Steam • Not All Markets are Hitting Highs
Potentially impacted ETFs: S&P 500 Spiders (SPY), Diamonds Trust (DIA), Nasdaq 100 (QQQQ), iShares Dow Jones Select Dividend (DVY)

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