The Ghost of Dow 36,000

"The authors were James Glassman, a Washington Post columnist at the time, and Kevin Hassett, a former Federal Reserve economist who had moved to the American Enterprise Institute. Their argument was that investors had been demanding too much extra return from stocks compared to bonds, and that as the gap closed, share prices would have to rise dramatically. The math, by their reckoning, pointed to a Dow about four times higher than where it was sitting."

"In the January 2000 issue of The Atlantic, the authors bet a critic that if the Dow were below 23,000 ten years later, they would each donate $1,000 to charity. They lost. In early 2010, they each sent $1,000 to the Salvation Army. The Dow did not actually close above 23,000 until October 18, 2017."

"On Tuesday, November 2, 2021, the Dow closed at 36,052.63 for the first time. The number on the cover was right. Almost everything underneath it was not. The gap between stock and bond returns that the authors expected to close did not close. Corporate earnings did not quadruple in five years."

"Then on November 2, 2021, the Dow finally closed at 36,052.63. Twenty-two years and one month after publication, the title was technically right. And on February 6, 2026, the same index blew through 50,000."

In fall 1999, James Glassman and Kevin Hassett promoted a hardcover predicting the Dow would more than triple within three to five years, based on the idea that investors demanded too much extra return from stocks versus bonds. The dot-com crash followed, and the book was later called spectacularly wrong. The authors later made a bet that if the Dow stayed below 23,000 ten years later, they would donate $1,000 each to charity, which they ultimately paid after the Dow did not close above 23,000 until 2017. On November 2, 2021, the Dow closed at 36,052.63, matching the cover number, though the expected return gap and earnings growth did not materialize. The Dow later exceeded 50,000 on February 6, 2026.

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