I keep hearing the market will bottom out around 8,000-8,500. I’ve heard it several times. Anyone know why that is the magic number that keeps getting repeated? Is it the number that would equate to “reverting to the mean” over the long-term? [/quote]
Yeah, I believe that Jeremy Grantham’s most recent numbers suggested that mean reversion would put the Dow, S&P and Nasdaq at around 8000, 850, and 1600, respectively. Absurdly low interest rates and the ensuing housing bubbles kept us from mean reverting back in 2001-2002 (although we got within 10%), but we may not escape it this time…
