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Last week, the “DOW JONES PROPAGANDA AVERAGEcelebrated the five-year anniversary of hitting its ALL-TIME HIGH of 14,166…

The slew of MSM coverage of this trivial event was AWESOME; far more important than the rest of the world’s stories combined –and then some.  Idiot websites like Yahoo! Finance tried to glean “meaning” from this milepost; when in fact, there is NONE…

Stock Market’s Five Year Anniversary of All-Time Highs: What Have We Learned?

…other than the fact the iPhone was launched in 2007; allowing the capitalization-weighted NASDAQ to be skewed upward by the performance of one stock

Since October 2007, the Dow has declined 5% in nominal terms, compared to 9% for the S&P 500.  Of course, the primary reason for this disparity is survivor bias; as since October 2007, Citigroup, AIG and General Motors were deleted from the Dow; in lieu of Kraft Foods, Cisco, and government-supported Travelers.

Quietly, last month Kraft was replaced by United Health, a soon-to-be-Obamacare-supported company; which, not surprisingly, outperformed Kraft over the past five years, skewing the Dow’s “comparative growth” further…

Historical components of the Dow Jones Industrial Average

Aside from being the WORLD’S MOST MANIPULATED STOCK AVERAGE – in the name of “national security” – the Dow also suffers from FAR MORE deadly biases.  Most importantly, its nominal gains ignore INFLATION – the giant, pink elephant in the room.  Simply based on the government-published CPI, the Dow is down 12% in the past five years; and likely, 15%-20% including the aforementioned survivor bias

Of course, by now we ALL know – even KING MSM SHILL Jack Welch –that government statistics are pure fantasy; especially inflation data, utilized to not only calculate entitlement payments, but engineer perception of the dollar’s value.

John Williams of shadowstats.com is the pre-eminent expert in calculating REAL economic data; and according to his data – and OUR experience in the REAL WORLD – annual consumer inflation has run 6%-7% higher than reported; far less so, in things we “WANT VERSUS NEED.”

Using Williams’ REAL inflation data, the Dow is down a whopping 32% in the past five years; and likely, around 40% when incorporating survivor bias

In other words, when it comes to stock performance there are numerous items to consider; other than nominal price.  Equally important are survivor bias and inflation; for the latter of which, there is no better measure than the following…


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