Buffett expects Dow over 1 million in 100 years

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warren buffett
Warren
Buffett

AP Images

Warren Buffett is still bullish on the long-term outlook for US
stocks.

The billionaire investor said he expects the index
to be “over 1 million” in a hundred years,
according to Reuters
. He was speaking at an event
celebrating the 100th anniversary of Forbes magazine.

He added that it’s not an unreasonable forecast given the
index was around 81 a hundred years back.

The Dow closed up by 0.18% at 22,370.80 on
Tuesday.

Given that, it’s worth noting that a value of 1,000,000 in
100 years translates into about a 4% compound annual growth rate,
which is lower than the average rate stocks have historically
grown.

Buffett’s comments at the event reflect one of his
long-standing beliefs: that over the long term, the stock market
news will be good.

Back in October 2008,
in the midst of the financial crisis
, he explained
that thinking in op-ed for The New York Times titled, “Buy
American. I am.”:

Let me be clear on one point: I can’t predict the
short-term movements of the stock
market.
 I haven’t the faintest idea as
to whether stocks will be higher or lower a month — or a year —
from now. What is likely, however, is that the market will move
higher, perhaps substantially so, well before either sentiment or
the economy turns up. So if you wait for the robins, spring will
be over. […]

“Over the long term, the stock market news will be
good.
 In the 20th century, the United
States endured two world wars and other traumatic and expensive
military conflicts; the Depression; a dozen or so recessions and
financial panics; oil shocks; a flu epidemic; and the resignation
of a disgraced president. Yet the Dow rose from 66 to 11,497.”

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