The man who called for Dow 20,000 six years ago now sees this ahead

In May 2010, when the Dow Jones industrial average was hovering around 10,000 and the markets were coming out of the financial crisis gloom, one financial blogger wrote, "Someone needs to say this: Dow 20K."

"The Dow will double before it is cut in half. I want to make this proposition right now, with the Dow around 10,000 and many forecasting 5000. … For the moment, let me just say that it is shorter — much shorter — than most people would think," Jeff Miller, president of NewArc Investments and editor of financial blog A Dash of Insight, wrote at the time.

Six years later, with the 20,000 level mere points away, Miller uses the same analytical tools to forecast further growth.

"I think another 10 or 20 percent fairly quickly is quite possible. And then after that, it depends on whether we resume the normal pace of corporate earnings growth and whether we can dodge a recession," Miller said Wednesday on CNBC's "Trading Nation."

Yet he adds that it may be another 10 years before the index level doubles once again, to 40,000.

At the time, he was met with skepticism from his blog's followers. After all, the Dow was nearly 30 percent below its 2007 peak, and the economy was crawling out of a recession. The unemployment rate that month was 9.6 percent, nearly double today's rate.

"Everyone was so negative" at the time, and knew market participants had a long list of reasons to worry, Miller said. That's what led him to consider: "What if things got a little better? What if unemployment got down below 8 percent, or Europe stabilized, or the housing market found a bottom?"

"It sounds like kind of an old list when you look back at it, because quite a few of them did happen," he added.

In a follow-up blog post one month later, Miller argued that investors were overwhelmed with negative news about the market and predictions of a 50 percent drop in the Dow — an event Miller just didn't see in the cards given historical patterns of market recessions and depressions. He urged investors to think independently and openly.

"The key point? Most do not realize the cost of sitting out the return to normalcy of stock prices. Obviously, this argument needs more evidence. With the Dow crossing 10,000, today was the right day to start," Miller wrote in his initial 2010 post.


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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's Closing Bell (M-F, 3PM-5PM ET). In addition, he contributes to CNBC and CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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