On October 1, 1999, in the midst of the tech stock mania of that era, James K. Glassman and Kevin Hassett published their notorious book, Dow 36,000: The New Strategy for Profiting from the Coming Rise in the Stock Market. When the tech bubble burst the next March, Glassman and Hassett became the butt of many jokes for the audacity and timing of the book.

In full disclosure, I know and like Jim Glassman and he has been very kind to me in my career; but Jim and Kevin forgot a seminal piece of old Wall Street wisdom – it’s fine to predict a price or a time, but never to predict both. This, along with “Wall Street can stay irrational longer than you can stay solvent,” have been two aphorisms that I follow religiously.

It’s now a scant 22 years after the publication of the book, and the Dow Jones Industrial Average is within shouting distance of 36,000. I started thinking about the infamous book and decided to revisit its premise, perhaps to get a different historical perspective.

Luckily, before embarking too far in this project, I did a quick search on which stocks are in the Dow currently vs. October 1, 1999. The answer was pretty stunning.

Only 13 stocks remain in today’s Dow that are the same as on October 1, 1999. There are 4 more that have significant similarities to that era from mergers. But in general, the components of the Dow have basically changed 50% in those 22 years.

Even more enlightening – here are the stocks that are in the index today and out from 1999:

  • In: Amgen, Apple, Cisco, Goldman Sachs, Home Depot, Intel, Microsoft, Nike, salesforce.com, UnitedHealth, Verizon, Visa, and Walgreens Boots Alliance.
  • Out: Alcoa, AT&T, Eastman Kodak, Exxon, General Electric, General Motors, Goodyear Tire and Rubber, Hewlett-Packard, International Paper, Philip Morris, Sears Roebuck, United Technologies, and Union Carbide.

It doesn’t take a SpaceX rocket scientist to tell us that essentially, over the past 22 years, the committee that makes these decisions has replaced the best-selling car of 1999 [Toyota Camry] with a Tesla.

Not for the first time, it turns out that historical perspectives on the stock market are utterly useless. It’s literally not an Apple-to-Apple comparison!

So, if at some juncture in the near future the Dow Jones Industrial Average reaches 36,000, you might hear others revisit the book. Like so much that passes for “analysis” on Wall Street, when you look under the hood, sometimes you see an engine block, but sometimes just a frunk.

Jay Weinstein, CFA®

Jay is a managing director based in our Potomac, Maryland office.