It was August 17, 1982, and Dr. Doom had changed his mind.
Economist Henry Kaufman, then at Salomon Brothers, had come to be known by the comic-book moniker for his gloomy but influential forecasts of spiraling interest rates and inflation. But now he released a morning memo predicting that interest rates would decline over the coming year and “inflation expectations will erode gradually.”
That was about all that was needed to send both stocks and bonds into a rally that day. The Dow Jones Industrial Average gained a record 38.81 points to close at 831.24. The next day, for the first time ever, more than 100 million shares traded on the New York Stock Exchange. And by the end of 1982, the Dow had surged past the 1,000 line and was not looking back.
The roaring eighties had begun.
Wednesday, June 25, 2008
My Research magazine piece on "The Roaring '80s" in the stock market is online. Excerpt: