Craziest Market Call Yet: 1,000 DJIA (DIA)

John Browne of Euro Pacific Capital made perhaps one of the ballsiest market calls or one of the craziest market calls yet in the entire bear market or in most peoples’ careers if they are 50-years-old or younger.  He came on CNBC on Thursday and he stated a target of 1,000 on the Dow Jones Industrial Average.  Yes, that was a “1” as in a 1,000 call.  If you were buying the DIAMONDS Trust, Series 1 (NYSE: DIA) ETF on his call if he is right, you’d get to pay $10.00 per share.

Upon hearing this call, I had to glance at my calendar to make sure it was not April 1.   Browne called the current economic situation as one where it is similar to trying to sober up a drunk with beer.  He also noted that economic numbers are all lagging and have not been accurately reported since the Pre-Clinton era.  Browne also talked about a total disconnect between stocks and their fundamentals with earnings multiples growing while earnings are contracting.

On top of a total disconnect between earnings and the markets, Browne noted seven bear market rallies after 1929 to a 90% drop.  He said this last move was nothing more than a bear market rally and he thinks we’ll probably get 3 or 4 more big bear market rallies…. before we hit 1,000.

Browne has a long successful career, otherwise he’d be laughed out of the room for this.  Despite everyone knowing that Larry Kudlow is always bullish against bears as he was today, everyone was too puzzled to laugh or consider calling the doctor for Mr. Browne.  He had a long military career with time spent in British politics as a Member of Parliament.  He’s also worked for several huge investment banking houses and graduated from Harvard Business School.   He also recently penned a piece called “Socialism Coming Back To Haunt U.S.” at the europac.net website.

We think this beyond being ballsy.  It sounds like madness.  At a 1,000 DJIA stock market, we’d all have many more problems than just a broken stock market and a screwed-up economy.  That price target seems too low even if you factor in a prolonged conventional war of the World War II scale.  Maybe his call is based upon a sudden and massive rise in the sea levels or a major meteor impact.

The lows in October of 1987 after the last huge market crash on the DJIA were 1,616.21, assuming you don’t count what we saw in the last eighteen months.  The last time we saw a sub-1,000 DJIA level was December of 1982.

If you want to watch his interview on CNBC to make sure he really said this, here is a link.

JON C. OGG