The previous manager was short, and he's gone. So I go long. I announce to the entire office that in their lifetime, they will never again see 1,000 on the Dow again and that we had better get their clients into the market while we can. The rest of the story you already know. The Dow goes from 750 to over 11,000 in 19 years.
Life is sweet.
But not without a few uneasy moments along the way. Granville is discredited, but then along comes Robert Prechter and the Elliott Wave Theory, and again the world marches to a new pied piper. Long in October of 1987 with the Dow at 2,639 on the 1st, Prechter fails to warn his clients of the Oct. 20 pullback to 1,616. Prechter remains short as the market climbs to new highs and keeps going. Discredited and bruised, he sends all his subscribers a book of Japanese haiku poetry and disappears to some island.