US stock markets may be at record high, but billionaire investor Warren Buffett predicts that the Dow Jow Industrial Average, the stock market barometer, is well poised to hit the 1 million mark, and what’s more –that may be a conservative estimate. The Dow is currently trading at around 22,359 levels.
Warren Buffett told at an event organised by the Forbes magazine, where he was featured in the list of 100 of the world’s greatest living “business minds.” Warren Buffett said that Dow Jones Industrial Average will be “over 1 million in 100 years,” and according to the investing icon, that’s not unreasonable, as the Dow was at 81 a 100 years back.
Mario Gabelli , another billionaire investor and founder of Gabelli Asset management Company, which manages assets to the tune of $41 billion, tweeted, “DOWJones …one million in one hundred years …has Buffett turned bearish?”
Mario Gabelli told CNBC that Warren Buffett was “just having some fun” with numbers, but added that roughly 3.9% compound annual growth rate was needed to get from where the Dow is today to where Warren Buffett predicts it will be in 2117. Further, the expert pointed out that this would be much lower than the 5.5% CAGR from the beginning of the 20th century until now.
Warren Buffett has always been optimistic about the prospects of the US equity markets. Analysing the Forbes list historically, Warren Buffett said that when Forbes created its first list of the 400 richest Americans in 1982 — his net worth was just $250 million then. Since then some 1,500 different people have been included. Buffett observed one thing common among all of the greatest “living minds”–none of them bet against US growth. “Whenever I hear people talk pessimistically about this country, I think they’re out of their mind,” Reuters reported Warren Buffett as saying. In the same event, the ‘Oracle of Omaha’ noted, “Being short America has been a loser’s game. I predict to you it will continue to be a loser’s game.”
However, Warren Buffett acknowledged that he may not be around to enjoy the returns given by Dow in a hundred years. “When I hear talking about making it to 100, I get excited, I‘m 87,” he quipped. According to the legendary investor’s estimates, of the 53,364 people in the United States who were at least 100 years old, the ratio of women to men was nearly 5-to-1. “We should start thinking about a sex change,” Warren Buffett joked, amid peals of laughter.