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FT.com Still Doesn't Get It   Cognitive Dissonance at Skype
Oct 1 2007 2:08PM EDT

The Dow Hits a New Record. Yawn.

What craziness is going on in the stock market! The Dow is hitting new highs! The biggest-gaining Dow component is Citigroup, a company which just announced its earnings were going to drop by 60% this quarter!

MI-AN298_AOT_20070930205640.gifJustin Lahart can't make heads nor tails of this crazy volatility, and accompanies his column with the chart at left, showing the Dow zig-zagging crazily on its way to the new highs above 14,000 that it's hitting today.

To which all hysteria I just want to say: everybody, please, calm down. Here, let me show you my own chart of exactly what the Dow has done this year. Citigroup might be up a little bit today, but it's still down substantially from where it started the year (it's at $47.95 now, after closing 2006 at $53.98). And while stocks are certainly doing pretty well right now, movements of a couple of hundred points in one day are really not very important when the absolute level of the index is 14,000.

dow.jpg

So take a step back, take a deep breath, and let the markets have fun with their intraday gyrations. It's really no big deal.

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