The Dow Broke Through 11,000 this Week! Who cares?

Every time an index, especially the Dow, approaches and goes beyond round numbers (e.g. 11,000), you'll hear about it on the news.  Look to the New York Times, the Wall Street Journal, and the Chicago Sun-Times for examples.  Some claim it provides a psychological boost for the market.

Concentrating on a particular number as a milestone is silly.  11,000 is better than 10,990 the same amount that 10,980 is better than 10,970.  You don't see articles about 10,980.  11,000 is only impressive, because we use a base 10 number system.  If we used binary, reporters would have been going nuts when we crossed 10,000,000,000,000 back in July 2009 (that's 8,192 for those of you who aren't engineers).

It is useful to stop and reflect now and then, and perhaps using such numbers is as good a marker as any.  The markers shouldn't be given any special meaning, though.  The importance of particular numbers is simply a human construct placed upon an otherwise insignificant label.  The value of dollars and gold has a similar issue, but that is a conversation for another day.