The Dow Is Setting Its Sights on 13,000

Call me a raging bull. Anyone who has followed my writing on RealMoney since December 2000 knows that I never predict specific levels in the market indices. Until now, that is.

I won't give you an exact date, but I will say this: On the basis of my quantitative valuation work, I wouldn't be surprised if the Dow Jones Industrial Average trades in the 13,000-15,000 range over the next two to three years.

Any observer of the market can recite a litany of reasons to be cautious on equities. Leading the list is our hyperactive Federal Reserve Board. Rather than letting the markets be markets -- fulfilling their function of flushing out inefficiencies and imbalances -- the Federal Reserve has adopted a strategy of micromanaging the economy. Only a couple of years ago, the Federal Reserve pushed interest rates to 45-year lows amid angst over the lack of growth and the potential for a deflationary spiral. ...