volatility before crash, page-81

Some thoughts on a simple method discussed a bit ....

Taking the chart of the DOW and extrapolating what the actual growth rate should be for share prices by picking points starting from 1987 thru the 4000@'95 gives projected points in Oct 2008 at say 7200 or 8000 depending on whether choose at pre '87 crash or bottom of '87 crash (of course approx as a bit subjective on intersection points chosen)

Is it fair to assume that the rate of growth is more along those lower lines bring up to approx 7200 - 8000 range in Oct 08 (ie now) ?

OR

(a) is it necessary to go back before '87 to get a better long term trend line?
(b) seems such a trend line says that growth rate post 4000 @ '95 is too steep, perhaps that steeper rate could be contributed by pick up of emerging countries and so the correct trend line should be above 7200-8000 ?
(c) this method just too simple a way of looking at things ?

what i do like about this method is that it is thinking about stock market indexes as the economic progress of mankind and acknowledging that progress goes up over time , and at some rate , but that that rate is bounded by real world wealth creation that can't exceed avaliable resources. Although sp over ( and under) estimates the growth rate they should always eventually (if only after a correction) represent the true world position.

I'm not sure that this way is best way to analyse things just interested that it lines up a bit with other trend analysis on this thread possibly

dyor and all the best :)