This U.S. bull market looks mighty unimpressive from overseas

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The stock market has been breaking lots of records lately. Sort of. Wowsers! The Dow closed above 14,000 for the first time! Isn’t that exciting? Not really. In his NYT column Wednesday David Leonhardt made the point that it’s silly to get excited about such nominal-price milestones:

The S.& P. 500, which is a much better measure than the Dow, closed yesterday at 1,549, just 1.4 percent higher than the peak it reached in March 2000. Think about what that means. While the price of nearly everything has risen over the least seven years — while the price of bread has increased almost one-third, for instance — stocks have barely budged. They have only marginally outperformed cash sitting in a bureau drawer. So if we are going to talk about a stock market record, we should be doing the same for a whole lot of other things: Loaves of Bread Surge to New Highs.

The point that this hasn’t been such a great decade for stocks in the U.S. is made even more dramatically, though, when you adjust the market’s performance for the value of the dollar abroad. Here’s what the Dow looks like since the beginning of 2000:

Now it is worth noting that, even after the adjustment, the Dow has been rising since early 2005. But it’s still far from its past highs, and it has underperformed most other major world markets.