NEW YORK (CNN/Money) - Climbers who go too high and too fast in the big mountains put themselves at risk of several altitude-related sicknesses, the worst of which by far is high altitude cerebral edema, or HACE.
Due to swelling in the brain due to a lack of oxygen, symptoms of HACE include headaches, a staggering walk that makes the mountaineer seem severely intoxicated, hallucinations and psychotic behavior. It's imperative that anyone suffering from HACE be taken to a lower altitude as quickly as safely possible.
Which brings us to Dow 10,000, that lofty place whose thin air has been incredibly dangerous for investors' portfolios in the past. Never mind the broken dreams and missing fingers of the past, the market again seems intent on climbing to 10,000, and now it has less than 700 points to go. Pass the oxygen.
Accidents in North American profiteering
Lots of people remember the first time it looked the Dow would finish above 10,000, back in March 1999. The bell rang, the Dow sat at 10,001, and New York Stock Exchange head Dick Grasso, along with a bevy of other important people, started throwing Dow 10,000 hats out onto the Exchange floor. And then as closing orders came in, the Dow settled at 9,997. It was a big let down, but nothing like the let down that was in store for investors a year later when the market started to fall apart.
Once the bear took control it seemed, for a while there, that 10,000 was a decent place to buy at -- a support level that the market could spring from. Beginning in September 2001, when the Dow fell through 10,000 decisively, that was no longer true. Since then it has flipped through 10,000 7 times, always to fall back. The last time the Dow saw 10,000 was over a year ago, back in May 2002.
Given the painful experiences above 10,000 in the past, it will be interesting to see if the Dow can keep up its head of steam or if investors, remembering past injuries, will beat a retreat. For certain, the Dow is much less expensive than when it peaked out in early 2000. Back then, its price-to-earnings ratio was around 27. Now, it's around 18. What's more, with the intense focus on company bookkeeping that's developed over the past year, the quality of Dow company earnings is much higher than during the bubble years.
That doesn't mean it's cheap, however. Through much of the 1990s, the Dow 30 carried a lower P/E than now and before the 1990s the Dow's valuation tended to be much lower. A decade ago the Dow carried a dividend yield of around 3 percent -- low by historic standards. Now its dividend yield is 2.1 percent.
Moreover, looking beyond the Dow, stock valuations overall are rich. The S&P 500's PE is back over 20. And the tech-filled Nasdaq 100's PE is pushing 50. When investors see the Dow approach the 10,000 mark, they may take a hard look at the market and decide that it's become too expensive again. And take it as an opportunity to get down off the mountain.