(March 24) – “Yesterday, we recalled a luncheon speech by Ron Meisels in January, 1995, in which he daringly called for the Dow and the TSE to hit ‘10,000 by 2000,’” writes William Hanley in today’s Financial Post . “A technical analyst and president of P&C Holdings in Montreal, Meisels was confident of his forecast.

“Yet neither he nor anyone else would have been able to forecast how the TSE 300 would get to 10,000, the journey it would take and its remarkable composition at this juncture.

“The 300’s breaching 10,000 is impressive, coming as it did only three months since it passed 8,000 and more than four years after it hit 5,000.

“The feat is even more remarkable when it’s noted that Canada’s benchmark stock index was below 6,000 as recently as October, 1998, when the fallout from the Asian crisis threatened the world’s financial system.

“And yet,” Hanley continues, “while many long-suffering Canadian investors have been rewarded for their patience in sticking with a market that meted out punishment to capital over long stretches while American investors reaped rich returns, the story of the TSE 300’s rise somehow brings to mind the remark credited to Disraeli about ‘lies, damned lies and statistics.’

“And while we don’t want to rain on this particular numbers parade winding its way up Bay Street because it is a signal event in the life of our market and in the wealth-being of Canadians, we’d like to misquote and talk about ‘lies, damned lies and indexes’ and put the advance in perspective.

“The strong domestic economy does play a part in the health of the stock market and the TSE 300. But the market and the index do not mirror the economy and ‘the index does not reflect the internal dynamics of the market,’ says George Vasic, a strategist at Bunting Warburg Dillon Read who devised the ‘TSE 298’ to give a picture of the market’s progress minus the presence of the two 8,000-pound gorillas heaving the index higher in the past year, Nortel Networks Corp. and BCE Inc.

“For the record, while the TSE 300 closed at 9,990.13 yesterday, the TSE 298 closed at 7,331, a reflection of the unsettling reality that more than 70% of the 300’s rise this year comes from the presence of Nortel and BCE, which accounted for 81% of the gain in 1999.”