-- It refers to a specific dollar or performance level.
-- It sets a specific time frame.
Let's look more closely at the assumptions. They are:
-- The steep decline in inflation and interest rates has ended.
-- Economic growth is likely to be sluggish amid labor-force expansion and limited productivity gains.
-- Emerging-market companies expand and challenge those in developing markets.
-- Technology giants disrupt established businesses.
-- Smaller companies compete worldwide for customers via the Internet.
Perhaps some of these will turn out to be true, perhaps not. But all of these exist in a dynamic market place, and to assume that there will not be countervailing responses is hopelessly naive.
The interest-rate issue is emblematic of the problems in this kind of forecasting exercise. I have no idea if rates have bottomed, and neither do the authors of this report. The countryside is littered with the bodies of economists who built careers around forecasts that rates can't possibly fall any further. We were told they were too low at 2 percent and had bottomed out. Then they hit 1 percent. Then zero. Now rates are negative. What are the odds that forecasts of where they will go during the next 20 years is wrong?