Like most of us last week, Christopher Channer gave passing attention to the Dow Jones industrial average exceeding 12,000, and then went on to other concerns. But the crossing of that threshold prompted me to seek his counsel because of his credentials as a Dow diviner. Channer correctly predicted when the Dow would first top 10,000, which happened in 1999. A lot of people got that right as a short-term call, but Channer's judgment was in another league. He made his prediction in June 1990 in an interview with the late Edwin Darby that ran in the Sun-Times, nearly nine years ahead of the fact. At the time, it was so bullish as to strike some as daft; in June 1990, the Dow was around 2,800.

The obvious question was when the Dow would cross the next meaningful marker of 20,000. Channer, who used to work for the old Chicago Corp. and then for Morgan Stanley, is a cautious man and had to be coaxed into an answer. But he's also confident in himself, having ditched life in big firms to found Channer Investment Management in Inverness, a two-person boutique.

So he gave one, but here's a shameless preface to keep you reading. He doesn't have the rip-roaring outlook of 16 years ago, but believes in the steady profit performance of American companies. Channer is 60, and the years have taught him not to play with sectors. "Look at only those companies that have shown the best 10-year financial growth, and only if their stock prices come to you," he said. Channer mentioned Walgreen (WAG) as an example, but he otherwise stays away from stock picks for mass consumption.

He said that while the market is due for a correction, he's happy that there was little euphoria over Dow 12,000. That would be like a mother measuring her 12-year-old son and being surprised that he's taller than ever. "The conditions are right, so the index will grow," he said.

Now to the prediction: He calls Dow 20,000 as occurring eight years hence, October 2014. If he's right, he's projecting steady but historically average returns in the index over that period.

Here's a story from Channer: When he used to work at Morgan Stanley, he noticed that the firm's logo included a tiny right triangle over the "n" in Morgan. It looked like an arrow pointing northeast. He asked what it meant and was told it stood for the firm's belief that all investment intelligence comes from the northeastern United States.

There's all you need to know about those investment banks.

FUTURES SHOCK: The $8 billion buyout of the Chicago Board of Trade (BOT) by the Chicago Mercantile Exchange (CME) has produced a delicious irony. The Financial Times is reporting how the European banks are upset over the Chicagoans forming a near monopoly. These are the same banks that have been laboring to form a monopoly exchange in Europe. The Chicagoans beat them to it. If the French don't like this deal, it must be great, eh?

There's a chance, however, of antitrust pressure on the CME-BOT combine, especially if the investment banks work through their lobbying arm, the Futures Industry Association. For now, the FIA is taking a wait-and-see approach on the deal.

FEAR OF FLYING: If the robust state of the travel business has tempted you to invest in airlines, consider the following.

Last week, CNBC aired a documentary about AMR (AMR), the parent of American Airlines and the only big carrier to not seek bankruptcy protection. The program included comments from Robert Crandall, the famously blunt-spoken former CEO of AMR. "I've never invested in any airline," Crandall said. "I'm an airline manager. I don't invest in airlines. And I always said to the employees of American, 'This is not an appropriate investment. It's a great place to work and it's a great company that does important work. But airlines are not an investment.' "

Crandall noted that since the airline deregulation of the 1970s, some 150 operators have disappeared. "A lot of people came into the airline business. Most of them promptly exited, minus their money," he said.

Also, Morningstar analyst Brian Nelson published an analysis of regional airlines, which currently enjoy a profit tailwind. But Nelson believes the business model is unsustainable and that regional airlines rely too much on contracts with the larger, so-called legacy carriers that can move business around in search of the cheapest deal. Nelson counsels against buying companies such as SkyWest (SKYW), ExpressJet (XJT), Mesa Air (MESA) and Republic (RJET). HEADS UP: The meat market at the Chi-cago Mercantile Exchange should take note of a Bloomberg News report suggesting a Smithfield Foods (SFD) deal will drive up cattle prices. Smithfield is building a $200 million slaughterhouse in Oklahoma. Bloomberg quoted J.P. Morgan Securities analyst Pablo Zuanic as saying the operation will strain cattle supplies and drive up prices for processors, who already are losing $20 per slaughtered animal because of weak export demand.

CLOSING QUOTE: " . . . There are huge amounts of cash on the sidelines for individuals, corporations and countries, and our stock market on an individual basis offers some bargains. That's why there are so many stock buybacks and private capital buyouts of entire companies [i.e. Georgia-Pacific]. On an international basis, our corporations appear to be selling at bargain prices." --Carl Birkelbach, Birkelbach Investment Securities