Apple to Join Dow Jones Index This Month

CommanderFrank

CommanderFrank

Cat Can't Scratch It
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May 9, 2000
Messages
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Excuse me AT&T, but I believe you are in my seat, said Apple to the telecom conglomerate.:D Apple is about to join the ranks of the high and mighty this month when the company takes its place in the Dow Jones Industrial Average, replacing AT&T, a 100 year member of the Dow.

Apple’s entry to the 119-year-old index has been delayed because the company’s high share price threatened to distort the 30-company index.
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And the Apple distortion field continues to grow.
At some point this bubble will pop, and the bigger it grows, the more it's going to destroy when it finally blows.
 
nutzo said:
And the Apple distortion field continues to grow.
At some point this bubble will pop, and the bigger it grows, the more it's going to destroy when it finally blows.
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You guys have been and will continue to say that Apple is failing and will die, even though they continue to break records every single year.
 
I thought the real reason for adding them was actually quite interesting

THE REASON

For all the symbolic importance, the trigger for the move is less colorful. The manager of the index, the S&P Dow Jones Indices, said it's making the change in response to a planned stock split for Visa, another Dow member.

After its four-to-one split, Visa will wind up with a lower price. S&P said that would reduce the weight of the information technology sector in the Dow because Visa, a credit-card and payment-processing giant, counts as a tech stock. Adding Apple will help balance out this reduction.
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caddys83 said:
So AT&T got the boot?
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Yes, AT&T isn't a tech stock. Their business is a protection racket.

"Nice streaming business you have there Netflix. It would be a shame if something happened to your connection to your customers" :D
 
Tak Ne said:
Yes, AT&T isn't a tech stock. Their business is a protection racket.

"Nice streaming business you have there Netflix. It would be a shame if something happened to your connection to your customers" :D
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Might be true but Verizon is staying and only AT&T is going ... based on one analysis I saw the reason is price,

Blitzer also indicated that the index picked AT&T to receive the boot for two reasons: the telecom company has one of the lowest prices in the index and the Dow is over-weighted in telecom. “AT&T and Verizon are quite similar, though AT&T has a smaller market capitalization,” he said. Therefore, Verizon will be the company to represent the telecom sector in the index.
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The complete list of companies in the DJIA (after the swap) will be:

3M
American Express
Apple
Boeing
Caterpillar
Chevron
Cisco
Coca Cola
Disney
Dupont
Exxon
GE
Goldman Sachs
Home Depot
IBM
Intel
Johnson & Johnson
JPMorgan Chase
McDonalds
Merck
Microsoft
Nike
Pfizer
Proctor & Gamble
Travelers
United Technologies
United Health
Verizon
Visa
Wal-Mart
 
The entire stock market is a big speculation game. It needs to be razed and replaced with a different ownership model. One that benefits actually performance over media buzz and public emotion. Apple would still be high, but not this inflated high which is going to ruin a lot of people's day who don't know or don't have the resources to time the exit.
 
jpm100 said:
The entire stock market is a big speculation game. It needs to be razed and replaced with a different ownership model. One that benefits actually performance over media buzz and public emotion. Apple would still be high, but not this inflated high which is going to ruin a lot of people's day who don't know or don't have the resources to time the exit.
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a) That's an impossible proposition, since it's impossible to take people's emotions out of the game.

b) I'd love to understand how Apple is overvalued or in a bubble considering it's P/E ratio lags the S&P500 average and they have an enormous cash pile with consistently growing sales. Just because something has a high market cap doesn't automatically mean it's overvalued.
 
The only people that care about the Dow don't understand the Dow has no real bearing or information about the health of the market. Apple joins the Dow, AT&T's 30 points are removed from the average, Apple's 130 are added, and the Dow jumps up to new "record highs".

My understanding is that 100pts from a stock that has a market cap of $1million, is worth the same as 100pts of a stock that has a market cap of $1billion. It only tells you anything at all if your mix of stocks in the average accurately mirror the mix of stocks in the total population.
 
spugm1r3 said:
The only people that care about the Dow don't understand the Dow has no real bearing or information about the health of the market. Apple joins the Dow, AT&T's 30 points are removed from the average, Apple's 130 are added, and the Dow jumps up to new "record highs".

My understanding is that 100pts from a stock that has a market cap of $1million, is worth the same as 100pts of a stock that has a market cap of $1billion. It only tells you anything at all if your mix of stocks in the average accurately mirror the mix of stocks in the total population.
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Except Visa is splitting 4:1 so they drop from 270 to 65 ... most articles were clear that part of the reason to add Apple at this time was to offset the Visa drop ... AT&T is considered less important these days than Verizon so they are out while Verizon remains to represent the Telecom segment (this is unlikely to change since none of the other Telcos are strong enough to represent their segment in the Index and Verizon is the cream of the crop from a profit and stock performance standpoint) ... the Dow certainly has its flaws and there is definitely a manipulative effect to this change, however, if they were adding Google to the Index I think everyone would be ecstatic, but because it is Apple everyone is complaining ;)
 
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