In my final “Fool Revisited” post this week, I will be finishing off my mini-series on the Dow with the remaining seven components of the Dow (at least at the time). The previous three entries of this group covered the oldest members of the Dow, the newest members, and a group where each company had at least 20 years as a member of the Dow Jones. This final article talks about the remaining seven companies, and as mentioned in my article, all these companies were added on two separate days in the late ‘90s: March 17, 1997 and November 1, 1999.
My next “Fool Revisited” piece is the third entry from my mini-series on the Dow Jones (you can read Part 1 and Part 2 at those links). Like the previous articles, I broke the 30 components of the Dow into 4 groups based on how long they have been assigned to that garbage index (you’re weekly reminder that I really hate the Dow Jones Industrial Average), and the group below had been on the Dow for at least 20 years at the time of article publication. And unlike the previous articles, all nine stocks profiled are still in the DJIA.
The intent of this series was to introduce the members of the Dow, and the next logical step was to discuss whether or not a company’s placement on the Dow affected stock performance. Unlike the members of the S&P 500 – which find homes in a LOT of institutional funds – the number of Dow funds and ETFs out there are pretty limited.
This is often why you’ll see above average gains in a stock when it is added to the S&P 500, since there are hundreds – if not thousands – of stock funds and ETFs that must purchase shares in the company. The inverse is true as well; when a stock is removed from the S&P 500, it tends to be sold off a bit and lose some value. This doesn’t appear to be the case with the Dow, but it is definitely something that I want to look at in a bit more detail in the near future. Continue reading →
My next “Fool Revisited” piece is the second in the Dow series that began with this post. Whereas that piece discussed the old stalwarts of the Dow, today’s historic article examined the seven most recent additions (at the time) to the Dow Jones Industrial Average. The premise behind this series of articles was two-fold: first, we could ticker the index, so it let us put our articles in another place in hopes that more people would see. Second – and perhaps most important from an investing standpoint – I wanted to see if the addition to the Dow had improved the prospects of the stock, giving my readers something to look for should other changes be announced to this silly index that too many people care about.
Of the seven companies profiled, two are no longer included in the Dow Jones. Kraft Foods left the index in September 2012 after its split into Mondelez International and Kraft Foods Group, and was replaced by UnitedHealth Group. Bank of America (NYSE: BAC) left the index in September 2013, replaced by the “larger” (i.e. higher-priced) Goldman Sachs.
My final “Fool Revisited” piece for today was the first article I wrote about the Dow Jones Industrial Average (^DJI). I definitely have a love/hate relationship with this particular index – it’s an arbitrary list of 30 companies picked by the folks in charge, weighted by price and not market cap – and it is talked about WAY TOO MUCH in the financial media when it passes certain big numbers. I wrote about when it went past 20,000 last February (it’s currently just a tad under 25,000) and it’s just a stupid measure if you care about what the “stock market” is.
The love part of the relationship comes from the fact that I was able to generate some content of this arbitrary list of companies. And this article was the first of many where the Fool tried to take advantage of “tickering” the index so that they got more page views. Not a bad idea, honestly, especially with the wide coverage that the Dow receives nearly every day in the financial press. Continue reading →