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Dow is a horrible index. It's price-weighted, i.e. higher priced stock has a greater influence than lower priced stock on the index. Apple at $180/share has 2
by ww520 8y ago
Dow is a horrible index. It's price-weighted, i.e. higher priced stock has a greater influence than lower priced stock on the index. Apple at $180/share has 2+ times less influence than Boeing at $375/share on the index, and yet Apple's market cap is $850B, 4 times of Boeing's $212B market cap.
The Dow index is pure BS.
- CydeWeys 8y agoIt boggles my mind that news reports feature the Dow so prominently given how much worse it is than the S&P 500. The Dow is pretty much unsuitable for any purpose save for historical comparisons dating back prior to the advent of the S&P 500.