4 ms·
What does not 'still there' mean though? You lost all your money? Not quite -- Dell was number 51 and went private. Then they bought EMC, and have since gone pu
by jldugger 6y ago
What does not 'still there' mean though? You lost all your money? Not quite -- Dell was number 51 and went private. Then they bought EMC, and have since gone public again. I'm not sure that investors lost through these transactions, considering DELL easily has enough market cap to justify a slot on the SP500. That's just the one off the top of my head, and https://en.wikipedia.org/wiki/List_of_S&P_500_companies#Selected_changes_to_the_list_of_S&P_500_components https://en.wikipedia.org/wiki/List_of_S&P_500_companies#Sele... has a ton of acqusitions on the list.
Also worth mentioning that market cap weighting means can be protective -- if a stock enters at the low end of the wighting spectrum, underperformance is less impactful. But also when a fraud like Enron comes along, it does commensurate damage to portfolios.
- jedberg 6y agoThat's the S&P 500, not the Fortune 500.
- jldugger 6y agoOh, right. Well, i don't think you can invest in the fortune 500 =)
- jedberg 6y agoSure you can. You can invest individually in the stocks, or in VOO. But the point was a lot of the companies on the Fortune 500 are considered good buys from a value investor perspective, yet chances are 1/2 of them won't be a good buy in 10 years by the same measure.
- jldugger 6y agoFortune 500 contains privately held companies I don't have the opportunity to invest in. Wikipedia points out the first list "limited to companies whose revenues were derived from manufacturing, mining, and energy exploration" so it makes a little more sense that only 10 percent are still on it. In contrast, VOO is SP500, which is entirely publicly traded and features weightings
- jldugger 6y ago>a lot of the companies on the Fortune 500 are considered good buys from a value investor perspective That, I think, is a citation needed, since IIRC, F500 is derived from revenue not book value.