Mike Panzner on the Net change in the constituent members of the Dow from the January 14, 2000 record close through earlier today…
Dow Components
| Eastman Kodak | -62.22% | [No longer in Dow] |
| General Motors | -60.74% | |
| Intel Corp | -60.18% | |
| Microsoft Corp | -51.27% | |
| Home Depot Inc | -41.21% | |
| Merck & Co | -39.47% | |
| Intl Paper Co | -38.47% | [No longer in Dow] |
| Du Pont | -36.06% | |
| Honeywell Intl | -31.31% | |
| IBM | -31.19% | |
| Alcoa Inc | -30.83% | |
| General Electric | -29.46% | |
| Coca-Cola Co | -26.62% | |
| Wal-Mart Stores | -23.24% | |
| AT&T Inc | -21.05% | |
| Hewlett-Packard | -18.83% | |
| Disney (Walt) Co | -7.43% | |
| McDonalds Corp | -6.35% | |
| JPMorgan Chase | -4.43% | |
| ****************************** | ||
| Dow Jones Indus. Avg -0.12% | ||
| ****************************** | ||
| Procter & Gamble | 7.72% | |
| American Express | 19.73% | |
| Citigroup Inc | 24.22% | |
| Johnson&Johnson | 38.18% | |
| 3M Co | 50.67% | |
| Exxon Mobil Corp | 59.09% | |
| Boeing Co | 80.93% | |
| United Tech Corp | 98.52% | |
| Caterpillar Inc | 153.77% | |
| Altria Group Inc | 220.83% | |
| SBC Communication | [Now part of AT&T] | |
>
What’s amazing is that 20 of the 30 Dow Components are off their
highs, and that so many of the them are WAY OFF their 2006 highs. Of
the 20 Dow components that are below their 2000 peaks, 14 of those 20
off by more than 25%.
That is the nature of a price weighted index . . .
>
UPDATE: October 27, 2006 11:10am
Attention Slate readers: Be sure to also see our comparisons between the Dow vs Money Market since the market peak. You may be surprised to learn that since January 2000, cash (yes, cash) has outperformed the Dow.
Unimpressive
Note to CNBC: As youre trying to cheer the Dow on to a new record close, you should probably drop that banner that says:
Only 10 of the Dow 30 higher since last record high.
It doesnt look good.
Update: At The Big Picture,…
How would one begin to factor in inflation, or relative strength of the dollar into these numbers?
Even worse in real dollar terms.
Per CNBC talking heads, denominated in euros, the dow is still something like 40% off its high… at least that is what I think I heard. Watching this channel all day everyday, it starts to all run together. But I at least think I’m right on that.
Does this include dividends?
per “SBC Communication [Now part of AT&T] ”
More accurately, the “old” AT&T is now part of SBC . . which then changed it’s name to AT&T to leverage the more well known brand.
You know this list makes me think that maybe the DOW is a bad idea.
What if all you want to do is show the positive side of the economy. I mean by adding and removing DOW components to project a biased “up” picture of the economy. Is it as simple as just remove the factor holding back the average.
Is this really a good picture of the United States Economy or a better indictator of the world economy with a little US thrown in?
I am not sure but as this market and this current period economy moves along I am starting to see a disconnect between the man on the street and the DOW.
This may not be the topic at hand but this is as good a place to discuss this a any.
There was that $TICK 1250+.
Now after that minor dip, all the shorts are nervous and all the longs are thinking they are untouchable.
Great setup. Now the fun begins.
And how about that Cramer comment when he said oil has no where to go but down and he was about as certain of this as anything. That was at $60.80 and within a day of the bottom.
Oils at $62.80 now.
Dow has lost half of its value compared to gold, since 2001. I don’t hear the cheerleaders discussing this. Also, why are the all-time highs in gold/oil/etc reported in nominal terms, but the Dow is not. Makes no sense.
http://stockcharts.com/h-sc/ui?s=$INDU:$GOLD&p=M&yr=7&mn=0&dy=0
If you’re not a subscriber, looks like stockcharts only goes back 3 years, but this chart is nothing new.
Will, I don’t know if dividends are included. It was one of those stats people spout off to support their argument.
David, it is very easy to argue that the average joe isn’t experiencing wall street’s optimism. All you need to do is cite the negative mutual fund flows over the last few months. The low volume “stealth” rally doesn’t have much support from the public.
Lastly, watching CNBC makes me think I am the only one of the planet who isn’t an uberbull.
Rotten durable goods report? Buy oil!
Slowing construction? Buy oil!
Fed not yet out of the picture? Buy oil!
And then buy gold!
To RMX: Take the DOW for what it is worth: it is a blue chip index. If you don’t retire stocks from the index you will have an index that doesn’t reflect a changing economy at all.
If you consider AT&T’s reverse split, it went down closer to 60-80%. Oh, how I know it. While watching the internet bubble, the telecom bubble went unnoticed by me.
Mike good point on the “stealth” rally that is a good way to define it.
And actually that is a good way of looking at this market. Institutional investors / hedge funds / big players are the ones with money in it. The rest are just sitting in their overleveraged ATM’s waiting for a weatherman to tell them which way the wind is blowing.
Cramer predicts Hurricanes.
Paul jones,
You probably were addressing me. Names are listed under posts not above.
And I agree but should we also pick some losers as well as winners. Retiring a stock is one thing but shouldn’t we put companies that reflect changes in the economy as a whole.
Maybe the concept of the DOW is past its prime. Harking back to a time when yes an economy was defined by a key set of companies and if they were doing well then the economy was doing well.
But maybe now we should focus on a truer picture of the economy, if you want to show the state of that economy. Maybe we need to add losers into the winners. Or just use the DOW as one big marketing tool for stockbrokers hawking securities.
It is just a thought and not really thought completely through.
Seeing good companies languishing for some years whilst their earnings and dividends rise always makes my old heart beat a little faster.
Let’s throw in PFE, VZ and AIG – and take out IP, EK – to reflect the current Dow 30.
Are there not 5 good companies at reasonable value in there?
Companies whose current and 5 year average ROE, ROIC ( ex financials), earnings and dividend growth is above 10%. And that are selling for reasonable value at the moment. And whose history suggests a good chance of nicely surviving the next recession.
Of course there are.
There’s some dreadful companies in there too – but they don’t have to be bought.
The people who make these lists have to put in all the rubbish as well.
They deserve our sympathy – but not our loyalty.
Now, go and find those 5 good companies – I’m far too old to be doing all the hard work for you.
Contributors for the Dow’s Recent Rise: Since January 14, 2000
I just received this e-mail from Barry Rritholtz at The Big Picture (www.bigpicture.com) web log. Barry said; “We took apart the Dow yesterday — see this”: Click here to see the change in the Dow components: The Big Picture Thank…
Dow components compared to all-time high
I am on a plane, en route from Dallas to Atlanta. CNN was reporting the Dow was within just a few points and inching closer to its all-time high as I was getting on the plane. By now, it may