Apple, Cisco, and the Dow Jones Industrial Average.

I’ve never been thrilled with the Dow as an indicator of the health of the economy (just thirty companies are factored in, using some pretty crude calculations), but Adam Nash has done the math on one facet of why it’s lousy. Famously, in 2009, Dow Jones dropped GM, and added Cisco to the DJIA instead of Apple. According to Nash (I’m not smart enough to be able to duplicate his math, so I’m trusting him here), if that decision had gone the other way, on Monday the DJIA would have closed at $14,926 instead of $12,874. That’s more than a $2,000 difference. 

Published by Waldo Jaquith

Waldo Jaquith (JAKE-with) is an open government technologist who lives near Char­lottes­­ville, VA, USA. more »

3 replies on “Apple, Cisco, and the Dow Jones Industrial Average.”

  1. I think you’ve got your numbers reversed there – it would have closed at $14,926 instead of $12,874.

  2. it’s all about the S&P 500- even that has become overweighted to Apple. Their last quarter sales seemed so epic that it seems difficult to sustain (all trees don’t grow to heaven). Will labor cost stay low? is just one of many questions (human rights and other issues seem to be heating up)

    Apple value is not sustainable unless they take over the PC market. Given the cost of a PC hardware vs Apple (user base, coporate sales and so many other reasons) this seems unlikely.

    Apple has made this market look better than it would be but remember the market is always looking 6 months in the future and reacting to the news of the present.

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