Anonymous asked:

Note that DOW jones is stock-price weighted as opposed to Market cap weighted (like S&P 500). As a result, apple would have more than 20x the weight compared to a $30 stock. This fact is grossly inflating apple's hypothetical effect on the index. Dow would never add a $600 stock to its index as it would make the index even more useless than what it already is. Great blog. -Morten Hoyer

That’s fair, though Nash technically proposed that the Dow should have added Apple in mid-2009. Apple’s share price then was just under $150/share. That’s well below IBM’s current price and close to Caterpillar’s.

  1. parislemon posted this