HobeSoundDarryl
macrumors G5
Even Flo has a huge fan base (do a search for Progressive Flo fans and you'll probably be shocked). Progressive without a Flo is just insurance for sale. AT&T without Lily is just invisible data flows for sale.
Got a tip for us?
Let us know
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
Apple to Replace AT&T in Dow Jones Industrial Average on March 18
- Thread starter MacRumors
- Start date
- Sort by reaction score
even without iPhone, they made over 20 billion in revenue. more than Google, on par with Microsoft.
HobeSoundDarryl
macrumors G5
Any time a stock is replaced in an index like this one, all the funds (mutual and ETFs) that mirror the index have to dump the stock dropped and buy the new stock added. Buying stock at institutional levels tends to drive up that stock's price.
Other funds (and investors at large) will see an opportunity here and also buy some AAPL to try to capitalize on that "forced" buying. More buying will also tend to drive the price of the stock up.
Those holding the stock before the news leaks probably sees a nice uptick in the stock. Of course, anything that causes a spike in price can sometimes beg for profit-taking (selling). So, it's not necessarily a good thing for long. Here's an interesting article that talks to how the initial spike from being added can be followed by some price slippage: http://www.marketwatch.com/story/will-2015-be-apples-blue-chip-debut-2014-12-15
Other funds (and investors at large) will see an opportunity here and also buy some AAPL to try to capitalize on that "forced" buying. More buying will also tend to drive the price of the stock up.
Those holding the stock before the news leaks probably sees a nice uptick in the stock. Of course, anything that causes a spike in price can sometimes beg for profit-taking (selling). So, it's not necessarily a good thing for long. Here's an interesting article that talks to how the initial spike from being added can be followed by some price slippage: http://www.marketwatch.com/story/will-2015-be-apples-blue-chip-debut-2014-12-15
Last edited:
Apple split their stock largely for this reason. Having dividends helps too, considering all 30 component stocks provide dividends.
----------
He/she knows exactly what he/she is talking about. From a January Motley Fool article: "Apple looks more like a Dow shoo-in than ever since it split its stock 7-for-1 last year. You see, the Dow Jones Industrial Average is weighted by price, so companies with higher stock prices have a greater effect on the index. This outdated model, a relic of the Dow's formation in the early 1900s, has led certain companies to have outsize influence on the index despite their relatively small market caps. That's why for years Apple was essentially ineligible for inclusion in the Dow; its high stock price would have given it far too much influence on the overall index. However, since the stock split, its share price would be middling for a Dow component." (http://www.fool.com/investing/gener...-should-be-added-to-the-dow-jones-indust.aspx)
And here: http://www.cnbc.com/id/102459031#.
Here: http://www.forbes.com/sites/maggiem...-replace-att-in-dow-jones-industrial-average/
And so forth. Without the stock split, aapl would not be part of the Dow 30.
Last edited:
The Dow Jones is irrelevant. The CRSP US Total Market Index (which is a far superior index to track the overall US stock market) is better.
Exactly, the worlds most valuable company should be included in the Dow Jones, actually it's weird that it took this long? Stock split
Actually it does no such thing. The DJIA is an antique that survives from the days of adding machines. It is representative of very little and provides insight into nothing, really.
----------
Because it's arbitrary. Always has been. Always will be.
Stalker!
Now how about the Wendy's girl?
I normally don't do requests but it's almost the weekend (and lunch on the east coast) so enjoy ...
The Dow Jones Averages (industrials being only one of several; the others are rarely mentioned) were created when reporting broad market performance was basically impossible any other way. The Dows could be calculated rapidly and easily, especially because they are not trade-weighted. It's essentially a sampling method, and a deeply flawed one at that. Why anyone would still be interested in a crude sampling method when the complete data on market performance is so readily available today, is a great mystery. The DJIA really should just go away.
@AndyUnderscoreR: ???
Let's hear from David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices.
Quote: "The DJIA is price weighted so extremely high stock prices tend to distort the index while very low stock prices have little impact. The timing of Apple’s addition to the DJIA hinged on two stock splits: Apple’s 7:1 last June and Visa’s 4:1 on March 19th this year. Apple’s split brought the stock price down closer to the median price in the DJIA...."
Yes, the iPhone is the the bread winner. But most other companies would love Apple's small change like App store or iTunes. They still generates over billion dollar each in profit.
I wouldn't mind to have those pocket change
No, he is right. AAPL was not in the DJIA before the split because the share price was too high. Unlike the modern indexes, which are trade-weighted, the DJIA is computed by essentially adding the index share prices together. So a company with a share price of $700 would have seven times the influence over the index compared to a stock selling for $100, even if the company with the $100 stock price was worth far more in market cap. This is why the DJIA is such a useless barometer of market performance.
I'm no stock market professional but a few things about this worry me:
1)Apple makes essentially 3 products...phones, tablets, and computers. Although phones and tablets sell quite well...they are products that have plenty of competition and as technology has shown over the decades, 1 product (Blackberry ring a bell?) that rocks for 5-10 years can be gone in an instant. Apple computers are used by 15% of the world population at best.
2)Replacing ATT...everyone needs phone and internet service...which is what ATT provides...as well as reselling the iPhone and a bazillion other phones. I'm not sure how they chose ATT to be replaced since they are essentially a Service company while Apple is clearly a product company.
3)No evil forecasting here but going back to #1, what else is Apple going to do with the 7th version of the iPhone or iPad that is going to sell like hotcakes (as well as understand the market is already very very saturated with their own products as well as competition)?
I guess at the end of the day it all comes down to numbers and profits...not predicting the future. However, how often are stocks replaced?
On a side note, I think the iWatch will be a flop...for a lot of reasons that have already been posted (price, fashion, and battery life). Price alone rules me out...I'm not plunking down $350 for a watch when I have purchased some pretty stylish watches for less then $300. But again, watches are really about fashion. Also, in addition to the price, if iWatch needs to be charged more than once a week, to me, that's ridiculous (I know there are battery technical limitations but why even bother creating the product...might as well buy a car that only gets 1 mile to the gallon)
1)Apple makes essentially 3 products...phones, tablets, and computers. Although phones and tablets sell quite well...they are products that have plenty of competition and as technology has shown over the decades, 1 product (Blackberry ring a bell?) that rocks for 5-10 years can be gone in an instant. Apple computers are used by 15% of the world population at best.
2)Replacing ATT...everyone needs phone and internet service...which is what ATT provides...as well as reselling the iPhone and a bazillion other phones. I'm not sure how they chose ATT to be replaced since they are essentially a Service company while Apple is clearly a product company.
3)No evil forecasting here but going back to #1, what else is Apple going to do with the 7th version of the iPhone or iPad that is going to sell like hotcakes (as well as understand the market is already very very saturated with their own products as well as competition)?
I guess at the end of the day it all comes down to numbers and profits...not predicting the future. However, how often are stocks replaced?
On a side note, I think the iWatch will be a flop...for a lot of reasons that have already been posted (price, fashion, and battery life). Price alone rules me out...I'm not plunking down $350 for a watch when I have purchased some pretty stylish watches for less then $300. But again, watches are really about fashion. Also, in addition to the price, if iWatch needs to be charged more than once a week, to me, that's ridiculous (I know there are battery technical limitations but why even bother creating the product...might as well buy a car that only gets 1 mile to the gallon)
Last edited: