Forgot your password?
typodupeerror
Businesses The Almighty Buck Apple

Apple Too Big For the Dow Jones Industrial Average 218

Posted by samzenpus
from the we're-gonna-need-a-bigger-stock-ticker dept.
An anonymous reader writes "Apple is clearly the hottest tech stock on the market right now and the company is clearly at the vanguard of technological innovation. Consequently, many have wondered why Apple isn't part of the Dow Jones Industrial Average (DJIA). As it turns out, Apple's astronomical share price effectively prohibits the company from joining the DJIA as it would disproportionately influence the index."
This discussion has been archived. No new comments can be posted.

Apple Too Big For the Dow Jones Industrial Average

Comments Filter:
  • by Anonymous Coward on Wednesday September 21, 2011 @06:53PM (#37473900)

    The only people who really pay attention to the Dow are the talking heads. The money runners look at the S&P 500 when benchmarking market returns.

    The Dow is an archaic measure that for some reason sticks around.... tradition?

  • So? (Score:4, Informative)

    by Oxford_Comma_Lover (1679530) on Wednesday September 21, 2011 @06:54PM (#37473918)

    *Shrugs*

    So? If they want to be in the Dow they can run a few stock splits.

  • DOJA != DJIA (Score:5, Informative)

    by spazdor (902907) on Wednesday September 21, 2011 @06:57PM (#37473958)

    Dow Jones Industrial Average (DOJA)

    Reasonably sure that no one in the world abbreviates it like that. In fact, Googling "dow jones" and "doja" together, brings up... This exact news story. And no others.

  • DJIA is (Score:5, Informative)

    by Z8 (1602647) on Wednesday September 21, 2011 @07:08PM (#37474054)

    The Dow Jones is an older index in which each company's weight in the index is determined by its stock price. In more recent indicies like the S&P500, stocks are weighted by market capitalization. Assigning weights by stock price is silly because it makes no intuitive sense and means extra work is needed to prevent events like stock splits from moving the index around.

    So anyway, this isn't really about Apple, it's just a technical detail about a legacy index. Apple's share price is high ($412 as I type this), but so are plenty of other companies like Google ($539) and Berkshire Hathaway ($101250!).

  • Re:Stupid algorithm (Score:4, Informative)

    by FooAtWFU (699187) on Wednesday September 21, 2011 @07:15PM (#37474106) Homepage

    Congratulations. You've just discovered why there are dozens of S&P 500-based mutual funds, but there aren't really any DJIA mutual funds.

We are Microsoft. Unix is irrelevant. Openness is futile. Prepare to be assimilated.

Working...