Jump to content

Talk:Dow Jones Industrial Average/Archive 1

Page contents not supported in other languages.
From Wikipedia, the free encyclopedia

Of the original twelve

[edit]

"Of those original twelve, only General Electric remains", clarfiy in what way, in term of the name? - Jerryseinfeld 02:16, 17 Dec 2004 (UTC)

I think what it means is that the company GE is still the same, since the other companies have either shut down, been bought out, or have been changed.Chaz 01:25, 8 November 2005 (UTC)[reply]

NPOV?

[edit]

"Because of these issues, the S&P 500 is becoming more widely quoted and used as a more realistic broad market performance indicator."

Is this accepted enough to be considered NPOV?-Grick(talk to me!) 22:47, Apr 8, 2005 (UTC)

Sounds fair to me; from a mathematical standpoint, 500 stocks (weighted by market cap) is a much better sample than 30 weighted by stock splits. Jon 13:40, 26 May 2006 (UTC)[reply]

Calculation

[edit]

Maybe someone can explain how the Dow Jones Index is calculated more precisely? Thanks, Abdull

Dow's Opening Price Each Day

[edit]

What about information that the Dow's opening price each day does not reflect the true opening price of all its components (thus rendering it a rather useless indicator), because not all of the 30 components open at the same time? (Only a few of its 30 components open right at 9:30. Nevertheless, the Dow opens when its first components open, using the previous day's closing price for each of the components that haven't opened yet. This is why, unlike say the NASDAQ, the opening price of the Dow is almost always very close to its previous day's closing price, but in the first few minutes after opening will tend to move more widely--as more and more of its components open.)

208.63.191.20 21:16, 28 February 2006 (UTC)[reply]

Please add biggest one day gains

[edit]

This would help balance the one day loses. Jon 13:40, 26 May 2006 (UTC)[reply]

Black monday graph

[edit]

That black monday graph is very misleading because it doesn't start at 0.. it did drop a lot, but we should represent the true scale, not an exaggeration like newspapers sometimes do. Mlm42 12:55, 6 October 2006 (UTC)[reply]

I believe that the point of the graph is to show the change in value over a period of time. The actual value of the Dow Jones does not matter but only the percentage drop. If a person talks about how the DJIA did for the year, the person would say that it is up or down X percent, not it opened the year at 10,000 and closed at 11,044. Also the scale is correct, it makes no claims of starting at zero, it says it starts at 1,700, and each interval is 1,000 points. I would like to comment though that it should display the entire year and not just a few months. Bear21 18:04, 6 October 2006 (UTC)Bear21[reply]

Price-weighted

[edit]

"The DJIA is criticized for being a price-weighted average, which gives relatively higher-priced stocks more influence over the average than their lower-priced counterparts"

I believe this statement is incorrect because Dow Jones weights each stock based in the inverse value of the stock. For example:

  • Stock A is valued at $100
  • Stock B is valued at $10

The weight of stock B will be 10 times the weight of stock A. If stock A rises $30, the overall average will increase by 1%. If stock B raises $3, the overall average will still increase by 1%.

This can easily be verified by downloading the daily spreadsheet from the link found in the Weightings section

--RichardKrog 21:09, 19 October 2006 (UTC)[reply]

I think you are mistaken. The "weightings" are not weights in the sense of a weighted average - in fact, they are not used at all in calculating the DJIA. I edited the "weightings" and "calculation" sections to explain what the weights are. The DJIA is simply the arithmetic average of the stock prices (it is scaled by a "divisor" that compensates for splits etc., but that scaling doesn't change the nature of the average). See www.cbot.com/cbot/pub/cont_detail/1,3206,1556+8705,00.html for an explanation. --169.230.94.21 23:56, 24 October 2006 (UTC)[reply]

I stand corrected and in awe that such an ubiquitous indicator is indeed price-weighted. Your edit makes it much clearer and removes a nasty word: "criticized"

--RichardKrog 05:21, 26 October 2006 (UTC)[reply]

$1 rise by any stock contributes exactly the same to the DJIA. In the direct computation of the average no stock has any more "weight" then the other. This is misleading so I removed it. What exactly is this "weight" that is being referred to? Ambiguous.

The dollars in the price of each stock have the same amount of weight. However, a percentage change in the price of a high-cost stock will impact the Dow more than the same percentage change to a low-cost stock. In a highly-simplified example, the Schoop Industrial Average (SIA) contains stock A and Stock B in Richard's example above. It is day one of the index, so the divisor is 2. Today, the SIA is (100 + 10) / 2 = 55.

The next day, an event occurs that makes stock A lose half its value. The SIA is now (50 + 10) / 2 = 30. If instead, stock B lost half its value, the SIA would instead be (100 + 5) / 2 = 52.5. As you can see, the price of a stock impacts its impact on the index. An alternative is a volume-weighted index, where the total market value of all outstanding shares is used as the weight. Hope this helps. Schoop (talk) 20:21, 22 September 2008 (UTC)[reply]

Restored the records of 2000

[edit]

I restored the line in "History" detailing the former records of 2000, since they stood for so long. The current records are sufficiently covered, both in subsequent paragraphs and the final section. (Incidentally, the Dow has never reached 12,148, on a theoretical or actual basis.) 65.27.233.132 22:01, 22 October 2006 (UTC)DAP[reply]

Life-of-index graph?

[edit]

I would strongly urge that someone with access to the data make a graph of the Dow over its entire existence. (With a logarithmic vertical axis, of course...) It would show the effects of the various wars, the crash of 1929, the black Monday of 1987, the dot-com bust etc. all in relation to each other. Wouldn't that be highly instructive? --169.230.94.21 00:14, 25 October 2006 (UTC)[reply]

At the bottom of this article are links to Yahoo! graphs of the Dow since 1928, both log and linear, which would show all three events sufficiently. Also, StockCharts has historical charts going back to 1901. I'm not sure where to get a graph going back to 1896. 65.27.233.132 00:42, 28 October 2006 (UTC)DAP[reply]

You can get a graph of the entire history of the Dow off the Dow Website (surprisingly enough). You can also find out at what level the Dow was on any day during its existence - its really quite a comprehensive resource to explore.jkm 08:50, 8 April 2007 (UTC)[reply]

the china stock which have restored the 2000 the hs index has —Preceding unsigned comment added by 121.28.97.206 (talk) 03:59, 22 November 2008 (UTC)[reply]

Request for research

[edit]

The following text was moved here from the article Ronnotel 14:57, 9 December 2006 (UTC)[reply]

the following needs validation, as i heard it some time ago and am unsure. Thanks, NormPierce@aol.com The proportionate bellwether significance of the DJIA in the US economy is that the total market capitalization of today's 30 component companies is about 28 percent of US wealth. The other two bellwether indices are the S&P 500 and Russell 2000, representing, respectively, xx and xx percent of US wealth.

Current event tag

[edit]

I'm taking the current event tag off this article because this article does not and is not intended to provide updates on the current value of the DJIA. This is not a newspaper article. --SueHay 16:47, 11 March 2007 (UTC)[reply]

Chronological Order of Listing

[edit]

It is a little bit of work, and I may do it myself sometime, but if someone out there wants to look up and put all the Current Companies into Chronological Order based on when they joined for their current stint - I think that would definitely add to the article. With the example of General Electric, it was taken off the Index in 1898, but rejoined in 1907 - so in fact there is no company that has been part of the DJIA continuously since Day 1, but I believe that General Electric would still be the longest continuously serving member of the Index. Cheers. jkm 09:13, 8 April 2007 (UTC)[reply]

In fact, Fill In the Joining Dates - with the exact dates if possible - and also some of those companies that joined prior to 1928. Referenced from http://www.djindexes.com/DJIA110/docs/ins-and-outs.pdf

The Dow Jones Industrial Average consists of the following 30 companies:[1]

When fully completed, this Chronological List can be transferred onto the main page. jkm 09:39, 8 April 2007 (UTC)[reply]

Co. & Inc.

[edit]

Would anyone mind terribly if I changed the company names to their usual marques? (eg International Business Machines Corp. -> IBM, Boeing Co. -> Boeing, etc) - Lalala666 05:01, 6 May 2007 (UTC)[reply]

Yes; I would. This is an encyclopedic endeavor, so we should attempt to be as correct and complete as possible.
In the case of IBM, I generally prefer to initially identify it as "International Business Machines Corp. (IBM)" and subsequently refer to it as IBM.
- Johnlogic (talk) 21:50, 18 January 2009 (UTC)[reply]

North American Co.

[edit]

In the list of the original twelve, why does the North American Company have '(Edison)' next to it? There no evidence that it had anything to do with Thomas Edison on the company's own page. Rojomoke 12:40, 20 June 2007 (UTC)[reply]

"largest one-day percentage gain" fact is wrong.

[edit]

The line starting "The largest one-day percentage gain in the index" doesn't seem to be right. Looking at the available data there's a gap between 03-Mar-1933 and 15-Mar-1933 of 12 days. The proportional return between these two dates is indeed 15.34% but it ain't a one-day return.

Alex 83.244.180.36 13:36, 11 July 2007 (UTC)[reply]

FDR closed the markets for 12 days following his inauguration. The gain did, indeed, occur in a single session, although it probably did result from twelve days of traders' reflections and decisions.

DAP

What about inflation?

[edit]

No mention of inflation adjustment. Lycurgus 20:16, 11 August 2007 (UTC)[reply]

THIS IS VERY IMPORTANT. I have been searching all over the internet. An article on a financial index that doesn't address whether the movement is "real" or "nominal" is lacking. From what I am reading other places and on wikipedia about how the DJIA is priced tends to suggest it is NOT adjusted for inflation? Could an authority PLEASE address this most critical issue. It should be noted in the first paragraph summary. The DJIA is a number (index) that means nothing without further explanation. —Preceding unsigned comment added by 71.109.237.16 (talk) 20:22, 2 October 2009 (UTC)[reply]

Of course its not adjusted for inflation. Its a weighted average of stock prices. Prices of each stock are in USDollars. Sum the prices, divide by divisor. That's it.DavidRF (talk) 01:15, 3 October 2009 (UTC)[reply]

Well, what stock indice is adjusted for inflation???? They all tend to be price weighted in a way to make them affordable and attractive investments. Even a floated-weighted average like the S&P 500 is not really adjusted for inflation; or the Nasdaq 100 either. The bottom line is, almost all stocks go through a price adjustment after a stock split. That holds true for even different calculated averages like the Russell 2000 or Wilshire 5000; not just the Dow in particular. —Preceding unsigned comment added by 98.113.142.60 (talk) 00:52, 9 October 2009 (UTC)[reply]

Points?

[edit]

What are these "points". Why aren't they mentioned on Point? Are these the same as basis points? —Ben FrantzDale (talk) 02:04, 4 January 2008 (UTC)[reply]

Link explains it: http://www.investopedia.com/ask/answers/04/050704.asp —Preceding unsigned comment added by 209.16.166.131 (talk) 20:57, 29 September 2008 (UTC)[reply]

AT&T?

[edit]

The article says "On April 8, 2004, another change occurred as International Paper, AT&T, and Eastman Kodak were replaced with Pfizer, Verizon, and AIG" but AT&T is still listedas a component. Which one is right?--Dr who1975 (talk) 19:03, 2 February 2008 (UTC)[reply]

Nevermind... figured it out.--Dr who1975 (talk) 19:07, 2 February 2008 (UTC)[reply]

Hello can this article please reflect the changes on Feb 11th 2008

Remove Altria, Honeywell Add Chevron, Bank of America. —Preceding unsigned comment added by 67.180.224.245 (talk) 02:27, 12 February 2008 (UTC)[reply]

Clarification of 'Criticisms'

[edit]

found a link which gives citation to the statement made with the correlation between the market as a whole and the dow jones average. http://189slash11.blogspot.com/2008/03/correlation-of-overall-market.html —Preceding unsigned comment added by Mtanttari (talk • contribs) 01:31, 25 March 2008 (UTC)[reply]

rescaled averaged

[edit]

At the beginning of the article it is said that is a scaled average, and this tow words are linked to Weighted mean. From what I read in the following hoverer, it seems not to be a weighted average, but just a simple average that is them divided for a normalizing factor (it is actually a rescaling not an average).

If it were a real weighted average (on the price) in the 2nd paragraph of the criticism section would not be true. The beginning of this paragraph ("the DJIA is criticized for being a price-weighted average") is trivially not in agreement with what is written just after and with what is written in Calculation section. -- AnyFile (talk) 09:05, 21 July 2008 (UTC)[reply]

Opening Time

[edit]

Moreover it is rather difficult for me to understand the part about the opening time ("Another issue with the Dow is that not all 30 components open at the same time in the morning.") Could someone clerify this point? Is it a normal thing that happens everyday or not? Do the two markets where the stocks are quoted (NYSE and NASDAQ) open at the same time? Or the different opening times happens only if, for some special reason, one single stock is delayed. -- AnyFile (talk) 09:05, 21 July 2008 (UTC)[reply]


I think in previous years, like maybe 10-15 years in the past; whats written in this section was true. But although the Dow opens in a certain way thats not quite reflective of the overall market, how about the ETF which tracks it? The DIAMONDS Symbol:DIA..........It seems like whatever the opening price of that is, reflects the opening of the Dow. Sometimes for instance, the ETF will open down $1 meaning the Dow will open down 100 points. So on that particular day, the Dow might only sporadically open up down 20 and then within 30 or 40 seconds, it'll be down 100. And we knew this would happen due to the ETF reflecting that. Or likewise if the ETF opens higher by 95 Cents, then it means the Dow will open higher by 95 points; even though it might have only opened perhaps 20 points higher on that particular day but then immediately, it would be up 95. So regardless of what happens during the initial first seconds after 9:30 a.m. is this paragraph of the Criticism Section even needed in the first place? It seems like outdated info. (User:Rekurrent) —Preceding undated comment added 15:19, 29 July 2009 (UTC).[reply]

[edit]

All Wikipedia Visitors should be able to decide whether to use any relevant external links; that decision should not be made for them by other Wikipedia Editors. I had entered some external links (details below) but they were removed by other Editors without consultation, even though registration is not required and access is Free to the results of detailed Technical Analysis of all the constituents of Dow Jones Industrial Average Index. If you consider that these external links may be of interest to other Visitors, please add them to the ‘article’ page.

To access the removed external links, click on the ‘history’ tab of ‘article’ page then click to view Revision (236130999) 23:45 3 September 2008 by TechAnalysis. Scroll to ‘External Links’ section and click on one of the removed links.

TechAnalysis (talk) 17:26, 25 September 2008 (UTC)[reply]

Bush Administration's $700 billion bailout bill

[edit]

Should it really be called the Bush Administration's bill? It's not as though it went directly from the White House, unchanged, for a vote. —Preceding unsigned comment added by 130.64.153.107 (talk) 20:09, 29 September 2008 (UTC)[reply]

Trend lines

[edit]

A log-scale graphic is nice to have, but can we use one without the arbitrary "trend lines"? Several of them touch the graph at only one or two points, which any geometer knows is hardly a feat. It's misleading to show five parallel lines, as if to illustrate strong, clear long-term trends, if the trends are projected onto the data rather than drawn from it. Dzhim (talk) 04:44, 7 October 2008 (UTC)[reply]

I removed the image. The trend lines are either uncited or OR. DavidRF (talk) 17:20, 10 October 2008 (UTC)[reply]
Thanks! New log-plot is much improved! Dzhim (talk) 23:34, 10 October 2008 (UTC)[reply]

clarification language needed for "former components" sections

[edit]

as currently presented, the "former components" suggests that any component changes have only occurred commencing in 1999 (and yes i see, but suspect others on a quick read may not, the "Main article: Historical components of the Dow Jones Industrial Average" reference).

two solutions.

1. emend 2nd paragraph's first sentence to lead with "in the most recent changes, in 1999..."

2. remove all recent changes and just present the 1st paragraph (and the "Main article: Historical components of the Dow Jones Industrial Average" reference).

my preference is for option 2. it's clearer and eliminates any misleading assumption (i.e., that the only changes are 1999 and later). it's easier article maintenance (i.e., 2 articles (this one and the sub article on changes) don't have to be updated when a component is changed).--68.173.2.68 (talk) 22:12, 9 October 2008 (UTC)[reply]

Request for Historical Chart in Real-Dollar Values

[edit]

Can we get a chart showing the value of the DJIA throughout its history -- adjusted to real-dollar values? (Or something like that -- scaled in relation to the concurrent adjusted value of the dollar.)

Would that be meaningful as the number of stocks/companies included has changed?

(And in fact is the DJIA meaningful as the number of stocks/companies and the percentage of the market they represent has changed?) —Preceding unsigned comment added by 75.36.156.71 (talk) 04:33, 12 October 2008 (UTC)[reply]

A quick check here:
http://en.wikipedia.org/wiki/Us_dollar#Time-relative_value
Seems to show -- very very roughly -- the real value of the DJIA in 1896 dollars has risen from 40 in 1896 to something vaguely like 300 today (for the DJIA at 10,000 with an 1896 dollar at $1 = a 2000 dollar at 3¢)

Citation no longer supports 24% drop in 1914

[edit]

"When the markets reopened on December 12, 1914, the index closed at 54, a drop of 24.39%[4]". [4] references http://www.djindexes.com/mdsidx/index.cfm?event=showavgstats#no4 which doesn't list this drop. http://en.wikipedia.org/wiki/List_of_largest_daily_changes_in_the_Dow_Jones_Industrial_Average explains this seemling large drop was actually caused by a discontinuity in the DJIA. See http://blogs.wsj.com/numbersguy/the-day-stocks-rose-but-the-dow-plunged-423/ as well (it says the news on that day said stocks went up).

Since 75 years ago

[edit]

I added this sub-section -Manic Monday - since this is sub-milestone by itself, record one day for 112 years and since 75 years per LA Times and NYT.---Florentino floro (talk) 08:27, 14 October 2008 (UTC)[reply]

linear graph

[edit]

Please put the linear graph of the DJIA back up. It is less misleading —Preceding unsigned comment added by 68.127.168.32 (talk) 13:23, 24 October 2008 (UTC)[reply]

How is the log graph misleading? The log graph can show things that happened before 1980 while the linear graph cannot. I would say *that* is misleading.DavidRF (talk) 14:38, 24 October 2008 (UTC)[reply]


What about the "Black Monday" graph? The base is 1700, which exaggerates the relative size of the drop. 206.53.196.105 (talk) 20:34, 29 October 2008 (UTC)[reply]

origin of name

[edit]

Where did the "Jones" part of the original name come from? Was this just a generic sort of name added on to Dow so it would sound like a person's name? Thanks... —Preceding unsigned comment added by 216.177.184.163 (talk) 21:05, 5 November 2008 (UTC)[reply]

Dow worked for Dow Jones & Company which was founded by Dow and Edward Jones (statistician). Jones himself didn't have anything to do with the index, but his name was on the company and it stuck. DavidRF (talk) 21:18, 5 November 2008 (UTC)[reply]

Need a section on "How stocks are added or removed from the index"

[edit]

There should be a section on how stocks are added or removed from the index. I belive it is by an editorial board, not sure of composition. Not sure if there are any crireria other than the boards judgement with some loose guidelines that the stocks be "large cap" and broad. It normally takes some time and announcemnts are made, but, AIG sure disappeared fast. When will it be time to pull the trigger on GM? —Preceding unsigned comment added by 68.116.220.85 (talk) 16:50, 10 November 2008 (UTC)[reply]

Update of Logorithmic graph

[edit]

Why is it stuck at March 2008? Isn't January 2009 more relevant? —Preceding unsigned comment added by 115.130.39.96 (talk) 11:26, 24 January 2009 (UTC)[reply]

I updated the image. These images are tedious to update, so it can't be done every day. (Plus its 110+ years long, so an update for several months is very subtle (even if it did drop 30% in that time). I think the end of the year was a good time for an update, though. (Jan-9-09 is the exact cutoff for the data). DavidRF (talk) 22:50, 24 January 2009 (UTC)[reply]
There's been a number of complaints that the recent changes in the index are hard to pick out when the x-axis spans over 110 years. I added a plot that shows just the 2000s. 19:52, 8 February 2009 (UTC)

Investing section

[edit]

This section reads like an advertisement to me. Aren't there a lot of index funds? Why are we singling out one or two. Is it a section that should be removed? Or should we expand it to be more comprehensive? What do others think? DavidRF (talk) 19:18, 1 February 2009 (UTC)[reply]

It reads like an advertisement to me too - I say take it out. 62.190.15.146 (talk) 12:32, 26 May 2009 (UTC)[reply]

I'm deleting it. It has little to nothing to do with the DJIA. Why do I care if there's an inverse fund offered by someone? —Preceding unsigned comment added by 98.229.123.49 (talk) 17:13, 30 May 2009 (UTC)[reply]

While there are a lot of index funds, there are very few that index to this particular index, the DJIA. All of our index articles that are larger than stubs have an investing section, so we need to address this more comprehensively in order to get consensus rather than making the change one-off in this article. UnitedStatesian (talk) 14:26, 31 May 2009 (UTC)[reply]
Thanks for the explanation. It makes sense to keep it if there are similar sections in the articles for the other indices. When I first read the section, I thought there was too much focus on the specific name of the firms that were managing the index funds, but I suppose that is a subtle complaint because the indexes themselves (DJIA, S&P) are often named after private firms.DavidRF (talk) 19:22, 31 May 2009 (UTC)[reply]

Assessment comment

[edit]

The comment(s) below were originally left at Talk:Dow Jones Industrial Average/Comments, and are posted here for posterity. Following several discussions in past years, these subpages are now deprecated. The comments may be irrelevant or outdated; if so, please feel free to remove this section.

"The average is computed from the stock prices of 30 of the largest and most widely held public companies in the United States"

This statement is incorrect. While the thirty stocks that comprise the DJIA tend to be among the largest and most widely-held, the Dow Jones company wants the average to be representative of U.S. industry, and thus will include smaller companies that are representative of their industry, rather than allow the index to be too heavily-weighted in one industry or another, depending on current stock prices.

An index made up of the largest companies (whether ranked by sales or by market capitalization) would change with more frequency than the DJIA changes, and wouldn't be as useful to investors or those tracking the U.S. economy.

Last edited at 15:59, 21 March 2009 (UTC). Substituted at 20:30, 2 May 2016 (UTC)

  1. ^ http://www.djindexes.com/mdsidx/index.cfm?event=components&symbol=DJI
Retrieved from "https://en.wikipedia.org/w/index.php?title=Talk:Dow_Jones_Industrial_Average/Archive_1&oldid=718317360"