10 replies to this topic

[NAV]

S&P (market cap weighted) is up only .1% while DOW (price weighted) is up .63%, although both have IBM in the index. Makes all the difference in the world. This is why DOW is a flawed index. 

Edited by NAV, 18 October 2017 - 11:26 AM.

[da_cheif]

S&P (market cap weighted) is up only .1% while DOW (price weighted) is up .63%, although both have IBM in the index. Makes all the difference in the world. This is why DOW is a flawed index. 

not flawed.....in and old sec rule the exchange via the specialists can stabilize the market  (in this case taking 12 of the 30 down today) if one of the dow components this time IBM  up big on news....saw this happen a number of times most notably....when GF...general foods then a dow component was bot out causing a bifercated market....got everyone bearish because the broader market wasnt flying with the dow.....after GF was gone the market kept goin up eh......in the 90s

[da_cheif]

S&P (market cap weighted) is up only .1% while DOW (price weighted) is up .63%, although both have IBM in the index. Makes all the difference in the world. This is why DOW is a flawed index. 

1949 Annual Report - SEC.gov

https://www.sec.gov/...report/1949.pdf

RICHARD B. MCENTIRE .... and stabilization_______________________________. 42 ...... Securities Act of 1933 where any: stabilizing operation is undertaken ...... ney general at his request, together with copies of those parts of the.

[viccarter]

$RTY is the perfect index.  LOL at $SPX traders.  2K small caps, not a lot of dividend payers.  No garbage polluting up the breadth like with NYSE breadth.  Still 2K issues gives you good breadth as opposed to 500 SPX .  Too few issues. When you're right long, its up more.  When your right short its usually down more.  Yet, despite all this still 92+% correlated directionally with SPX and DOW.

Edited by viccarter, 18 October 2017 - 02:02 PM.

[viccarter]

Only thing $RTY lacks is limited data for breadth indices, and the overall index only back to 1992, most breadth indices only from 2007 or so.

[Data]

It takes less money to move a major index is what the original poster is saying.   There is some skew on any single day.   Small and mid caps are doing better than SPX.  As long as large cap momentum MTUM stays above the 50-day, the market goes higher.  It is the old CANSLIM maxim.

 

It is a very strange debt market as well.   The government is selling very little long-term debt after the debt ceiling agreement, mainly T-bills.  There have been some warnings that 500 billion dollars in debt has to be issued by Dec 8.

Edited by Data, 18 October 2017 - 03:35 PM.

[Geomean]

S&P (market cap weighted) is up only .1% while DOW (price weighted) is up .63%, although both have IBM in the index. Makes all the difference in the world. This is why DOW is a flawed index. 

It's significant also that almost every US stock index uses arithmetic averaging.  The Value Line Geometric Average ($VALUG ) as it's name implies, uses geometric averaging and hence portrays absolute return.  It's high in 1998 was 508.39.  It closed today at 543.26 near the 1.128 extension of its 2015 high at 523.65.  It's bottom in 2009 was 152.74. 

 

Using today's close it has returned 6.9% since 1998 for a whopping 0.36% per year.  Dow 23000 anyone?  SPX 2600?  Russell 1600?  It's all total BS. 

 

So when anyone understanding the difference between geometric and arithmetic averaging hears folks saying such things as a new record or "to the sky", perhaps pity the innumeracy of the speaker.  The financial press and industry henchmen (after all it is the Dow Jones and Standard and Poors doings) have led them wrong.  And for folks like Ibbotsen Associates to give out "long term performance of stocks" info to all the poor individual investors, institutions, and their advisors based on these arithmetic averages is just mind bogglingly stupid.

[da_cheif]

 

S&P (market cap weighted) is up only .1% while DOW (price weighted) is up .63%, although both have IBM in the index. Makes all the difference in the world. This is why DOW is a flawed index. 

It's significant also that almost every US stock index uses arithmetic averaging.  The Value Line Geometric Average ($VALUG ) as it's name implies, uses geometric averaging and hence portrays absolute return.  It's high in 1998 was 508.39.  It closed today at 543.26 near the 1.128 extension of its 2015 high at 523.65.  It's bottom in 2009 was 152.74. 

 

Using today's close it has returned 6.9% since 1998 for a whopping 0.36% per year.  Dow 23000 anyone?  SPX 2600?  Russell 1600?  It's all total BS. 

 

So when anyone understanding the difference between geometric and arithmetic averaging hears folks saying such things as a new record or "to the sky", perhaps pity the innumeracy of the speaker.  The financial press and industry henchmen (after all it is the Dow Jones and Standard and Poors doings) have led them wrong.  And for folks like Ibbotsen Associates to give out "long term performance of stocks" info to all the poor individual investors, institutions, and their advisors based on these arithmetic averages is just mind bogglingly stupid.

 

of course 9 years ago the thought of coming this far was also the furthest from your mind eh?   what are you gonna say at 30k i wonder

[da_cheif]

 

S&P (market cap weighted) is up only .1% while DOW (price weighted) is up .63%, although both have IBM in the index. Makes all the difference in the world. This is why DOW is a flawed index. 

It's significant also that almost every US stock index uses arithmetic averaging.  The Value Line Geometric Average ($VALUG ) as it's name implies, uses geometric averaging and hence portrays absolute return.  It's high in 1998 was 508.39.  It closed today at 543.26 near the 1.128 extension of its 2015 high at 523.65.  It's bottom in 2009 was 152.74. 

 

Using today's close it has returned 6.9% since 1998 for a whopping 0.36% per year.  Dow 23000 anyone?  SPX 2600?  Russell 1600?  It's all total BS. 

 

So when anyone understanding the difference between geometric and arithmetic averaging hears folks saying such things as a new record or "to the sky", perhaps pity the innumeracy of the speaker.  The financial press and industry henchmen (after all it is the Dow Jones and Standard and Poors doings) have led them wrong.  And for folks like Ibbotsen Associates to give out "long term performance of stocks" info to all the poor individual investors, institutions, and their advisors based on these arithmetic averages is just mind bogglingly stupid.

 

>Using today's close it has returned 6.9% since 1998< unless of course you timed the big moves eh?

[gm_general]

S&P (market cap weighted) is up only .1% while DOW (price weighted) is up .63%, although both have IBM in the index. Makes all the difference in the world. This is why DOW is a flawed index. 

 

I recall when MMM was a $130+ stock on the Dow and not much else in that index was close in price to that. MMM traded a few million shares a day, which for a major lever for the Dow was probably low volume. All manipulators had to do was to attack MMM and they could motivate the whole index to move in kind like a flock of sheep. Really silly.