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Old 06-01-2009, 09:02 PM
Location: Portland, Oregon
7,091 posts, read 10,543,162 times
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I personally think it's a good indicator of where things are going, but very general and a good 3-4 month lead time. Unexpected things make the average go nuts, even if fundamentals are good, I've never had a problem honestly. If you have a stock and as the general market goes up it's not, you should see what else is not making the general press releases...I've always found things that I didn't know by oddballs that don't move even marginally with their index. I've heard things about how people did good with the farm reports, but I don't know how good that is anymore really.
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Old 06-03-2009, 09:12 AM
Location: The Pacific NW.
879 posts, read 1,745,504 times
Reputation: 489
The Dow isn't even the best gage of the STOCK MARKET. It's the most quoted because of prestige and tradition, but it's only 30 stocks and it's share price-weighted, which is silly. Average Joe watches the Dow, but the pros track the S&P 500. (They watch the Dow too, but only because so many average Joes do.) An even better gage of the market is the Wilshire 5000, but you never hear that one quoted.
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Old 06-04-2009, 08:32 AM
Location: Virginia Beach, VA
5,517 posts, read 8,814,119 times
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Originally Posted by texdav View Post
The dow tells you how the eomy is do but not indivdual. Those are alwsy separate issues with some losing and others gaining as always.People get rich in the markets and others lose their shirts.

The Dow doesnt tell you crap. It doesnt tell you any more then what a roulette spin would.

Remember, stock prices are completely and totally detached from any underlying sanity. Stocks will fall 50% because someone sneezed wrong at a company.....does that mean the company is going bankrupt and its time to panic?

No it doesnt.
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Old 06-04-2009, 09:02 AM
Location: Marietta, GA
7,844 posts, read 14,585,018 times
Reputation: 3484
Originally Posted by Chango View Post
So if the DOW freely takes off non-performing companies and replaces them with companies that are making money, what good is it as a economic indicator? Doesn't that make the DOW really just a bunch of smoke and mirrors? What should I be looking at?

GM, Citigroup Replaced in Dow by Cisco, Travelers (Update1) - Bloomberg.com
It's not the fact that they are non-performing, but rather that those companies are no longer a barometer, since they are essentially subsidiaries of the US Government. Do you think GM should remain part of the DJIA? It's essentially a privately held company, with Barry O as the Chairman of the Board.

Companies have been added and removed from the Dow for many, many years. This is not something new.
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