back to article What a hang-up: AT&T dumped from Dow index, Apple installed

Apple will boot giant telco AT&T off the oldest and most famous stock market index later this month, the people running the Dow Jones Industrial Average announced this morning. The change will come into effect on the morning of Thursday March 19 and is timed to coincide with a stock split by Visa, one of the other 29 companies …

  1. Vector

    Visa?

    ...as a Tech company?

    I know they use a lot of technology, but so do most other companies in the finance industry. Or any industry for that matter.

    1. swschrad

      yeah, their cards get hacked all the time

      that makes it tech. stop the hacks, become a financial stock.

  2. Smilin' Stan
    FAIL

    "In any 30-year period, the DOW always shows a gain."

    Of course it does, because every stock in the DOW on a losing trend is dumped, and replaced with a stock that is moving upward. In 1985 the DOW included such future greats as Sears, US Steel, Eastman Kodak, and Woolworth's, but for some reason are not in the mix for 2015...

    1. Fazal Majid

      Survivorship bias

      Yes, that's why index funds use broader indexes like the S&P 500 or the Russell 2000.

      1. GBE

        Re: Survivorship bias

        I don't really understand why "the Dow" is such a mainstay of financial news. It's a small sample of very large companies and is being constantly "cooked". Nobody who knows anything should be paying any attention to it at all...

    2. Tom 13

      Re: "In any 30-year period, the DOW always shows a gain."

      So, if you do the smart thing and dump any company the DOW has dumped and replace it with shares in the company that takes it's place, over any 30 year period, your investments will also show a gain.

  3. Eddy Ito Silver badge

    The DJIA is a price weighted index, they couldn't very well add AAPL when it was several times higher than any other ticker on the list because it would just be a reflection of AAPL stock with a slight waver accounting for all the others which would make it largely worthless. As it is it's getting silly, consider that Cisco could double or completely disappear and the Dow would change less than if Visa moved 10% yet as a company Visa has a market cap ($169.3B) only about 13% larger than Cisco ($147.6B).

  4. Bruce Hoult

    the Dow is dumb

    Eddy, yes and that is exactly why the Dow should be ignored. Price weighting makes no sense whatsoever. Market cap weighting is the only meaningful way to make an index. Ridiculous that a stock having a split should change their contribution to the index, or move the index at all.

  5. Fibbles
    WTF?

    World's only time traveling stock index.

    Apple will boot giant telco AT&T off the oldest and most famous stock market index later this month, the people running the Dow Jones Industrial Average announced this morning.

    The Dow Jones Industrial Average, known simply as "the Dow," is one of the key indicators of stock market health and was first calculated in 1896 by the company's co-founder Charles Dow, making it the second oldest stock index in the US.

    Simultaneously first and second oldest...

  6. ecofeco Silver badge

    at&t hasn't been innovative in decades

    at&t hasn't been innovative in decades. When they sold Bell Labs, they clearly signaled that they were now a service provider and no longer in the innovation game.

    Serves them right.

  7. Michael Wojcik Silver badge

    It's been said already, but...

    The Dow Jones Industrial Average, known simply as "the Dow," is one of the key indicators of stock market health

    The Dow indicates nothing but the value of the Dow. It's the most popular stock-market myth in the US, but anyone who knows anything about the subject treats it as what it is - a gimmick used to stir the passions of uninformed individual investors.

    This change is all about boosting the Dow's image and getting it a bit of press.

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