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NIXT is an ETF for S&P 500 rejects. I do not think there is an ETF for DJIA rejects. I bought a few of DJIA rejects and they did very well after getting kicked out.
The bizarre weighting scheme of the DJ 30, giving greater weight to stocks by price not market cap, means INVD will be pretty far down the list. This despite the fact that Nividia and Apple are neck-and-neck in the race for biggest company. Stone Age is what comes to my mind.
NVDA will be placed initially between CVX and MMM in DJIA, in the bottom 3rd of DJIA. Remember that NVDA recently split its stock. Who knows, it may double or triple again to dominate DJIA (-:).
So, NVDA got a 2.1% weighting in DJIA ( it has a 7.1% weight in SPX). While SHW has a 0.2% weight in SPX and 7.1% weight in DJIA. The magic of price weighting in DJIA
There is no good reason for an index to use price-weighting in this day and age. I wish commentators would stop referring to the anachronistic DJIA when reporting market activity.
Price-weighted DJIA (5/26/1896- ) has a long continuous history. It has been promoted heavily by Dow Jones, WSJ, Barron's, and for years the general media reported only DJIA (those old enough may remember Cronkite years at CBS). DJIA now formally belongs to SP Global/SPGI (3/4/2012- ) through S&P Dow Jones Indices (a joint venture by SPGI, CME, NWS).
Some of us are older than the market-cap weighted SP500 that started on 3/4/1957 (some variants existed 1923- ); any older data are just produced by backward simulation.
DJIA and SP500 have an average correlation of 95%.
And then there are copycats like Japan's price-weighted Nikkei 225 (9/7/1950- ). If the US is doing it, it must be good kind of thinking.
How many watch or know about TOPIX? TOPIX (7/1/1969- ) is market-cap weighted total market index; there are also TOPIX 30 (interesting number), TOPIX 70, TOPIX 100, TOPIX 500 (another interesting number), TOPIX 1000, and just TOPIX.
With the ETFs, customized indexes can be created at will, so there are now more ETFs (and indexes) than stocks.
But we can safely assume that DJIA would be around in our lifetimes.
Thanks for the info, Yogi. Although DJIA and SPX are highly correlated, it irks me that DJIA is not very representative of the market and its weighting system doesn't make any sense from a market perspective.
That came as a surprise to me. I had bought INTC on Friday during the After hours.
I think INTC should have planned for divesting the foundry business (money incinerator) and keeping Pat. But the US Govt conditions they agreed restricted divesting foundry but still doable.
Comments
The index reconstruction effect: An event study on the OMX Stockholm Benchmark Index
NIXT is an ETF for S&P 500 rejects. I do not think there is an ETF for DJIA rejects. I bought a few of DJIA rejects and they did very well after getting kicked out.
I wish commentators would stop referring to the anachronistic DJIA when reporting market activity.
Some of us are older than the market-cap weighted SP500 that started on 3/4/1957 (some variants existed 1923- ); any older data are just produced by backward simulation.
DJIA and SP500 have an average correlation of 95%.
And then there are copycats like Japan's price-weighted Nikkei 225 (9/7/1950- ). If the US is doing it, it must be good kind of thinking.
How many watch or know about TOPIX? TOPIX (7/1/1969- ) is market-cap weighted total market index; there are also TOPIX 30 (interesting number), TOPIX 70, TOPIX 100, TOPIX 500 (another interesting number), TOPIX 1000, and just TOPIX.
With the ETFs, customized indexes can be created at will, so there are now more ETFs (and indexes) than stocks.
But we can safely assume that DJIA would be around in our lifetimes.
Although DJIA and SPX are highly correlated, it irks me that DJIA is not very representative
of the market and its weighting system doesn't make any sense from a market perspective.
Spirit of Gordon Moore long spent?
I remember when BAC was thrown off DJI. Did not hurt it.
As for INTC, investors patient enough to wait another 2-3 years for the foundries to take shape? Dig out of $50B debt?
Gelsinger was certainly given rein in 2021, but Intel turned out to be more horse than he could handle, looks like, at this point in his life.
Whoever becomes new CEO will need to be formidable both technically, managerially, even politically. Suspect not a lot of those people exist.
@stayCalm. Not worried INTC is a value trap?
I certainly hope not. Think losing it is akin to losing Boeing. Hopeful they both figure out how to get back to health and leadership.
I think INTC should have planned for divesting the foundry business (money incinerator) and keeping Pat. But the US Govt conditions they agreed restricted divesting foundry but still doable.