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Personal Finance and Investing

Bernardo de La Paz

(59,783 posts)

3. The Dow is bogus, ancient tech. Use SP500. Wall Street uses SP500. The media use Dow bc their viewers don't know better

Reply to bucolic_frolic (Original post)

Mon Oct 20, 2025, 12:21 PM

Monday

DU knows better.

Dow is only 30 stocks and they are price-weighted since 1894 for the convenience of adding machine operators. This is now 2025 and we have computers for such stuff.

Verizon is 40.58, Goldman Sachs is 759.54. If Goldman Sachs moves 1.00 % (7.60), then Verizon has to move 7.60 to have the same effect. That would be 18.72 %, a much bigger percentage.

So the high priced stocks have much more effect on the Dow than the low priced stocks, as much as over 18 times the effect. Ditch the Dow.

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IbogaProject progree

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Highlight:

As the US dollar tumbles, gold, commodities, crypto, stocks soar [View all] bucolic_frolic Monday OP

My 39th post, detailing Krasnov's economic plan gab13by13 Monday #1

Think I'll head out to the garden center and buy all the tulip bulbs. Ocelot II Monday #2

I read a novel about tulip mania years ago. Crazy! IcyPeas Monday #5

The Dow is bogus, ancient tech. Use SP500. Wall Street uses SP500. The media use Dow bc their viewers don't know better Bernardo de La Paz Monday #3

I think of using 30 price-weighted blue-chip stocks as a gauge of the stock market as intellectually equivalent progree Monday #4