As most already know, the Dow Jones Industrial Average made new highs in yesterday's trading. This is while the S&P 500 and NASDAQ continue to lag. What most do not readily realize is that out of the 30 price-weighted stocks that there has been a 20% turnover in the index since the 2007 highs. Further still, these trades appear to greatly add to the overall performance of the index.
- In February 2008, Chevron and Bank America replaced Altria and Honeywell. Since the replacement, the former stocks have gained by an average of 1.6% versus a nearly 19% loss on those replaced.
- Kraft Foods replaced AIG in September 2008. Through September 2012, when Kraft was replace, AIG lost more than 96% in value versus a 48% gain in Kraft's stock.
- In June 2009, both Travelers and Cisco replaced both GM and Citigroup. The replacements gained an average of 23% since that time versus an 87% average loss on both GM and Citigroup, noting GM was a complete wipeout.
- Finally, Kraft was replaced by United Health in September 2012 and the former has added 16% since its inclusion into the Dow.
And yes and if you are asking, the replacements are what they are and the high on the Dow is what it is. Any of us could only hope to make nearly as savvy trades in our own portfolios. That said, I think the above is good to know because the comparative highs achieved in 2007 and yesterday are no where near apples-to-apples.
- In February 2008, Chevron and Bank America replaced Altria and Honeywell. Since the replacement, the former stocks have gained by an average of 1.6% versus a nearly 19% loss on those replaced.
- Kraft Foods replaced AIG in September 2008. Through September 2012, when Kraft was replace, AIG lost more than 96% in value versus a 48% gain in Kraft's stock.
- In June 2009, both Travelers and Cisco replaced both GM and Citigroup. The replacements gained an average of 23% since that time versus an 87% average loss on both GM and Citigroup, noting GM was a complete wipeout.
- Finally, Kraft was replaced by United Health in September 2012 and the former has added 16% since its inclusion into the Dow.
And yes and if you are asking, the replacements are what they are and the high on the Dow is what it is. Any of us could only hope to make nearly as savvy trades in our own portfolios. That said, I think the above is good to know because the comparative highs achieved in 2007 and yesterday are no where near apples-to-apples.
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