Thursday, October 29, 2009

AAPL In The DJIA: It's Inevitable

Apple's rising market cap and impressive continuing growth in revenue and earnings places the company in the thin air space among global enterprises. No matter the past few days of a falling share price (a pull back from the accelerated gains following the quarterly earnings report), the company is among the most highly valued companies when ranked by market cap and outranks all but a few of the current DJIA components.

It's not an issue of "if" Apple will be added as a component to the most closely watched stock market performance gauge in the world. It's a matter of "when" Apple will be added to the index of 30 select stocks. The only question is which current component it will replace.


  1. As you know, DT, I disagree.

    AAPL will not be added to the Dow Jones Industrial Average anytime soon for the reason that it would further expose and highlight the flaw in the DJI design. The Dow is price-weighted, and as such AAPL would for example influence its level 10 times more than Intel.

    Unless Apple's board votes a split, News Corp will have to find another replacement for GE.


  2. I believe each stock in the index is individually weighted so the weight given to AAPL would be adjusted based on the share price at entry into the index. In other words, the share price shouldn't de a determiner of which stocks are included in the index.