Apple stock to replace AT&T in Dow Jones Industrial Average

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  • Reply 41 of 112
    melgrossmelgross Posts: 33,579member
    N
    I agree. Individual stocks versus funds. My portfolio is very heavily weighted with AAPL, but that is simply the effect of thousands of percentage points of growth versus my other holdings.

    That's right. Most of y stock was purchased at $16.93 mid 2004. When you take the 14:1 split since that time, and the current stock price, it's possibly one of the best investments ever made. I bought some during the recession at $80 as well.

    If I had any idea that this wasn't the risk I thought it might be, I would have committed much more of my portfolio to it. Sheesh! People don't always believe the worth of my investment, because it's so large these days, but I bought 5,000 shares back then. That was a whole $100 thousand. A nothing investment. If I include my home and all the other things we own, including my wife's, that came out to less than 5% of our worth. I'm not trying to brag, but with being a partner in two successful companies that we sold over the years, and good investing, we've done pretty well. If I was braver than I was, I would have invested three times as much as I was thinking of doing, but I pulled back.
  • Reply 42 of 112
    melgrossmelgross Posts: 33,579member
    Yesterday I heard the very alarming news that the average American has less than $100K saved for retirement. Many people have nothing saved. This is very disturbing and could lead to account confiscation and redistribution at some point, since the ill-prepared will be the majority of voters.

    In the '80's the laws were changed as to corporate pensions. They were changed again during the '90's, and the last bad major chNge was during the 2,000's. These changes devastated the landscape for pensions. A lot of the older pensions are defined benefit. My wife has that. She can count in a check for the rest of her life, and I get half if she goes before me. This is the best pension. As she says, thanks for unions, who fought for that. The next is defined compensation, which isn't as good. But there are 4@1's. These were really just intended for these earning high salaries and receiving large stock compensation. It was to control the overflow for these people. But it moved down the ranks. It's not good for lower earners.

    But most people receive no pension unless they work for government. That's really bad, as they also rarely have health insurance either, which brings the cost of health care way up. It's been calculTed that it costs the country far more to not have health care for everyone than with. People use emergency wards instead, which is very bad.

    Hopefully this will be resolved shortly.
  • Reply 43 of 112
    SpamSandwichSpamSandwich Posts: 33,407member
    melgross wrote: »
    In the '80's the laws were changed as to corporate pensions. They were changed again during the '90's, and the last bad major chNge was during the 2,000's. These changes devastated the landscape for pensions. A lot of the older pensions are defined benefit. My wife has that. She can count in a check for the rest of her life, and I get half if she goes before me. This is the best pension. As she says, thanks for unions, who fought for that. The next is defined compensation, which isn't as good. But there are 4@1's. These were really just intended for these earning high salaries and receiving large stock compensation. It was to control the overflow for these people. But it moved down the ranks. It's not good for lower earners.

    But most people receive no pension unless they work for government. That's really bad, as they also rarely have health insurance either, which brings the cost of health care way up. It's been calculTed that it costs the country far more to not have health care for everyone than with. People use emergency wards instead, which is very bad.

    Hopefully this will be resolved shortly.

    I'm fairly certain that the Federally established ACA marketplaces in the states will be found unconstitutional with the law as written and politicians seem to be preparing people for this outcome. Those run by the states will remain (for better or worse). Although I am completely against state and Federal involvement in healthcare markets, at the state level it isn't strictly prohibited.
  • Reply 44 of 112
    mstonemstone Posts: 11,510member
    Quote:
    Originally Posted by digitalclips View Post



    Can some of the experts here explain the ramifications for in general AAPL if this is true please.



    I'm not an expert but historically, stocks that have made a rapid rise such as AAPL has done, once added to the Dow it has put an end to their rapid increase.

  • Reply 45 of 112
    solipsismysolipsismy Posts: 5,099member
    .
  • Reply 46 of 112
    SpamSandwichSpamSandwich Posts: 33,407member
    mstone wrote: »

    I'm not an expert but historically, stocks that have made a rapid rise such as AAPL has done, once added to the Dow it has put an end to their rapid increase.

    Name those examples. There aren't any in the indexes comparable to Apple.
  • Reply 47 of 112
    solipsismysolipsismy Posts: 5,099member
    mstone wrote: »

    I'm not an expert but historically, stocks that have made a rapid rise such as AAPL has done, once added to the Dow it has put an end to their rapid increase.

    Considering Apple seems to do the opposite of what I think it should do, maybe that will carry over to the DOW and we'll see it get a P/E more commonly associated with Amazon. :p

    I wonder what their stock price would be if that happened.
  • Reply 48 of 112
    solipsismysolipsismy Posts: 5,099member
    aaarrrgggh wrote: »
    (Taking my advice to extreme will also get you hurt, but losing 10% to commissions isn't helping yourself.)

    If he's day trading I doubt he's paying those old school commissions by calling up a broker to make trades for him. It's not like he's not technically inclined. $15 for making a trades of $70k at a time isn't even a blip on the radar. And if he has that much money to invest there are plenty of online brokerage firms that will offer him free trades for getting his business. Mine has never cost me a dime for trades, only a standard (and outrageous) $25 fee for a wire transfer.
  • Reply 49 of 112
    mstonemstone Posts: 11,510member
    Quote:
    Originally Posted by SpamSandwich View Post

     
    Quote:
    Originally Posted by mstone View Post





    I'm not an expert but historically, stocks that have made a rapid rise such as AAPL has done, once added to the Dow it has put an end to their rapid increase.




    Name those examples. There aren't any in the indexes comparable to Apple.

    Look at the Index, all are struggling to be relevant ... CSCO, IBM, MSFT....next step from Dow is total irrelevance and the possible death of the company... Apple is not a fit for DOW...entering Dow is only for the losing companies and not for highly innovative companies like Apple.

     

    This is actually good news for AT&T.

  • Reply 50 of 112
    solipsismysolipsismy Posts: 5,099member
    mstone wrote: »
    Look at the Index, all are struggling to be relevant ... CSCO, IBM, MSFT....next step from Dow is total irrelevance and the possible death of the company... Apple is not a fit for DOW...entering Dow is only for the losing companies and not for highly innovative companies like Apple.

    This is actually good news for AT&T.

    Intersting. I hope you're wrong.
  • Reply 51 of 112
    SpamSandwichSpamSandwich Posts: 33,407member
    mstone wrote: »
    Look at the Index, all are struggling to be relevant ... CSCO, IBM, MSFT....next step from Dow is total irrelevance and the possible death of the company... Apple is not a fit for DOW...entering Dow is only for the losing companies and not for highly innovative companies like Apple.

    This is actually good news for AT&T.

    Apple being listed in one index does not prevent them from being listed in another.
  • Reply 52 of 112
    mstonemstone Posts: 11,510member
    Quote:

    Originally Posted by SolipsismY View Post



    Intersting. I hope you're wrong.

    Tim Cook can decline being listed in the Dow.

  • Reply 53 of 112
    kibitzerkibitzer Posts: 1,114member
    Stock indexes have some limited usefulness as leading macroeconomic indicators, ignoring day-to-day and event-based fluctuations. Historically, fundamental shifts in price direction have by some months (some say nine months) shown a correlation to precede the onset of a recession or recovery. Even so, indexes must be weighed with other measures - I.e. sales, earnings, EPS, productivity, capacity utilization, etc. - in formulating longer-term investment plans. It's a mistake to discount indexes entirely, however. Ignore the numbers and note the trends.
  • Reply 54 of 112
    totaltotal Posts: 83member
    Quote:

    Originally Posted by sog35 View Post

     

     

    My 700 Apple shares are not my retirement fund.

     

    I started with investing $20k in Apple late 2012.  The stock kept going down so I bought more and more and more.  When it hit $380 I had $70k invested in Apple.  The investment grew to $120k this year.  

     

    What else would I do with my money?  I could throw it into a bank and get .0005% interest or CD for .5%.

     

    When Apple hit $550, $500, $450, $400 I calculated it was the best investment on the planet.

     

    Right now its still a good investment but I have been trimming some of my holdings because we are getting close to fair value of $150.

     

    Once this hits $140 I'll probably sell some LEAP calls on half of my shares for a 10% return.




    do not forget there is that Apple Event on Monday, which will bring another volatility to AAPL. So on Monday it can be easily over 130 again or under 125.

  • Reply 55 of 112
    solipsismysolipsismy Posts: 5,099member
    N
    total wrote: »

    do not forget there is that Apple Event on Monday, which will bring another volatility to AAPL. So on Monday it can be easily over 130 again or under 125.

    And there will be an influx of trolls signing up for AI just to rag on Apple.
  • Reply 56 of 112
    Quote:

    Originally Posted by SpamSandwich View Post





    Name those examples. There aren't any in the indexes comparable to Apple.



    Here ya go Mr. Sandwich:

    Historical data show share prices only briefly rally on the announcement that a company is being added to the exclusive, 30-member index. In fact, there is a “clear pattern” of good performance leading up to an addition, then “bad performance following,” said Jason Goepfert, president of Sundial Capital Research, who analyzed stock-price trends of the last 20 DJIA additions during the 20 days before their addition and 20 days after. Of course, some of the declines may be due to mean reversion.

    MW-DB464_djiaup_20141212174402_NS.png

    More here

  • Reply 57 of 112
    SpamSandwichSpamSandwich Posts: 33,407member

    It should be noted that the actual switch of T with AAPL will take place on March 19th.

     

    http://fortune.com/2015/03/06/fever-chart-what-apple-replacing-att-does-to-the-dow/

  • Reply 58 of 112
    SpamSandwichSpamSandwich Posts: 33,407member
    Quote:
    Originally Posted by MontroseMacs View Post

     



    Here ya go Mr. Sandwich:

    Historical data show share prices only briefly rally on the announcement that a company is being added to the exclusive, 30-member index. In fact, there is a “clear pattern” of good performance leading up to an addition, then “bad performance following,” said Jason Goepfert, president of Sundial Capital Research, who analyzed stock-price trends of the last 20 DJIA additions during the 20 days before their addition and 20 days after. Of course, some of the declines may be due to mean reversion.

    MW-DB464_djiaup_20141212174402_NS.png

    More here




    My point was that Apple is still growing at approximately 18-20% per year, which hasn't been the case with stocks added to the Dow.

     

    MarketWatch trolls Apple regularly for the hits also. I ignore the advice of their "pundits" and analysts. Just take a look at the author's recent articles:  http://www.marketwatch.com/journalists/jennifer_booton

  • Reply 59 of 112
    fallenjtfallenjt Posts: 4,056member
    Quote:

    Originally Posted by sog35 View Post

     

     

    All things equal this should help the stock.

     

    Some old-school investors only buy Dow-Jones stocks or are heavy Dow-Jones. 

    Also there are a handful of Dow-Jones mutual funds that will be forced to buy AAPL shares now.

     

    My 2015 target remains - $150


    but but but you sold them at $130 last week, no?

  • Reply 60 of 112
    SpamSandwichSpamSandwich Posts: 33,407member
    Quote:

    Originally Posted by fallenjt View Post

     

    but but but you sold them at $130 last week, no?




    He has said he trades smaller blocks of stock to leverage unusual fluctuations in price.

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