>Paul Henry Rosenberg wrote:
>>
>>
>> My point is that the Dow isn't an objective measure in the first, since
>> it's basis changes over time more to suit promotional/ideological
>> purposes than for any objective reasons.
>
>Yes, but any changes to it are announced well in advance, so anybody who
>wants to replicate its financial performance can easily do so. The Dow
>Jones represents something very real: the approximate value of stock
>ownership. The ratio of the weekly wage to the dow jones is very
>relevant, but one should compare apples to apples. The easiest way to do
>it is to use nominal (rather than inflation-adjusted) wages to the
>non-adjusted Dow Jones index (which I wouldn't know how to correct for
>inflation, anyway).
My only objection would be of the techno-dweebish sort - the Dow, with just 30 stocks, is too narrow to be representative. I do the stocks/wage thing with the S&P 500, which represents about three-quarters of the total U.S. stock market capitalization; the Dow used to be just a third (haven't checked that in years though). I'll post a pretty recent version of this chart to the LBO web site in a few hours; watch this space for details.
Doug