08-11-2011, 05:03 PM | #161 |
Ma'at - Goddess of Truth & Justice
Join Date: November 15, 2001
Location: Asheville, NC
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Re: Economy
Crazy stock market:
Monday down 635 points Tuesday up 430 points Wednesday down 520 points Today up 423 Somebody put the market on medication ......
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08-11-2011, 05:21 PM | #162 |
Ninja Storm Shadow
Join Date: March 27, 2001
Location: Northport,Alabama, USA
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Re: Economy
LOL it's going to level out, right now I bet folks are buying on the down side just to sell after it goes up some. Tomorrow it will most likely be down, people taking profit that they made.
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Crustiest of the OLD COOTS "Donating mirrors for years to help the Liberal/Socialist find their collective rear-ends, because both hands doesn't seem to be working. Veitnam 61-65:KIA 1864 66:KIA 5008 67:KIA 9378 68:KIA 14594 69:KIA 9414 70:KIA 4221 71:KIA 1380 72:KIA 300 Afghanistan2001-2008 KIA 585 2009-2012 KIA 1465 and counting Davros 1 Much abliged Massachusetts Last edited by John D Harris; 08-11-2011 at 06:42 PM. |
08-11-2011, 05:54 PM | #163 |
Drow Priestess
Join Date: March 13, 2001
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Re: Economy
Index averages are, in and of themselves, fairly irrelevant, especially the Dow. The formula that crunches the numbers to give the Dow is one of the most complex numeric calculation algorithms ever devised by man.
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08-11-2011, 08:24 PM | #164 |
Jack Burton
Join Date: May 31, 2002
Location: Ireland
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Re: Economy
Yes, they're called something specifically - I don't remember what. But they say if you understand these algorithms they'll probably hire you.
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08-11-2011, 11:38 PM | #165 | |
Ma'at - Goddess of Truth & Justice
Join Date: November 15, 2001
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Re: Economy
Quote:
The divisor gets adjusted for stock splits, stock dividends (3 for 2 swaps for example), and changes in the list of specific companies in the dow 30. The Dow Jones Industrial Average was created by Charles Dow in 1896. He initially calculated the Dow by adding up the price of 12 selected stocks and dividing by 12. The number of stocks in the Dow was increased to 20 in 1916 and 30 in 1928. Up until that point, the DJIA remained a true average as the Dow Jones Company just added up the share prices and divided by the number of stocks in the index. On November 5th, 1928, the Dow Divisor was reduced from 30 to 16.02 essentially altering the index from a straight price average. The divisor has been continually updated since then to reflect further changes in the 30 component stocks, stock splits and dividends. Norman Fosback describes how the Dow Divisor works in "Stock Market Logic": "Assume that the prices of the 30 stocks summed to $3,000. Then the 30-stock average price would be $3,000 divided by 30, or 100.00. If one of the thirty stocks was quoted at $200, but then split two-for-one so that its price fell to $100, the sum of prices would be only $2,900. To maintain the Average at its actual level of 100.00, the divisor of the Average is systematically altered. Since $2,900 divided by 100.00 equals 29, the new divisor is set at 29, down from 30, in effect preserving the average price at $100 ($2,900 divided by 29 still equals 100.00)." Dow Jones currently adjusts the Dow Divisor if any event effects the Dow Jones Industrial Average by 5.0 or more points. Stock splits are not the only factor that affects the Dow Jones Industrial Average -- stock dividends actually have an effect as well. When a stock pays a dividend, the "specialist" who facilitates trades in the stock at the exchange deducts the amount of the dividend, rounded to the nearest 1/8th, from the price of the stock. For example, if General Electric was trading at $50 and was scheduled to pay a $1 quarterly dividend on June 1st, General Electric would trade "ex-dividend" on June 2nd at only $49 a share and shareholders of General Electric would have the stock ($49) and the dividend ($1), for a total of $50 worth of stock and dividends. Maybe the recalculation of the divisor is a lot more complicated than this makes it out to be, but it doesn't seem to be. (Edit: NO, it isn't - see the calculation at the bottom of the post) http://www.cmegroup.com/trading/equi...ry-divisor.pdf http://www.fool.com/DDow/HistoryOfTheDow6.htm You can check it out yourself. Here's yesterdays changes: Total price change = 55.94 Dow Divisor = 0.132129493 DJIA Change = 55.94/0.132129493 = 423.37 http://money.cnn.com/data/dow30/ http://intellivestsecurities.blogspot.com/ You can check out the individual changes in the dow 30 on both the CNN link and the blog Hey maybe I should call dow jones and ask about a part time job. LOL
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08-12-2011, 09:06 AM | #166 |
Drow Priestess
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Re: Economy
I could have sworn that the Dow calculation was a complex algorithm; I thought I had seen it online once but I guess I could be mistaken. Weighted complex averages are, of course, relatively simple to understand but now I guess I'll have to double-check on the actual formula. It is a matter of intellectual curiosity only and not terribly important.
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08-12-2011, 09:40 AM | #167 | |
Ma'at - Goddess of Truth & Justice
Join Date: November 15, 2001
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Re: Economy
Quote:
I checked out the S&P 500 thinking you might have been thinking of that one. It's similar to the DOW but it uses a weighted sum of the stock price. It multiplies the stock price by the number of outstanding shares producing a measure of market capitalization. It then divides that number by the same weighted sum for a given base period. Unlike the DOW, since the S&P uses a weighted product of shares times price, the S&P 500 doesn't need to do divisor adjustments for stock splits. It does adjust for the following: Share Reissuances Share Repurchases Special cash dividends Company change Rights offering Spinoffs
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08-15-2011, 07:47 PM | #168 | |
Ironworks Moderator
Join Date: February 28, 2001
Location: Boston/Sydney
Posts: 11,771
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Re: Economy
Warren Buffett wants to get taxed more. He doesn't think he is getting taxed enough.
Quote:
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08-15-2011, 08:46 PM | #169 |
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Iron Throne Cult
Join Date: August 27, 2004
Location: North Carolina
Age: 61
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Re: Economy
Maybe Congress will actually listen for a change, but I doubt it.
But his message will resonate very loudly with the general population, so there's a good chance a lot of current Repub Congressmen will be former members by the end of 2012.
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08-15-2011, 09:01 PM | #170 |
Jack Burton
Join Date: May 31, 2002
Location: Ireland
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Re: Economy
Refreshing change.
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