The Dow since 1920
Posted on August 2, 2007 by Richard Beddard
Filed Under Ramblings |
It’s to indexes what the QWERTY keyboard is to computers. Because it only has 30 constituents, weighted by price, not capitalisation, the Dow Jones Industrial Average is not an ideal market barometer, but it’s the most widely reported index and it has a very long history.
As well as price, Valueline’s chart (Dow Jones Industrial Average, 1920-2005 (PDF)) tracks:
- earnings
- dividends
- book value
- price earnings ratio
- price dividend ratio
- earned as a % of book value
- earned as a % of average price
- dividend yield
- earnings growth rate
- dividend growth rate
- book value growth rate
- earnings as a % of price plus earnings growth
- dividend yield plus dividend growth
- Moody’s Aaa corporate bond yield
- CPI growth rate: inflation
- Real long-term Aaa corporate bond yield
- Gross Domestic Product
It’s one for the chart library.
Category: Ramblings
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2 Responses to “The Dow since 1920”
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Hi Richard, Another great chart.
Given the weakness in the dollar (and with probably further to fall), it’s interesting to look at the dow as priced in other currencies or commodities. After a quick google, I found the following site which illustrates my point:
http://www.financialsense.com/fsu/editorials/2007/0416.html
Thanks Iain, a whole series of great charts! If the Dow is crashing in relative terms (i.e. because everything else is going up faster in price), where does that leave investors? On the one hand it’s confirmation of the commodity boom (but not of how much longer it can go on). On the other hand it doesn’t contradict the view (if you put a gun to my head I’d probably admit to sharing it) that larger companies are currently undervalued!