Dow-Jones a Hoax

[longknife]

I don't understand the “science” of economics so most of this article makes little sense to me. However, this seems rather clear to me:

On the other hand, companies in the take-off or acceleration phase are added to the index. This greatly increases the chances that the index will always continue to advance rather than decline. In fact, the manner in which the Dow index is maintained actually creates a kind of pyramid scheme! All goes well as long as companies are added that are in their take-off or acceleration phase in place of companies in their stabilization or degeneration phase.

Perhaps someone can clarify this for me – or refute the premise of the article @ Prison Planet.com » The All-Time-High In The Dow Jones Industrial Average Is A Hoax

 

[SteadyMercury]

I don't understand the “science” of economics so most of this article makes little sense to me.

Yet you continue to post political-agenda based partisan drivel in these forums, day after day.

On the other hand, companies in the take-off or acceleration phase are added to the index. This greatly increases the chances that the index will always continue to advance rather than decline. In fact, the manner in which the Dow index is maintained actually creates a kind of pyramid scheme! All goes well as long as companies are added that are in their take-off or acceleration phase in place of companies in their stabilization or degeneration phase.

Perhaps someone can clarify this for me – or refute the premise of the article @ Prison Planet.com » The All-Time-High In The Dow Jones Industrial Average Is A Hoax

The Dow doesn't change that much, and if you look at the history of the changes they are hardly companies in take-off or acceleration phase. In 2013 Visa, Nike, and Goldman Sachs were added, all of them companies over 50 years old.

If you're worried about a churn bias see Russell 2000 or S&P500, both of which hit all-time hights in Q1 2014.