Bob Brinker: Market Savant & Radio Host Message Board

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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host

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To: Math Junkie who wrote (15479)	12/18/2001 4:00:07 PM
From: Math Junkie	of 42834

I saw an interesting discussion of the potential consequences of periodic index reweighting for people who are holding the NASDAQ 100 for eventual recovery. It starts here: Message 16675329 "I think QQQ holders get screwed when the NDX 100 is reweighted. Because the reweighting is by market cap, the real dogs get to devalue the NDX on the way down, but when they get taken out, their weighting is so insignificant that it gives the index no benefit, instead getting replaced by some other stock that has a large market cap, and by implication has already done a substantial amount of the appreciation outside of the index. It is kind of like an index always composed of last year's winners."

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