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Strategies & Market Trends : TA-Quotes Plus
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To: STYK who wrote (9950)9/23/1999 9:41:00 AM
From: Nine_USA  Read Replies (1) of 11149
 
Here are a few observations which undermine the utility
of advance-decline type statistics when used in regard
to total markets (NYSE, NASDAQ, or all equity markets)

as of Sept 2, 1999 close, and using data for
ALL companies with fundamental data in QP+ for 1 year
or more:

1. there are 6474 stocks with Mcap of $14,755 billion
2. the top (in Mcap) 3237 stocks, had Mcap of $14,604 billion
3. the bottom (in Mcap) 3237 stock, had Mcap of $151 billion
4. MSFT had a Mcap of $490.3 billion

5. MSFT represents 3.25 times the wealth of the smaller half
of all these public firms. Other stocks like CSCO GE INTC
are each larger than the bottom 3237 stocks in Mcap.
6. the bottom 3237 stocks in Mcap are 1.02 percent of the
total of 6474 stocks.
7. MSFT is about equal to the bottom 58 percent of all firms
measured by Mcap.

I am inclined to think that the ups and more frequently
the downs of a group of stocks which comprise 1 percent of
total Mcap gives exaggerated importance to these stocks.
This explains to me the chronic poor performance of the
A-D line in recent times. And also the bleats of
long term bears about how 25% of all stocks are in a private
bear market of their own and show the main street
individual investor is losing his shirt.

These stocks do not impact the main body of mutual funds or
individual investors as their Mcap is amazingly smaller than
most market gurus take them to be.

I am NOT saying that the large Mcap stocks are fairy valued.
But that is a different question.
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