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Strategies & Market Trends : Jim's Nasdaq100 Special as a basket.
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To: Monty Lenard who wrote (1690)5/4/2000 10:55:00 PM
From: James F. Hopkins  Read Replies (1) of 2103
 
Monty ; & ALL ..GE will start trading SPLIT on Monday..
The DJI is price weighted not market cap weighted.
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If we rule out all other market conditions I assume this will effect the Dow stocks..by changing the divisor used ?
But I haven't heard mention of that.

My guess is they calculate the close Friday..and adjust the
divisor so that the DJI would open Monday at Fridays close
( if all else remained equal.) To do this they need to add
more shares of "every" stock in the index in order to make up for the lowered price that GE will have.

This will most effect the stocks with the lowest "float"
as funds that track the dow buy the extra shares needed
to adjust.
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Other things and news may effect her more..but all else
being equal the dow and her stocks should get a
little help from the split..CAT the most.
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In spite of all tath it don't mean she won't go down :-)
I'll watch CAT tomorrow and I "may" try a small bet
on her if I can pick the low. I don't like her debt
level but it seems every thing is carrying a lot of
Dept..
Talking of Dept it's at record highs..and
while they sold most of it when rates were low "right
now with the dollar so high they are paying the interest
with more expensive dollars than they got when they sold
it.
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In other words
One more effect of Spam upping the rates..it makes the
dollar go up..old debt is in effect being paid back
with "higher" dollars not cheaper ones.
While all that takes time to work it's way through the
pipeline..By the time the next earnings come out 3 months
from now ( maybe sooner ) You will hear mucho moaning and bitching about how the strong dollar hurt Sales and all that spin spin spin..
-----------
Jim
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