Semi-Equips - Buy when BLOOD is running in the streets! Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!

LRCX 157.09

-1.7%

3:59 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Math Junkie who wrote (9774)	4/21/2001 11:56:45 AM
From: Kirk ©	of 10921

The problem is that, as John pointed out, the weightings in the index are not strictly by market cap. Perhaps this is why his calculation on the entire index gives a negative P/E and yours gives a positive one. Yeah, that part is still troubling. I just added a column to my sheet for "% of Total Market Cap" and MSFT is 18% and INTC is 10.6% Qcom = 2.3% CSCI = 6.8% ORCL = 5.4% and so on if you go just by straight market cap. Some of these are double their current weighting in QQQ. It looks like I can not plug their algorithm into my spreadsheet either. From your link: The Nasdaq-100 Index is calculated under a modified capitalization weighted methodology. The methodology is expected to retain in general the economic attributes of capitalization weighting while providing enhanced diversification. To accomplish this, Nasdaq will review the composition of the Nasdaq-100 Index on a quarterly basis and will adjust the weightings of Index components using a proprietary algorithm if certain pre-established weight distribution requirements are not met. I guess that explains when MSFT and INTC have done well since the year started and QQQ has done quite poorly. The QQQ is adjusted such that currently it ONLY has a 50% dose of these two stocks (plus a few others) while it over weights many other stocks like CIEN which is given double its market cap weight in the index! I wonder if they tried to cherry pick their favorite stocks to make this index? They sure failed as their index is underperforming the Nasdaq Composite significantly this year and it could be due to their half weightings in Intel and Msft which are both up this year. I guess I COULD be correct if I say "I have calculated the capitalization weighted P/E for the 100 stocks in the NASDAQ100 index" which is different than saying "I have calculated the P/E of the Nasdaq100 index"? This allows me to keep my spreadsheet and not adjust quarterly by hand the 100 weightings. 8) Kirk PS I wonder how many that buy this index REALLY understand what it is? I don't own it and I was not aware that the creators decided to give the best companies in the index (Cisco, Msft, Intel, Dell, etc...) only half their market cap weightings and the more speculative stocks got higher weightings!

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next