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Strategies & Market Trends : MDA - Market Direction Analysis

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Nov 14 4:00 PM EST

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To: James F. Hopkins who wrote (2891)	12/26/1998 9:17:00 PM
From: jjs_ynot	Read Replies (1) of 99985

I need to do some simple mathematical exercises to understand the implications of market cap weighting. My intuition tells me that once a market cap weighting has been established; the movement of a stock price in the weighted portfolio will correct for the weighting. I guess I need to get it into my dense skull. It does seem if market cap changes due to stock options, stock buybacks, mergers, cross-ownership and a million other variations then the weighting needs to be readjusted. Sorry for being so lsow on the uptake.

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