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Strategies & Market Trends : Nasdaq 100 Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Kirk © who wrote (177)	5/21/2002 10:19:35 AM
From: Steve Lee	Read Replies (1) \| Respond to of 238

I was saving it to the spreadsheet. There was a sheet for each component and a number of sheets for manipulation and presentation. It was too complex and time consuming so now I just keep track of present values but can update very easily each day. The record is here and I make a note of it. I had a flaw prior to last week in the PS calculations hence the data is difficult to plot over time as yet. In terms of QQQ/NDX committee putting in overvalued stuff, I agree completely. I had a conversation on this thread in the first few posts about why this is so. Basically, due to the rules of inclusion, a stock must have reached a high capitalisation before being allowed in the index. Thus much of the growth is already behind the stock before inclusion. However, a shrinking stock is allowed to be in the index for years before getting booted out. So the index gets to partake in its downfall. It is even worse for the QQQ than for NDX. NDX just has an overnight reweighting when new components come in. QQQ has to sell the physical stock of the outgoing component. By definition the outgoing stock is almost worthless. So where does the money come from to buy the new incoming high priced stock? Answer - they have to sell a portion of the other 99 stocks to raise the cash. Constant erosion. Combine that with the buying from other index trackers and speculators just before a stock gets added to the index, and the QQQ holder really gets screwed!