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Strategies & Market Trends : Bill Wexler's Profits of DOOM -- Ignore unavailable to you. Want to Upgrade?

To: Bill Wexler who wrote (212)	3/3/1998 12:39:00 AM
From: Brad Davies	Read Replies (2) \| Respond to of 4634

Bill, Actually I have often questioned the conventional wisdom that the stock market rises over the long, long, term. As I understand it most of those who make this claim will point to the long term performance of some index, say the Dow. The problem with this analysis is that the Dow, and other indexes, are always being rebalanced with the losers being cut out. For example, Bre-X was on the Toronto index until it was discovered to be a fraud. I wonder what a chart of the actual stocks in the Dow index in say 1930 would look like today if they didn't conveniently rebalance it periodically. Conversely, it would be very interesting to chart a basket of stocks that met certain "garbage criteria" over a long period of time to see how such a basket would do. For example, pick a year (at least 5 years ago), select the highest market cap stocks that have no earnings (or even better, no revenue) and see how that basket did over the ensuing period of time. I wonder if anyone has ever done the analysis. Any thoughts? Ron