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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Robert Graham who wrote (20722)	6/24/1998 3:54:00 AM
From: paulmcg0	Respond to of 94695

As far as the S&P 500 goes, I will agree that it is a broader view of the market. However, there are problems with it as well. Like the DJIA it is calculated based on the share prices that make up the index. But, it also has a few peculiarities that distort the data. One of them is that the market capitalization for the stock is also figured into the index. Market caps are a theoretical value -- for example, the market cap of Yahoo! (not a S&P 500 stock), is well over 6 billion dollars, but if everybody decided to sell YHOO shares at the same time, you can bet that the proceeds from the stock sale would be considerably less than 6 billion dollars. Another peculiarity with the S&P 500 is that stocks are partially chosen for it based on their trading volume, and the dollar value of shares traded each day. This indicates that these might not be exactly the shares favored for longer periods of time by the "buy and hold" set, but instead reflect whatever stocks are currently hot. (People are using the S&P 500 for long-term pictures of the market while it is more suitable for the short term.) For more info on the S&P indexes, please see proinvestor.com Sorry about the delay in responding, but I was camped out in the hills of central California. (Waking up in a tent and hearing birds singing is definitely better than waking up to an alarm clock telling you to go to work!) Paul M.