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To: James F. Hopkins who wrote (2938)	12/27/1998 9:05:00 PM
From: Follies	Read Replies (1) \| Respond to of 99985

Glad to hear we are converging on this. When I said same amount of shares, this is what I meant... Suppose today I invest $10000.00 into the SPX and it requires I buy 140.000 shares of GE, 110.000 shares of MSFT, etc.. One month later the SPX is up 10%, my investment is now $11000.00, If I were to add $11000.00 of new money I would buy 140.000 shares of GE, 110.000 shares of MSFT, etc. the identical amounts of shares I bought before. Those same shares now cost $11000.00 though because the index went up by that much. ALL THIS IS INDEPENDENT OF THE PRICE MOVEMENT OF THE COMPONENTS (GE could have doubled and MSFT gone down 50%). I don't mean to shout too loudly but it is the key to cap weighted indices I believe.

To: James F. Hopkins who wrote (2938)	12/28/1998 12:52:00 AM
From: HairBall	Read Replies (1) \| Respond to of 99985

Jim: So with the S&P it's better said that you own a certain set percentage of each companies shares. And that automatically makes you cap weighted, as the big caps will have more shares outstanding, and I think that's what you were saying all along, and if you keep that set percentage you don't have to re-allocate to track her..unless they or a company makes some changes. Even splits wouldn't effect your weighting. Jim, that was what I was implying...<g> Regards, LG