Talk:Dow Jones Industrial Average

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Former featured article candidateDow Jones Industrial Average is a former featured article candidate. Please view the links under Article milestones below to see why the nomination failed. For older candidates, please check the archive.
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DateProcessResult
January 10, 2010Featured article candidateNot promoted
On this day...Facts from this article were featured on Wikipedia's Main Page in the "On this day..." column on May 26, 2005, May 26, 2006, May 26, 2007, September 17, 2007, May 26, 2008, May 26, 2009, and May 26, 2010.
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One dow point represent 1 billion dollars?[edit]

Is that true? opinions are welcome...216.58.19.235 (talk) 06:00, 13 July 2011 (UTC)[reply]

No. As the article says, the DJIA is the sum of the prices of thirty stocks divided by the DJIA divisor (currently ~0.132). It doesn't necessarily say anything about the market capitalization of the thirty firms or go even further and state more about the market as a whole.DavidRF (talk) 15:23, 13 July 2011 (UTC)[reply]
Agreed. Perhaps you are thinking of the Wilshire 5000 index, which does have a correspondence with the total market value, in the neighborhood of 1 billion dollars per point. See that article for details. TomS TDotO (talk) 18:01, 6 February 2013 (UTC)[reply]

File:DJIA 2000s graph (log).svg[edit]

Why does this graph use a non-linear scale? The scale is not required at all for the graph's data set and I find its subtleness a bit derailing when trying to look at the graph. Is it that it's financial data which is usually displayed on logarithmic scales and is therefore more quickly readable to people experienced with such things? — Preceding unsigned comment added by Bishopgraeme (talk • contribs) 16:15, 16 August 2011 (UTC)[reply]

Its usually rate of return that people are concerned with and constant rates are lines on a log plot. 100 points at 5000 is 2% while 100 points at 15000 is 0.67%. It is true that all the ups and downs have effectively cancelled each other out since 2000.DavidRF (talk) 19:20, 16 August 2011 (UTC)[reply]

General Electric: Original component, or no?[edit]

One place in the article says it was one of the original 12 stocks, then goes on to list the other 11. But elsewhere, it says that none of the original 12 stocks are still in the DJIA, and GE was not added till 1907. Which is it? — Preceding unsigned comment added by 76.123.214.199 (talk) 02:45, 23 December 2011 (UTC)[reply]

The article does an excellent summation of American financial and diplomatic history but does not point out the number of times the Dow components changed when and why the originals were dropped; the large number of changes from about 1960 to the current list and what was added and removed at each change point. This is more useful information than a recap of the cold war. Thank-you----tb — Preceding unsigned comment added by 173.25.177.89 (talk • contribs) 01:28, 1 December 2013 (UTC)[reply]

Misleading Graphs[edit]

These graphs should have the Y axis start at the origin. Right now, they are very misleading. — Preceding unsigned comment added by 66.41.51.74 (talk) 04:33, 24 January 2012 (UTC)[reply]

You've never seen a log plot before? Its the only way you can represent over a century of data. A constant rate of return shows up as a straight line on a log plot. Using a linear scale, a constant rate of return becomes an exponential curve... it would be like nothing happened before 1980 (you wouldn't be able to see the Great Depression). *That* would be misleading.DavidRF (talk) 04:40, 24 January 2012 (UTC)[reply]
The graph showing Black Monday is linear, and its y-axis starts at 17000. This is highly misleading, and as it is a linear plot, completely unnecessary. the 9/11 and 1990's graphs are also linear, and so should also start at 0.109.150.134.159 (talk) 08:55, 14 August 2012 (UTC)[reply]

Impossible image?[edit]

According to the article the dow has been funded in 1896 but there is a image that shows historic dow-rates back to 1790. how is this possible? 80.108.113.34 (talk) 18:51, 18 July 2012 (UTC)[reply]

Correct Dates in "Dates Added"[edit]

General Electric has been in the Dow since its inception in 1896 but is not listed so in the table or in the article as a whole. Also, there's isn't any references for any of the dates these companies were added...so I don't know. — Preceding unsigned comment added by 72.28.169.105 (talk) 07:03, 3 December 2012 (UTC)[reply]

DJIA does not include regular dividends[edit]

I believe it is correct that DJIA does not include the components regular dividends (it does include splits and special dividends). Does anyone have an authoritative cite for this? — Preceding unsigned comment added by Aviatorpilotman (talk • contribs) 16:18, 6 February 2013 (UTC)[reply]

How to handle new highs[edit]

I suggest that we discuss a bit about how to record the new highs being set for the DJI. I think that it is appropriate to have a permanent note of when the old high was passed, on March 5. Whether we have a permanent note of each successive new high, I am indifferent, but I think that we should pay attention to what this will look like for years in the future. Of course, we don't know what wobbles there will be, but we already know that March 5 is no longer an all-time high, nor is March 6, and it appears that March 7 is did not set an inter-day high. I don't have a good suggestion for the wording, but let's talk this over, rather than just making conflicting edits. TomS TDotO (talk) 14:34, 8 March 2013 (UTC)[reply]

I'm all for removing 50% of point gain/loss and milestone point info in the 2000s and 2010s section. I'd hate for this article to turn out to be a record book of superfluous info. Also, the whole point system for the Dow is arbitrary and meaningless. As for largest percent gains/losses, I would like to remove all of them except for the most newsworthy ones. There already another article that covers this: List of largest daily changes in the Dow Jones Industrial Average. --HSukePup (talk) 15:14, 3 March 2020 (UTC)[reply]

Components[edit]

The reference states: "Retrieved March 14, 2010". Is the current components listing up to date? Compare to the page S&P/TSX Composite Index which is more current. Mgouin (talk) 03:11, 23 March 2013 (UTC)[reply]

This article only lists 29 stocks instead of all 30. AT&T has been omitted. — Preceding unsigned comment added by 174.28.158.221 (talk) 19:56, 6 December 2013 (UTC)[reply]

Criticism about the DOW[edit]

How about including a criticism section on the DOW Jones Industrial Average about it not being a good economic indicator? NPR's Planet Money did Episode No. 443 criticizing it. http://www.npr.org/blogs/money/2013/03/12/174139347/episode-443-dont-believe-the-hype and The New York Times has another http://www.nytimes.com/2012/02/12/magazine/dow-jones-problems.html?_r=1 --F15 sanitizing eagle (talk) 04:11, 16 April 2014 (UTC)[reply]

It is definitely a dangerously useless indicator of market health. I've made some edits to highlight criticisms about the DJIA. I have not yet reorganized it to a full criticism section, but a full section might be needed in the future. --HSukePup (talk) 20:18, 12 August 2019 (UTC)[reply]

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Please clean up the introduction.[edit]

Please remove extraneous information from the introduction and provide more clarification. Readers don't need to immediately know that the Dow Jones Industrial Average is also known as seven other names or acronyms, neither do we immediately need to know who owns the Dow Jones Industrial Average; or who owns the owner; or why it's called the Dow Jones Industrial Average. Please tell us, in the introduction, what the Dow Jones Industrial Average is; why and how it is used; the formula for calculating the average and an explanation of the components of the formula. As an example of needed clarification, the following text in the introduction confuses more than it clarifies; it uses the term "divisor" yet offers no explanation for "divisor". Of course a number is divided by a divisor; ALL numbers that are divided have been divided by a divisor, but what IS that divisor, specifically?

"The value of the Dow is not the actual average of the prices of its component stocks, but rather the sum of the component prices divided by a divisor, which changes whenever one of the component stocks has a stock split or stock dividend, so as to generate a consistent value for the index. Since the divisor is currently less than one, the value of the index is larger than the sum of the component prices."

In conclusion, the introduction needs extensive cleanup and clarification. I haven't read beyond the introduction as the experience was too exhausting to venture further.

Sincerely, RDT Rainydaytreat (talk) 01:08, 26 January 2017 (UTC)[reply]

You're right. Fixed. --Nemo 15:47, 9 February 2018 (UTC)[reply]

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Add explanation of why it's 30 companies[edit]

I'm new to Wikipedia. Offering a suggestion for this page. The most interesting thing I ever read about the DJIA is that it's 30 companies because when it was first published in the late 1800s, there were no computers. The writer wanted to come up with a quick way to tell the country how stocks did that day. Picking 30 large companies made for a do-able hand calculation that provided a good indication of that day's market performance. Of course, today we can instantly find out what the entire NYSE stock exchange has done for the day. Nonetheless, the DJIA is still the most quoted market number in the world. Why? likely because the Dow Jones company would like it that way, they publish the number, they own the WSJ (or did). But really it's kind of crazy we even report this number when there are much more accurate market performance metrics readily available. alantc57 — Preceding unsigned comment added by Alantc57 (talk • contribs) 20:29, 29 June 2018 (UTC)[reply]

I think that would be interesting enough to mention in the "Early Years" section. Do you have an actual source for that? Also, I'm almost certain the Dow gets reported most often because it makes for clickbait titles. A "1000 point drop" sounds a lot more dramatic than a "3% drop". Similarly, "largest point gain since xxxx" sounds way more dramatic than "gained 3% for the 30th time in history". It's for clickbait titles. --HSukePup (talk) 15:01, 3 March 2020 (UTC)[reply]

Cleaning up History section[edit]

The history sections for the past decades of 1990s, 2000s, and 2010s feel overly detailed. I'm recommending a cleanup where only newsworthy events are kept. We can probably remove about 50% of the info there on point gains and milestones that aren't newsworthy. Alternatively, we can list large milestones in bullet points so that they don't clog the flow of these sections. I'm slightly hesitant to remove too much info, so I'd like to discuss before cleanup.

Most of the information is already duplicated in these more-appropriate articles:

--HSukePup (talk) 15:51, 3 March 2020 (UTC)[reply]

Cleanup complete. --HSukePup (talk) 17:02, 12 March 2020 (UTC)[reply]

A mistake in the § Early years subsection[edit]

In the opening paragraphs of the article it is stated that the DJIA started its life on 26 May 1896:

It is the best known of the Dow Averages, of which the first (non-industrial) was originally published on February 16, 1885. . . . The industrial average was first calculated on May 26, 1896.[1]

This is repeated in the first sentence of the § Former components section:

As of April 2, 2019, the components of the DJIA have changed 53 times since its beginning on May 26, 1896.

And in the first sentence of the § Initial components subsection:

Dow calculated his first average purely of industrial stocks on May 26, 1896, creating what is now known as the Dow Jones Industrial Average.

And yet, the first sentence of the § Early years subsection says that "the index" "was first published in the mid-1880s":

When it was first published in the mid-1880s, the index stood at a level of 62.76. It reached a peak of 78.38 during the summer of 1890, but ended up hitting its all-time low of 28.48 in the summer of 1896 during the Panic of 1896.

"The index" here can only be understood to refer to the DJIA, as the title of the article is "Dow Jones Industrial Average", resulting in a clearly erroneous statement that the DJIA "was first published in the mid-1880s". We should either remove these two sentences altogether, or make it clear that they refer to a different Dow average (not the DJIA). — UnladenSwallow (talk) 08:46, 13 March 2020 (UTC)[reply]

References

  1. ^ "26 May 1896: Charles Dow launches the Dow Jones Industrial Average".

Objection to "currently"[edit]

What's meant by "currently" in this article? (E.g., it states "Since the divisor is currently around 0.1458,..." Is this automatically updated somehow?) Surely "as of <date>" should be used in Wikipedia articles instead of "currently". How does a reader now when "currently" was written? 51.219.141.160 (talk) 15:08, 29 June 2020 (UTC)[reply]

Good point; I've tried to handle this here. — JohnFromPinckney (talk) 21:32, 8 August 2020 (UTC)[reply]

The value of the index can also be calculated ...[edit]

How is it that with each companies price using a different factor that:

"The value of the index can also be calculated as the sum of the stock prices of the companies included in the index, divided by a factor which is currently (as of November 2021) approximately 0.152." DGerman (talk) 16:38, 25 August 2022 (UTC)[reply]

Not sure what question you are asking? The DJIA index value is calculated by adding the stock prices for each of the 30 components together then dividing by the current DJIA divisor. Since the summation of the stock prices is well below the current index value of around 32,000 the divisor is well below 1 (currently 0.15172752595384). Hope that helps. Ksu6500 (talk) 19:14, 27 August 2022 (UTC)[reply]
I thought you had to take MMM *2.88 + AXP * 3.56 + AMGN*4.88 ... DGerman (talk) 19:48, 27 August 2022 (UTC)[reply]
No. Read the Calculation section of the article. The percentages you are showing like 2.88% for 3M are only shown in the table to convey how much each component contributes to changes in the value of the index as of a certain date. Meaning the higher the weight the more a change to that component's stock price moves the index (since it is a price-weighted index). The weighting of each component is never used to calculate the value of the index. You can calculate the index value yourself by creating a stock list of the 30 components on Yahoo Finance (YF) then exporting that data to a spreadsheet. Summarize the prices of each component then divide by the divisor and this calculated value should match exactly to the DJIA (^DJI) price on YF. Ksu6500 (talk) 20:08, 27 August 2022 (UTC)[reply]

"Industrial" is incorrect[edit]

This sentence is likely incorrect: "The word "industrial" in the name of the index initially emphasized the heavy industry sector, but over time stocks from many other types of companies have been added to the DJIA."

No, I'm sorry but my understanding is that this is not correct. The word "industrial" used to be broader word and was a synonym of the modern words like "enterprise," "business" or "corporate," and comes from the Latin word industria, meaning diligence or purpose. Think industriousness, which is closer to that older meaning. For further discussion please see this paper. Thank you. Not logged in 2 (talk) 01:14, 6 May 2023 (UTC)[reply]

DOW divisor[edit]

The divisor needs to be updated. There was a recent corporate action in MMM that affected it. 38.108.109.250 (talk) 14:24, 9 April 2024 (UTC)[reply]

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