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I don't know how today's frequency compares to yesteryear, but I have very
serious concerns about some of the companies they are adding. FleckenBear
pointed out that one company swap on the S&P index earlier this year dropped
a company with $12 billion in revenues and added a company with $1 billion
in revenues. Presumably, the S&P folks use industry percentages and market
capitalizations to determine which companies to add/remove, but if you were
to combine a hundred or so of these moves with an economic downturn, the S&P
would hit a fairly serious air pocket. I'm not quite as cynical about the
state of the markets as Bill is, but I have to agree with him that this kind
of thing only works well in a strong bull market.
Kent
-----Original Message-----
From: Howard Hopkins <hehohop@xxxxxxxxxxx>
To: realtraders@xxxxxxxxxxxxxxx <realtraders@xxxxxxxxxxxxxxx>
Date: Friday, June 30, 2000 12:34 PM
Subject: [RT] Re: Top Five Admissions We'll Never Hear From Any Investment
Guru onTV (MOTLEY FOOL)
Any historians out there know if Standard & Poors has always droppped and
added companies to the S&P 500 as frequently as they do now? The frequent
readjustments may make indexing a more steady growth vehicle during
multi-year down/flat cycles. Comments?
Howard
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