Dow 10,000 is a gas

September 29, 2009

Jack Healy’s story in The New York Times about the Dow getting closer and closer to the magical 10,000 mark is OK, but it contains few surprises. But I really was blown away by the chart that shows the perfomance of Dow component stocks since March 29, 1999–when the index crossed 10,000 for the first time.

The chart, which includes a number of stocks that are no longer part of the Dow–such as AIG, Citigroup and Eastman Kodak–is interesting because more component stocks have lost ground over the past 10 years than posted gains.

The list of losers that are still part of the Dow include a broad swath of US industries. Some of the stocks that have lost ground in the decade since the Dow first hit 10,000 include American Express, Walt Disney, Cisco, JPMorgan Chase, Microsoft and Home Depot.

This long list of illustrious losers should be a sober reminder for the bulls prediciting an ecomonic rebound simply because the stock market is rising.

And maybe just as disturbing is the fact that two of the biggest gainers in the Dow over the past 10 years are oil and gas giants, ExxonMobil and Chevron. That, of course, is a byproduct of the ill-fated and ill-advised love affair US citizens have with gas guzzling SUVs.

Exxon and Chevron’s dominance should also serve as reminder that we remain too heavily dependent on a dwindling natural resource that makes us dependent on tyrannical foreign governments and is quickly destroying our environment.

One can only hope that 10 years from now, the top performers in the Dow will include a solar cell manufacturer and a wind farm manufacturer.


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