Fantasy trading: If Apple were listed in the Dow

March 3, 2015

What if Apple joined the 30-member Dow Jones Industrial Average?

Sustained dominance has turned Apple into a cultural force. Imagining what the tech behemoth could do, buy or influence with its vast hordes of cash has become something of a parlor game. After a record-setting first quarter yielded $74.6 billion in revenue and a quarterly net profit of $18 billion, Kristen Scholer blogged for the Wall Street journal:

Also standing at record levels: Apple’s cash and marketable securities. That figure ballooned to $178 billion last quarter, up from $155 billion in the prior period. With that money, Apple could:

1) Buy Merck, which had a market value of $175 billion at Wednesday’s close; or
2) Purchase the bottom 38 companies in the S&P 500 by market cap for a total of $174 billion; or
3) Hand each American a check for $556; or
4) Give each family $2186.73.

All of this success has been great for holders of Nasdaq or S&P 500 index funds—both indices include Apple—but what if the company’s stock were listed elsewhere? Using this interactive Reuters graphic, substitute Apple for any one of the 30 stocks that comprise the Dow Jones Industrial Average, and track how differently the index would have recently fared. Spoiler: likely better. As Rodrigo Campos and Chuck Mikolajczak write for Reuters, “If Apple had replaced a badly lagging stock such as IBM, which has dropped more than 13 percent since Apple’s split, the Dow would now be about 450 points higher than its Friday close at 18132.70 (and have gained 9.8 percent rather than the 7.1 percent increase it has recorded, without dividends).”

AppleDOW022715

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