Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Yes, I think this nails the coffin of the DJIA actually: the US economy was really growing 1960-1975. The S&P picked up this growth, not the DJIA. Around 1980, we had two parallel effects: a secular boom in equities that boosted the S&P, and also the beginning of "management" of DJIA so that it performs at least as well as S&P.

Post dot-com crash, the engineering becomes blatant: DJIA hung near flat when S&P crashed (they both had a dip on 9/11 though, you can't rebalance the index faster than airplanes crashing). And when S&P picked up, it just returned to dot-com bubble level. DJIA actually went higher !


by Pierre on Fri Aug 21st, 2009 at 04:56:22 AM EST
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