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the survivor bias of the DJIA... comapnies that get weaker are dropped out before they collapse fully, and are replaced by the healthiest companies around.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Thu Aug 20th, 2009 at 05:32:44 PM EST
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That is true of capitalization-weighted indices such as the FTSE 100 and the S&P 500 as well. When a declining company drops below the top 100 or 500 or whatever it is replaced by an up-and-coming company.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Thu Aug 20th, 2009 at 05:36:50 PM EST
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