Zeev's Turnips Patch-No Politics (ZEEV)

[S Chun-Li]

Re BPCOMPQ errors prior to 2000.

My memory of this is that BPCOMPQ before 2000 or thereabouts was calculated in hindsight.

The implication is that using this hindsight approach, they looked back at which of the COMPQ components had bullish charts for each day in history. However, the list of COMPQ components was not adjusted to take account of additions and deletions form the index prior to the date of calculation.

That's not a very eloquent explanation so here's an example:

BPCOMPQ for first trading day of year 1998 was calculated using the list of stocks in 2000. So company XYZ was included for calculation. But copany XYZ was on the NYSE in 1998 so shouldn't really have been included.

The errors are worse for BPNDX because that index has significant chages in composition each year.