Biotech Values

[exwannabe]

A bigger problem with the DJIA is that it’s a price-weighted index—i.e. a $200 stock has ten times as much weight in the index as a $20 stock, even if the two stocks have the exact same market capitalization.

I certainly agree that the DOW formula is anachronistic. There is no valid reason that the calculation needs to be so simple that it can be done easily by pencil.

I suspect one could find more extreme examples, but if CAT had not elected to split in '05 the DJI would now be about 13220 (I am estimating the unsplit divisor, but the error will be minimal).

Why the hell should a split affect anything?

They really should have some balls and redo the index. Keep the same companies but use a rational index calculation.