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The economy and it's outlook

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Re: The economy and it's outlook

Postby hardcore » Tue Mar 03, 2009 11:00 am

Curtis Pride wrote:It's kind of hard to put weight behind the opinion of someone who uses the DOW as a yardstick for the market's performance.

The Dow is pretty much meaningless.



Dow isn't meaningless and the dow is just one yardstick.Don't make assumptions
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Re: The economy and it's outlook

Postby Curtis Pride » Tue Mar 03, 2009 11:03 am

yes, it is meaningless.
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Re: The economy and it's outlook

Postby hardcore » Tue Mar 03, 2009 11:06 am

Curtis Pride wrote:yes, it is meaningless.



Prove it. I guess all those traders and market analysts are wrong and CP is right
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Re: The economy and it's outlook

Postby Curtis Pride » Tue Mar 03, 2009 11:20 am

"prove it". You mean like with regression analysis and cited whitepapers?

Yeah, no thanks. Why don't you try using google. Anyone in finance with a brain knows not to use a sample size of 30 as an indicator of the strength of the economy. It's not an indicator of our manufacturing strength - it's got Disney and McDonalds in it. It's a tiny sample that too heavily weights a specific company. GM and AIG got shelled. The DOW crashes because of it. Did the rest of the economy lose 90% of its value like GM and AIG did? No.

It's also a "composite" and not an "average". Which means that if GM loses half its value and goes to $1, the Dow moves the same if McDonalds goes from $52 to $51. It's completely worthless.

In terms of stock indices that matter: it's the S&P500 for the broader economy.

But I think Americans and newsies like big numbers, so it seems like bigger news when the DOW loses 900 points than when the S&P500 loses 80.
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Re: The economy and it's outlook

Postby hardcore » Tue Mar 03, 2009 11:28 am

Anyone with half a brain knows the dow is down 50% and all the other market indices are down similarly. They all follow the same path.
To say 30 large companies with millions of employees is meaningless pretty much means you are clueless
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Re: The economy and it's outlook

Postby Curtis Pride » Tue Mar 03, 2009 11:36 am

Ahh, ignorance is bliss.

The Dow Index is like ERA or pitching wins or RBI. It may directionally be somewhat indicative of performance, but it's horribly flawed - to the point that people who know what they are talking about don't even pay attention to it.

There are a multitude of better indicators of what you are trying to indicate.

ERA, like the Dow is prevalent, just because - well just because. And because its prevalent, people think it's the tool they should be using.

It's not. It's flawed. Know this.
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Re: The economy and it's outlook

Postby hardcore » Tue Mar 03, 2009 11:48 am

Who cares if it's flawed, so is the 500 index. The topic is about the outlook on the economy and the markets.
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