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Then And Now: Top Ten DJIA Leaders By Market Cap
With everyone cheering the US economy finally completing its first lost decade, and likely the first of many, it is worthwhile to compare the top ten Dow Jones stocks by market cap today and ten years ago. What is notable is the rotation out of pharma companies, with both Merck and Pfizer dropping out of the ranking, and their replacement with taxpayer capital proxies, in the face of JP Morgan (#4) and Bank of America (#9). As both of these companies have achieved phenomenal profitability (and a resulting stock price appreciation) almost exclusively courtesy of the inverted yield curve and numerous other boons from the Fed, their market cap contribution should be carefully considered for whether it is sustainable or is one-time item (assuming the QE 1.0-xxxx.0 liquidity pump ever runs out). Also notable is CNBC parent GE's fall from grace, and its over $200 billion loss in market capitalization.
Lastly, over half a trillion in market cap (21%) has been lost by the top 10 companies, even with the Dow at the same level.
source: capiq
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Love it. Did the BLS calculate the DOW numbers?
Theres got to be a birth/death adjustment in there somewhere...
(sarcasm on)
Market cap is really only down 376 when you factor in the weaker dollar...
http://www.amazon.com/Dow-36-000-Strategy-Profiting/dp/0609806998/ref=sr_1_1?ie=UTF8&s=books&qid=1255553101&sr=8-1
Ouch! That actually hurt looking at that.
given the madness displayed by Helicopter Ben and the rate of sectoral inflation ( cca.50% ); that figure is largely undervalued ....
The first "lost decade"...and likely the first of many. Bring on 2012.
+1
yeah its been like 5000 years so i want to throw away my aztec calendar already
Fascist Electric is worth a big zero imo. That goes for Skank of America too.
I think the government allowing/encouraging the formation of these financial behemoths makes their appearances in the top 10 less surprising.
The 2009 J.P. Morgan is 1999 J.P. Morgan + Chase Manhattan + Bank One + Bear Stearns and probably a few others
2009 Bank of America is 1999 Bank of America + Fleet Boston + MBNA + U.S. Trust + LaSalle Bank + Countrywide Financial + Merrill Lynch
Operating with a variety of government handouts and subsidies, including a government put option on the entire enterprise, also helps.
This is right.
You can see a lot of 1999 bank values here:
http://www.euromoney.com/Article/1006660/Title.html
Take the combined 1999 value of Chase Manhattan ($67bn), JP Morgan ($24bn) and Bank One ($71bn), and that's firmly in the top 10 even ignoring WaMu and Bear Stearns, which were sort of corpses already when they got phagocytosed by the JPM blob.
Or take Bank of America ($117bn) and throw in MBNA ($21bn) and Fleet ($24bn), which itself was about to acquite BankBoston for $16bn. Plus LaSalle, worth $21bn in 2007, Countrywide, which was alleged to have a positive value at some point, and Merrill which was valued at $50bn-ish (not for long LOL) last September.
Dow is priece weighted. Next Fed program will be a repurchase decree
"courtesy of the inverted yield curve"
Tyler, I checked the yield curve and short-term yield is lower then long-term yield. That is not inverted.
Whitney Tilson on Bloomberg radio from earlier today - scroll to midpoint of player
http://media.bloomberg.com/bb/avfile/Markets/Analyst_Calls/voCOmPKZjA1Y.mp3
Off the subject--the voice of cnbc??? The guy whose face you never see?
I just heard him say, "Dow 10k!"
I would like to kick him in the throat..........
Off the subject, but can anyone counter the following circular reasoning?
If an investor is using beta to "manage" risk in their portfolio, they have in effect admitted that markets are efficient and prices reflect all available information. If markets are efficient, the best one can hope for is to utilize beta to dampen volatility, but not outperform. Therefore, an investor attempting to outperform the overall market and utilizig beta is a logical contradiction.
Up, up, up......
Two companies in the Dow should have gone under if we had a free market. Under Fascism, they profit at the expense of the serfs. What a system.
the dow is one share in each of 30 companies, i dont think it is the market cap of the top 10. if it is ..then god help us..how can a flat market be down 21%
If we are lucky i.e. It might be the last decade for all we know.
The decline is even more staggering in terms of real money (i.e. Gold). They were worth 9.8516 million ounces of Gold in 1999 whereas now its only 1.8122 million - a stunning decline of 443%. Considering the Dow is at the same level, this just goes on to to show what a farce all these stock "indexes" - followed by the gullible public and trumpeted by the MSM - are. They are just for show and have NO BASIS AT ALL in reality. Whoever is thinking the depression we are in will be (allowed to be) reflected in nominal stock prices to any reasonable extent is dreaming.
I don't think its possible to have a decline of more than 100%
Jesus man! I can't believe what an idiot I am. Thanks for pointing that out Anon. The decline is 81.6%. FWIW, you can say the top 10 DJIA market cap was 443% higher in real terms 10 years ago.
"Was it over when the Germans bombed Pearl Harbor?"
"Forget it, he's on a roll."
+1000
You know what boggles my mind even more, GG? It's not that the sheeple are so easily blinded to the extent the Fascists rape and pillage them. That is why we refer to them as sheeple after all.
It is the blindness of the dollar deflationists, who still today, in the face of Gold, Oil, Equities hitting 52 week highs, still believe we will see deflation.
Dollar deflation theory = FAIL.
So why does the credit market say you're wrong...really, really WRONG ..?
Absolutely. I think it is important to classify what is your scale of measure when you say the word deflation. A majority - although they may not realize it - refer to "dollar"-deflation (ala Mish, Precther et. al.) which is nothing but fantasy. An unstable fiat dollar is the only economic scale of measurement they have ever known. But the reality is that we are in deflation in real i.e. Gold terms, and have been for the past decade. I do not - for one moment - doubt that the government - if determined enough - can debase the currency to such an extent as to take stocks even past their 2007 highs.
443% - Now THAT is what you call DEFLATION.
Edit: Here is a way to fare even worse than with US stocks (which, as shitty as they are, are at least claims on real assets) - buy the dollar and Treasuries.
443% - Now THAT is what you call DEFLATION.
Or a particularly well chosen starting and ending point to hammer your existing belief deeper into your skull.
What's the comparable number for gold, excuse me, currency, versus stocks over the last 30 years? How about for the last 7 months? I guess those data points are invalid but 10 years is just the right measurement period.
Hey Prechterite moron...I can't choose a starting point for depicting something WHEN IT DID NOT EXIST. Did you not read what I wrote? Those data points are valid because THAT'S WHEN THE GODDAMN DEFLATION STARTED - NOT 30 YEARS BACK. I will also be happy to show you - not that you will understand - that we have been in real (i.e. Gold) deflation even during the past 7 months. It's not my fault that your shorts were f--ked.
I don't and never have paid any attention to Prechter. I don't have and haven't had any short positions or puts. Other than that I'm sure you're right about everything. That's why you have to attempt to make your points by shouting in all caps and labeling everybody that disagrees with you as a moron.
Unfortunately it doesn't look like these figures are adjusted for inflation. It may just be 35% worse.
lol..cant lose 443%!!!!!!
Wondering if two or three Chop Houses upgrade a few regional banks tomorrow??
when are you going to start reviewing NYC area call girls?
but, i do agree...the pump and dump good times crowd is laving fast and wild these days.
So yeah, price weighting skews the Dow... but lets pretend that is not the case.
Remember there are other sources of return besides index appreciation. So with a div yield of about 2.5%... at an even 10,000 you did receive some return over the 10-yrs.
Then, also remember the "mkt cap" comparisons remove any effect of net stock buybacks. Not sure how this would shake out for those names... but in classic fashion every company was buying back stock in 05, 06, 07 (exactly when they shouldnt have!). This does represent a + cash flow and a lower mkt cap.
Notably, MSFT did a "special dividend" of $32B in 2004.
This is all just a cruel joke on mankind, isn't it?
this is all we have to show for 24.3 trillion usd in backstops???
What is more amazing is that the Fed is buying the eqiv of 65% of the total 2009 market cap of our largest companies in MBS - $1.25 trillion (and they discussed buying more!).
Good point.
If you add in all their QE money, you get 1.25+.2+.3=1.75T, or over 85%. And that is just POMO.
Not to mention their stealth...er..."indirect" treasury purchases. The scheme is so obvious right now, it would be hilariously funny if it were not so serious.
What was Exxon Mobile? Mobile phone company?
Yeah, it should say Mobil, not Mobile.
Cisco wasn't a Dow stock in 1999. Citibank and BAC were removed from Dow recently.
When I saw JPM's numbers today. I though eh?? They doubled loan loss reserves to 30 Billion? They have over a trillion in loans out there and they claim they only needed the equivalent of 1.5% of the total in increased loan loss reserves? They have a 160 Billion just in credit card receivables. Maybe I'm missing soemthing here. It seems like they are a 5-8% adjustment away from insolvency. It seems really strange they are in the Dow.
I wonder how this ends?
comment moved to Tango post
AAPL would be on the 2009 list by market cap, but it's not in the Dow. They did it the right way, by innovatively destroying the competition, and upending several industries. They barely acquired anything since the purchase of Steve Jobs' Next Computers in the 1990s after banishing him to the wilderness in the 1980s.