What is the cost for being dumped?

[Dumb ole famrboy]

XOM, PFE, RTX. AMG for PFE, HON for RTX are somewhat parallel tradeoffs. XOM for Salesforce was a surprise for me. I guess the DOW views the weight of energy to be about 50% less important to the overall economy?

[Vantage 8 dude]

XOM, PFE, RTX. AMG for PFE, HON for RTX are somewhat parallel tradeoffs. XOM for Salesforce was a surprise for me. I guess the DOW views the weight of energy to be about 50% less important to the overall economy?

The readjustment in the composition of the DOW is more related to an attempt to more adequately represent the overall composition of the economy. Yes, no doubt seeing much of that in these changes. In fact we saw several years ago when autos, railroad and other "antiquated" industries/companies were removed that the "powers-that-be" was trying to more accurately reflect a more "modern" economic viewpoint. Why do you think that a company like Apple was added? Seems pretty stupid to me that IF the first trillion dollar company wasn't some how represented this whole DJIA would be totally out of whack. The one danger is that the larger the capital that is represented by a single stock's market price the more the more it can unduly influence the direction of the index.

The obvious beneficiaries, at least initially, will be Salesforce, Amgen and Honeywell. The fact that many money managers, mutual funds and individual investors might reflect the composition of the DOW will provide a great deal of buying influence on these three equities. On the other hand, there will likely be selling pressure on ExxonMobli, Pfizer and Rockwell Tech as portfolios are adjusted. Over time I expect the price of these additions/subtractions will be determined by their own merit(s). 

[ricepig]

Why are you taking up half a page on your posts? Not the written part, the blank space? Of course, Ponderin said they're both the same.......

[hit_that_line]

Who cares? No one indexes to the DOW.

[Vantage 8 dude]

Sorry about that....unfortunately whenever I make change to what I've posted, particularly at the end of a paragraph, my computer sometimes jumps down quite a ways. For whatever reason when I attempt to move the next paragraph back up it will not permit to do so. Therefore I have to retype. When I go to eliminate the disjointed response it captures much of the remaining space. Thus the large amount of space taken. I will work diligently in an attempt not to have the problem to continue.

BTW for anyone who feels whatever I write, no matter the amount of space taken, is not educational, incorrect or just not worthwhile I say "It's a free country, at least for now". Therefore you're more than welcome to think or believe whatever one feels. IF the information is not of value, then all I can say is "don't bother reading it". If, however, one wants to differ in viewpoint then by all means post or IM me. I'm always ready to discuss however/whenever one wants to do so.

[Vantage 8 dude]

Who cares? No one indexes to the DOW.

Oh....that would be news to a bunch of investment managers, mutual/index funds such as ETFs and even some individual investors. I'm very sure they would very much disagree. Perhaps that why all three of these additional stocks are having such a rough day....huh.

[kingofdequeen]

Salesforce is an expensive useless goliath of a program.   awful.

[hit_that_line]

Oh....that would be news to a bunch of investment managers, mutual/index funds such as ETFs and even some individual investors. I'm very sure they would very much disagree.

I am a manager. No one benchmarks to the DOW.

[kingofdequeen]

I am a manager. No one benchmarks to the DOW.

[hit_that_line]

Sorry you didn't meet our minimum. Merrill would love to have your $50k rollover.

[ricepig]

Sorry about that....unfortunately whenever I make change to what I've posted, particularly at the end of a paragraph, my computer sometimes jumps down quite a ways. For whatever reason when I attempt to move the next paragraph back up it will not permit to do so. Therefore I have to retype. When I go to eliminate the disjointed response it captures much of the remaining space. Thus the large amount of space taken. I will work diligently in an attempt not to have the problem to continue.

BTW for anyone who feels whatever I write, no matter the amount of space taken, is not educational, incorrect or just not worthwhile I say "It's a free country, at least for now". Therefore you're more than welcome to think or believe whatever one feels. IF the information is not of value, then all I can say is "don't bother reading it". If, however, one wants to differ in viewpoint then by all means post or IM me. I'm always ready to discuss however/whenever one wants to do so.

I'll tell Ponderin about that last part, I doubt he cares.

[Vantage 8 dude]

I'll tell Ponderin about that last part, I doubt he cares.

Well that makes us even....neither do I care about Ponderin's opinions.

[kingofdequeen]

Sorry you didn't meet our minimum. Merrill would love to have your $50k rollover.

no doubt.  if we're still alive at the end of my career...i'll come callin.   i hate you...but dammit i respect you.

[Vantage 8 dude]

I am a manager. No one benchmarks to the DOW.

So apparently you speak for all the various index managers, institutions, ETFs, etc. BTW I'd be interested how much money you happen to manage. When I was in the business I suppose I could have called myself a "manager". However, I preferred to just call myself a financial advisor 'cause that's what I did for my clients; and yes that included pension funds, corporate retirement accounts, as well as a vast number of individuals and small businesses. The again, my team and I were only working with +$250 million. Didn't realize we were missing out and pretty much called ourselves anything we wanted.

[Vantage 8 dude]

Salesforce is an expensive useless goliath of a program.   awful.

Well has been said many times, many ways.....each to his own......Merry Christmas!! And I suppose that's why all the fools who determine the composition of the DOW elected to add it.

[kingofdequeen]

our blue and yellow daddies are pushing Workday.  replacing all the SAP systems.

[Vantage 8 dude]

our blue and yellow daddies are pushing Workday.  replacing all the SAP systems.

"Blue and yellow daddies"

[Vantage 8 dude]

Salesforce is an expensive useless goliath of a program.   awful.

Okay....well excuse me as I bow to your wisdom. However, a BUNCH of investors didn't get the word on that. See the stock began trading at $163.92 in January. Today (as I post) the stock is up $8.46 (4.06%) putting the stock currently at $217.04. I calculate that thus far in '20 the stock is up 53.12%. While I realize that pales in comparing to someone like Apple and Tesla, I'm not too greedy so I'll be more than happy with that performance. Obviously SOMEONE likes it besides me. Oh well.........

[Vantage 8 dude]

I am a manager. No one benchmarks to the DOW.

I suppose because no one benchmarks to the DOW that's why everyone is ignoring today's addition. Like CRM currently trading at $217.04 +$8.46 (4.06%), Amgen +$12.89(5.47%) and Honeywell advancing $5.99 (3.76%). With those kind of numbers it's very clear that investors couldn't care one iota.

[kingofdequeen]

i think people push SF into areas where it's not applicable.   

i'm sure it's great for Farmers and State Farm and other marketing folk.

[hit_that_line]

Our CRM is supposed to be some stripped-down version of SF. I don't use it like I should.

[Vantage 8 dude]

Our CRM is supposed to be some stripped-down version of SF. I don't use it like I should.

So I take it that you're not necessarily using your comment(s) in conjunction with its stock performance and/or investment worthiness. Sorry to learn of your difficulties, however, it's fairly obvious that with CRM's growth rate a TON of folks feel differently.

[kingofdequeen]

it's the CRM that integrates with Workday, so i can see why it's going up.

[rzrbackramsfan]

As a proud salesforce owner (I own like 40 stocks so big woop), I can give a timely update on them.  After being up 3.64% today, they're up 12.39% after hours!!

They earned $1.44/share versus $0.67 expected. 

Revenue was 5.15B for the quarter vs. 4.9B expected and is 29% greater than this quarter last year. 

Also, as a proud Rocket Mortgage holder which I bought at $20 around a week and a half ago. Has anyone figured them out? Haha.  I know what they do, and obviously like their online platform and competitor position, but their ipo is confusing. 

Confusing because of their corporate structure.  Initially the owner had 0 economic shares but all the voting shares, and then over the past week, the owner has done a lot of option exercising.  I believe... he's exercising options to gain more shares but Maybe just voting shares? I'd like to see that he has economic interest. 

Also, their earnings in their prospectus is confusing, earnings of 900MM, but around 800MM go to non controlling interest? 

Last the amount of the shares issued is in question.  I think they have a market cap ranging from 3-5B. 

It's up 60% since IPO.

[hit_that_line]

I've always gotten a creepy vibe from Benioff.

[rzrbackramsfan]

I've always gotten a creepy vibe from Benioff.

He looks and sounds like Phillip Seymour Hoffman

[Vantage 8 dude]

As a proud salesforce owner (I own like 40 stocks so big woop), I can give a timely update on them.  After being up 3.64% today, they're up 12.39% after hours!!

They earned $1.44/share versus $0.67 expected. 

Revenue was 5.15B for the quarter vs. 4.9B expected and is 29% greater than this quarter last year. 

Also, as a proud Rocket Mortgage holder which I bought at $20 around a week and a half ago. Has anyone figured them out? Haha.  I know what they do, and obviously like their online platform and competitor position, but their ipo is confusing. 

Confusing because of their corporate structure.  Initially the owner had 0 economic shares but all the voting shares, and then over the past week, the owner has done a lot of option exercising.  I believe... he's exercising options to gain more shares but Maybe just voting shares? I'd like to see that he has economic interest. 

Also, their earnings in their prospectus is confusing, earnings of 900MM, but around 800MM go to non controlling interest? 

Last the amount of the shares issued is in question.  I think they have a market cap ranging from 3-5B. 

It's up 60% since IPO.

You obviously noticed that the sales, net revenue and earnings came in much higher than expected. That along with their being added to the DOW has pushed the stock up $55.53 (25.59%) as I post this. Nice

[rzrbackramsfan]

You obviously noticed that the sales, net revenue and earnings came in much higher than expected. That along with their being added to the DOW has pushed the stock up $55.53 (25.59%) as I post this. Nice

I think one thing that I missed in my earlier post is that they also significantly increased their expectations for sales going forward.

[Vantage 8 dude]

I think one thing that I missed in my earlier post is that they also significantly increased their expectations for sales going forward.

It's all good

[Biggus Piggus]

Let's just put more wildly overvalued tech stocks in the market indices. Make the next market collapse all the more dramatic.

I was looking through FactSet's US sectors. They have their own indices, weighted by market cap. Holy crap, I was amazed at the performance of the consumer durables sector as calculated by FactSet. The single best-performing group over the past 12 months.

If you look at the index composition, Tesla is over 40% of the group by market cap. So it's basically wild speculation in Tesla that is driving the supposed outperformance of consumer durables, which ex-Tesla look quite ordinary.

We're back to a point in history, like 1999, when valuation does not seem to matter + the leadership of the market is increasingly concentrated among a few huge caps.

[Wisco Pig]

Sorry about that....unfortunately whenever I make change to what I've posted, particularly at the end of a paragraph, my computer sometimes jumps down quite a ways. For whatever reason when I attempt to move the next paragraph back up it will not permit to do so. Therefore I have to retype. When I go to eliminate the disjointed response it captures much of the remaining space. Thus the large amount of space taken.

Fixed.

[Vantage 8 dude]

Let's just put more wildly overvalued tech stocks in the market indices. Make the next market collapse all the more dramatic.

I was looking through FactSet's US sectors. They have their own indices, weighted by market cap. Holy crap, I was amazed at the performance of the consumer durables sector as calculated by FactSet. The single best-performing group over the past 12 months.

If you look at the index composition, Tesla is over 40% of the group by market cap. So it's basically wild speculation in Tesla that is driving the supposed outperformance of consumer durables, which ex-Tesla look quite ordinary.

We're back to a point in history, like 1999, when valuation does not seem to matter + the leadership of the market is increasingly concentrated among a few huge caps.

I would certainly agree with much of what you say. However, at the MOMENT the outside returns in many sectors of the market are being primarily accounted for by the almost nonexistent interest rates. All that money sloshing around in the financial system is going to go somewhere.

As far as your observations concerning the bubble of '99 there are several major differences: First of all, the tech companies of today for the most part have actual earnings. Back around the turn of the millienum many of the .com stocks had no earnings, and never would. Heck, virtually anything with a ".com" in its title was bought merely by the virture of the "tag". Secondly, as mentioned above, the monetary/interest rate situation was far different-you actually had other legitimate options back "in the day". Third, IMO many investors are beginning to see "light at the end of the tunnel" as we hopefully reaching the end of the major impact of COVID-19. Obviously that means that many are beginning to factor in an actual improvement in economic data, consumer speading and actual recovery in the job market. As we've seen time and time again optimism is almost always a shot in the arm for equities. The real change, at least in the foreseeable future is which sector(s) have been largely ignored during this rally while having a great opportunity to benefit as things turn.

All these factors should help to address the very narrow participation of the market. No doubt the larger tech stocks have accounted for a vast majority of the recent rally. Unfortunately for the overall health of the markets we'll have to have more sectors/stocks help take up the slack and keep the momentum going.

[hit_that_line]

At some point valuations will matter again. JPow has even managed to decouple the market from consumer sentiment.

[Dumb ole famrboy]

As I said in my original post UTX/RTX and PFE were not much of a surprise. UTX spun out Carrier and Otis before merging with Raytheon to form RTX. Giving it high weight aerospace. Boeing has aerospace covered. PFE's upcoming merger retains their legacy drugs and pushes their R&D/technology into the new company. Looking down the road PFE will be a smaller company and nothing more than a generic drug manufacturer.

XOM/Salesforce although being attributed to the APPL split and weighting of tech in my opinion there were better choices - such as GOOG or FB. No this move was more of a statement by the DOW on energy/oil more so than anything else. 

[hit_that_line]

Upjohn (PFE's legacy stuff) is going to Mylan. PFE will be the pipeline.

[Vantage 8 dude]

At some point valuations will matter again. JPow has even managed to decouple the market from consumer sentiment.

A lot of folks forget there's a market rule that says that the value and direction of the markets do not necessarily have to mirror the health of the economy. There's also a great quote/observation from the economist
John Maynard Keynes: "Markets can remain irrational longer than you can remain solvent". Bingo, bingo, bongo.!