Bullshit for Bulls

Monday, October 30, 2006
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Bull! (Not Bull) runs a great piece on the phony new Dow high.

While the Dow hit a new high today, not a single of its component stocks did. Interesting, isn’t it? The index is at a new all time high, but 70% of its components are down 20% or more!

The Dow Jones Industrial Average is composed of 30 stocks. Of these, fully one third of them – 10 stocks – posted their all time highs last century: Coca Cola (KO) and Dupont (DD) in 1998; and McDonalds (MCD), Walmart (WMT), Honeywell (HON), IBM (IBM), Pfizer (PFE), Verizon (VZ), AT&T (T), and Microsoft (MSFT) back in 1999 – seven years ago. Ten stocks made their all-time highs in 2000: Citicorp ( C), JP Morgan (JPM), Walt Disney (DIS), American International Group (AIG), General Electric (GE), Hewlitt Packard (HPQ), Home Depot (HD), Merck (MRK), General Motors (GM), and Intel (INTC).

Only 7 stocks made their new high in 2006, and of these only 3 of them are within 5% of their new high today. 21 of the 30 Dow stocks – that is 70%, folks! – are down 20% or more!

Meanwhile, the U.S. accountant-in-chief warns that Washington D.C. is steering the nation toward financial ruin.

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