Apple to replace AT&T in Dow Jones on March 18

The Dow is a ridiculous stock index. It doesn&#x27;t adjust for inflation, and - more importantly - just looks at the stock price, not the underlying market cap. So if Caterpillar (market cap 49.44B) rises 5$ from 80 to 85, the Dow rises 32 points. If Exxon Mobil (market cap 362 Billion) rises from 86 to 91, the Dow rises the same 32 points, even though the first rise means CAT grew only in 3,3 billion Market cap, while XOM grew 20,95 Billion.<p>NPR&#x27;s Planet Money has a great episode on the DJI: <a href="http://www.npr.org/blogs/money/2013/03/12/174139347/episode-443-dont-believe-the-hype" rel="nofollow">http:&#x2F;&#x2F;www.npr.org&#x2F;blogs&#x2F;money&#x2F;2013&#x2F;03&#x2F;12&#x2F;174139347&#x2F;episode-...</a>

Index portfolio manager here.<p>The one thing the article fails to mention is that the addition of Apple will coincide with a 4:1 stock split in Visa[0]- the index&#x27;s highest priced (and thus highest-weighted) holding.<p>Although the addition of Apple had been anticipated, Visa&#x27;s split was definitely a catalyst. Had they not added Apple, the technology sector within the index would have dropped significantly, in line with Visa&#x27;s split. The addition of Apple will minimize the impact.<p>0.<a href="http://neworleanscitybusiness.com/blog/2015/03/06/visa-stock-split-to-put-apple-in-place-of-att-on-dow-jones-industrial-average/" rel="nofollow">http:&#x2F;&#x2F;neworleanscitybusiness.com&#x2F;blog&#x2F;2015&#x2F;03&#x2F;06&#x2F;visa-stock...</a>

Earlier this week Reuters took a look at the Dow&#x27;s past performance had Apple replaced one of its components <a href="http://graphics.thomsonreuters.com/15/apple-djia/index.html" rel="nofollow">http:&#x2F;&#x2F;graphics.thomsonreuters.com&#x2F;15&#x2F;apple-djia&#x2F;index.html</a>

This post[1] from back in 2012 looks at how different things would have been for all the DJIA-referencing articles if Apple had been included in the average all along, instead of Cisco. (It also points out ridiculousness of the index that makes this possible.)<p>For a time before computers it made sense, but it&#x27;s amazing that it&#x27;s remained relevant this long. These days, there&#x27;s no real reason to even use the S&amp;P 500 as a market proxy given the existence of more comprehensive indexes, but at least it has a logical basis.<p>[1] <a href="https://news.ycombinator.com/item?id=9161242" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=9161242</a>

The DJIA is so flawed I&#x27;m surprised this is news. A dollar change to an $800 stock affects the DJIA just as much as a dollar change tn a $30 stock so the DJIA is nearly meaningless.

Given the relatively recent passing of its founder, a founder who remained so intensely and directly and involved with new product development up until the very end, Apple&#x27;s stock is so bizarrely difficult to value right now that I can&#x27;t fathom making it part of a bellwether indicator like the DJIA.