Fun with the Dow Jones Industrial Average.

November 10th, 2008

As this chart illustrates, the DJIA is down 33% this year:

I took a couple of minutes to compare all of the DJIA’s component stocks with the Average as a whole and came up with a simple breakdown.

Underperformers:

The middle of the pack:

Overperformers:

Particularly stark is the divide between the worst-performing stock in the bunch, General Motors, and the best-performing, Wal-Mart, as shown in this chart:

Considering my last post, I’ll refrain from bashing GM any more today. But it’s worth noting, for the bazillionth time, that Wal-Mart is insulated in hard times by its perennial low-price guarantee, which in turn is backed up by its pricing power with suppliers and by the efficiency of its supply chain.

Wal-Mart is always popular among folks who have to watch every nickel. It’s just that, in hard times like these, that description applies to a whole lot more people than usual.

Category: Consumer goods, Economics

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3 Comments so far

CHM November 11th, 2008 2:12 pm

Interesting article. I agree with you on Walmart but I find it odd that with these economic times, McDonalds is an overperformer. Don’t you think it should at least have slid back to middle-of-the-pack?

I totally understand why people are holding back on buying new vehicles at this time.

Tim Walker November 11th, 2008 4:55 pm

CHM — Two things in McDonald’s favor:

1. It’s cheap, and a cheap substitute for some competing products, which tends to play well during a recession.

2. The company has actually managed itself better over the past couple of years.

Let’s see if they can keep it up.

Top November 2008 posts. -- Hoover’s Business Insight Zone February 6th, 2009 8:08 am

[...] Fun with the Dow Jones Industrial Average. [...]

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