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« The Dunning-Kruger Effect: Can We Profit? | Main | ETF Update: Taking a Small and Cautious Short Position »

June 23, 2010



TDL -- I agree about the Dow. I have good reasons for taking this as my illustration, mostly because it is everyone's shorthand for the market.

It is also true that those who follow the Dow also trade it, so I think my approach has some validity.

I very much appreciate your comment.



Proteus -- I congratulate you! Most people blew through the article in a few minutes, sticking with their pre-conceived ideas. You were willing to think, and perhaps it opened up some new ideas for you.

This was my objective, and I am delighted that it worked for some readers.

Thanks for taking the time to write.



I would argue that the Dow is not necessarily the "market" (or even representative of the market) and it might not be necessary to know, or follow, any of the components. If the Dow is not relevant to a specific trader/investor, then knowing the this index would not constitute relevant information. That being said, I like the thought process you are attempting to put readers through. I liked the series of questions you put forward (they gave me something to ponder), as well as Wednesday's article.



Tough little quiz, and not trivial at all.

For the record, after half an hour, I had 15 right, and four wrong. I got seven more in another four hours, but shame on me for missing two stocks I own, and one my wife owns. Terrible.

A month ago, I checked the P/E on a random selection of half a dozen Dow companies and was shocked at how reasonable they were - HPQ under 14! Then I did the same for half a dozen random companies not in the Dow, and was surprised how much higher they were.

It will be interesting to see more analysis of Dow 20k.

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