« Is Open Source Good for a Companies Stock? | Main | How Many Times Do I Have to Say it? »

Imagine if the Dow was 3,000 points higher than it is today. That’s where it would be if it had merely kept pace with the S&P 500 over the last few decades.

The Dow used to be about 10 or 11 times the S&P 500 (I’m referring to the index number, not market cap), but the ratio slowly sank for a long time.

The Dow/S&P 500 hit its low point in 1985 when the Dow was less than seven times the S&P. Since then, the Dow has had a bit of a comeback. In 2002, the ratio broke 9.5 for the first time in over 25 years.

After falling back some from 2002 to 2004, the Dow has outpaced the S&P 500 over the last two years.

Posted by edelfenbein at May 13, 2008 1:03 PM