ochotona wrote: ↑Sun Sep 29, 2019 10:21 pm
WHOA! Unexpected! If you equal-weight the Dow 30, and rebalance annually, it's really kick-a$$. I had to omit DOW and V because they don't go back far enough in time.
You've inspired another backtest, Ochotona! The 30 components of the DJIA on January 1, 2000 were:
Alcoa Inc.
AlliedSignal Incorporated
American Express Company
AT&T Corporation
The Boeing Company
Caterpillar Inc.
Citigroup Inc.
The Coca-Cola Company
E.I. du Pont de Nemours & Company
Eastman Kodak Company
Exxon Corporation
General Electric Company
General Motors Corporation
Hewlett-Packard Company
The Home Depot, Inc.
Intel Corporation
International Business Machines Corporation
International Paper Company
Johnson & Johnson
J.P. Morgan & Company
McDonald's Corporation
Merck & Co., Inc.
Microsoft Corporation
Minnesota Mining & Manufacturing Company
Philip Morris Companies Inc.
The Procter & Gamble Company
SBC Communications Inc.
United Technologies Corporation
Wal-Mart Stores, Inc.
The Walt Disney Company
SBC Communications bought AT&T, and kept the name AT&T (both were in the DJIA, so one less company)
AlliedSignal merged with Honeywell and kept the name Honeywell.
Exxon merged with Mobil and became Exxon Mobil.
J.P. Morgan & Company became JP Morgan Chase.
Minnesota Mining & Manufacturing Company changed its name to 3M Company.
Philip Morris Companies Inc. changed its name to Altria Group.
Dupont merged with Dow to become DowDuPont.
Wal-Mart Stores, Inc. changed its name to Walmart Inc.
That gives the following 29 companies that still exist today:
Alcoa Inc. (limited data -- split into two companies in 2016)
Honeywell
American Express Company
AT&T Corporation
The Boeing Company
Caterpillar Inc.
Citigroup Inc.
The Coca-Cola Company
DowDuPont
Eastman Kodak Company (limited data -- bankruptcy)
Exxon Mobil Corporation
General Electric Company
General Motors Corporation (limited data -- bankruptcy)
Hewlett-Packard Company
The Home Depot, Inc.
Intel Corporation
International Business Machines Corporation
International Paper Company
Johnson & Johnson
JP Morgan Chase
McDonald's Corporation
Merck & Co., Inc.
Microsoft Corporation
3M Company
Altria Group
The Procter & Gamble Company
United Technologies Corporation
Walmart Inc.
The Walt Disney Company
With the merger of ATT and SBC, and the limited data for Alcoa, Kodak, and GM, we have 26 companies in the model portfolio. Data below are for equal weighting, no rebalancing, and dividends reinvested (in this case, rebalancing or not gave the same result: 8.11% CAGR):
Even if we consider Kodak and GM going completely worthless, that would have been only $700 or so lost ($10,000 portfolio of 30 companies is $333 invested in each). This portfolio would still have crushed the SP500.