These 10 Dow Jones Facts Will Blow Your Mind

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In no particular order, here are 10 facts about the Dow Jones Industrial Average  that just might blow your mind:

  1. Twenty-two of the 30 Dow Jones components trade within 5% of their 52-week highs today. Seventeen of the 30 blue chips are within 2% of their annual tops.

  2. To confirm the upward momentum, only three Dow stocks trade within 10% of their annual lows right now. Only IBM sits within 5% of its 52-week bottom, and even Big Blue has bounced back 3.7%. You can enjoy a deeper discussion of these three Dow dogs by clicking here.

  3. The average Dow member has grown revenue by an annual clip of 5.2% over the last three years. The fastest sales grower? Caterpillar looks back at three years of 15% revenue CAGR.

  4. Despite Caterpillar's massive sales growth, the stock is also on that list of bottom-rung performers. That's the way the cookie crumbles when growth by massive acquisition goes wrong.

  5. And investors still expect more trouble for Caterpillar. The heavy-equipment manufacturer is the second-most shorted stock on the Dow, with 3.6% of shares sold short.

    CAT Percent of Float Short Chart

    CAT Percent of Float Short data by YCharts.

  6. At only $77.7 billion, Dow Jones newcomer Goldman Sachs carries one of the smallest market caps on the index. If the Dow were a cap-weighted index, like the S&P 500, Goldman Sachs would account for just 1.6% of the Dow's total score. But we call it the Dow Jones Industrial Average for a reason, as the scores are calculated as an adjusted average of the component share prices. Instead, Goldman's $170 share price gives it a 6.8% weight in the Dow's price-weighted system.

  7. The price-weighting choice used to put IBM head and shoulders above all other Dow stocks. This summer, IBM represented more than 10% of the Dow's total weight. Chevron ran a distant second at just 6.1%. All of that changed when the Dow's steering committee kicked out three of the index's smallest and cheapest tickers. Two of the replacement stocks came with triple-digit share prices to match IBM's formerly dominant weight, and the third trades close to $100. Now, IBM controls 7.1% of the Dow's score, and Chevron sits at 4.9%.

  8. The Dow's average annual growth was just 5.6% across the last decade, 12.5% in each of the two decades before that, and 5.8% between 1974 and 1983 -- hardly hypergrowth, even in the best years.

  9. The restrained growth of the Dow Jones index may not set many hearts aflutter, but you can still get rich by investing in a Dow Jones tracker. Little by little, those four decades add up to a 2,500% return on your 1974 investment. That's 26 times your money, proving that patience truly is a virtue.

  10. Speaking of eternal patience, IBM first joined the Dow Jones in 1932. Only six of the 30 Dow components of that time remain today, and IBM took a 40-year break between 1939 and 1979. If you (or your great-grandfather) bought IBM shares for $9 1/8 in 1932, the starting price works out to just $0.35 per share after 2,615% of split adjustments. Today's $179 price gives you more than 510 times the original investment. Annual returns of 8.4% really add up over 77 years.

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