Mike Ruiz/Bravo, Kathy Griffin – My Life On The D – List, 12 Jun 2008.

Friday, 20 Feb 2009 was a critical day for large bank stocks.

While I know I’ve also said that Friday, 10 April 2009 will be important (see Touchdown or A Little Off The Top), yesterday was just as critical. Here’s why.

Last month Jim Bianco observed:

• The Dow Jones Industrial Average (DJIA) is a price-weighted index. … Dow Jones, the keeper of the DJIA, has an unwritten rule that any DJIA stock that gets below $10 gets tossed out. [emphasis added]

Jim Bianco/Bianco Research LLC, The Dow Is Distorted, 21 Jan 2009; at Cumberland Advisors.

There are currently four financial stocks in the 30-stock DJIA, as listed below:

Figure 1: Four Financial Stocks In Dow Jones Industrial Average

The index committee that maintains the Dow Jones Industrial Average (DJIA) has clearly NOT observed the “unwritten rule” mentioned by Mr. Bianco. It has not yet “tossed out” or delisted from the DJIA, any of the financial stocks that trade below the $10 floor.

Yesterday, however, was the first time (see Figure 2, below) that the average price of these four stocks closed below the $10 floor.

 
 
Figure 2: Sum and Average Shares Prices, Four Financial Stocks In DJIA.
Source: Yahoo Finance & Author’s Calculations.

Speaking of Kathy Griffin, what’s your favorite episode of  My Life on The D-List?

Right now, I’m torn between:

• Season 1: From A To D,
• Season 2: Going, Going, Gone,
• Season 3: What I Won’t Do For A Buck, and
• Season 4: Busted In Bora Bora.

Don’t you just love reality TV? It’s so escapist.
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I used to work with numbers for a living. I wish I had time to watch a little TV as I continue my search for a new job or at least my next idea. Till next time.

REFERENCES

Ira Artman, Sterling Slivers – Touchdown, 26 Jan 2009; & A Little Off The Top, 19 Feb 2009.

Jim Bianco/Bianco Research LLC, The Dow Is Distorted, 21 Jan 2009; at Cumberland Advisors.