Dow Jones Chart (1900-2004)
There is a terrific Dow Jones Chart (1900-2004) for sale at the Minyanville.com gallery.
Its along the same concept of a chart we did back in 2003 -- only this one includes P/E ratios, which is a very instructive addition to the graph:
click for an enormous chart:
"Officially licensed and designed by Minyanville's own Kevin Tuttle, follow the critters through the historical ups and downs and sideways trails of the Dow Jones Industrial Average from its humble beginnings of the last century up to the present day 'Ville."
I may have to get me one for my office wall!
Source:
Minyanville Dow Jones Chart (1900-2004)
http://www.minyanville.com/shops/gallery.htm
Wednesday, August 31, 2005 | 05:22 AM | Permalink
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Take a look at this larger version of the chart.
http://www.minyanville.com/assets/catalog/products/00KAT-Dow100YrsMV.jpg
Now I have a question. Take a look at the P/E ratio portion of the chart on the bottom. According to the chart, the most recent P/E ratio is still ABOVE 22 for 2004.
BUT if you look at the current Dow Jones ETF (DIA) The current P/E ratio is only roughly 15.
http://finance.yahoo.com/q?s=dia
The Diamond trust series ETF is an excellent proxy for the Dow Jones average.
Is there a problem with his numbers for this chart or am I missing something.
Why is his chart showing a current P/E ratio of 22, while the Diamond Trust series ETF which is composed of Dow Industrial companies to mirror the Average showing a p/e ratio of 15. (It was roughly the same for 2004 I remember)
Posted by: Steve | Aug 31, 2005 6:40:44 AM
The P/E is based on the S&P500
Posted by: Barry Ritholtz | Aug 31, 2005 6:56:18 AM
I wonder why they did not use a log scale. With over 100 years spanned, I would think that would give the viewer a more accurate representation.
Posted by: Jack | Aug 31, 2005 7:54:08 AM
Oh, my mistake. Just took a look a the bigger image, and I guess I never realized how much volatility there was in the early 1900s.
Posted by: Jack | Aug 31, 2005 7:59:19 AM
OK, that was an obvious mistake, but when I look at the S&P 500 P/E Ratio its 15 too!
Here is the S&P 500 Spider fund which is weighted to the S&P
http://finance.yahoo.com/q?s=spy
The P/E Ratio for the S&P 500 is 15.81
I have my doubts about the accuracy of the chart - I wouldnt post it on my wall :)
Posted by: Steve | Aug 31, 2005 8:22:57 AM
Could the P/E be a holdover from 12/04?
Posted by: royce | Aug 31, 2005 8:43:38 AM
This pe is based on reported earnings.
If you use trailing operating earnings the s&p pe was 17.5 last month.
Posted by: spencer | Aug 31, 2005 8:50:38 AM
wonder why they did not use a log scale. With over 100 years spanned, I would think that would give the viewer a more accurate representation.
They did use log, just not what you're used to seeing. Look on the left side, each major step increases 100%, from 100, 200, 400, 800, 1600, 3200, 6400, 12800
Posted by: Uncle Jack | Aug 31, 2005 10:24:42 AM
P/E on a chart is actual;
P/E when referring to many individual stocks and/or indices is forward looking -- a best guess -- and subjetc to revision / reality . . .
Posted by: Barry Ritholtz | Aug 31, 2005 11:10:26 AM
Chart ends with data as of Mar or April 2004, when P/E's were higher, so that might explain the 22 at the hard right edge of the chart - they should update it now - great chart but almost a year and a half has gone by
Posted by: Patrick | Aug 31, 2005 11:55:01 AM
Arent all P/E ratios based on past earnings?
When I check this definition it says "earnings per share for the PE ratio are determined by dividing past 12 months earnings"
http://biz.yahoo.com/f/g/pp.html#co
BUT when I check THIS definition in the same glossary it says "trailing OR EXPECTED earnings per share"
http://biz.yahoo.com/f/g/pp.html#p_e_ratio
Earnings confuse me. Its that FUZZY MATH there
Posted by: Steve | Aug 31, 2005 1:33:23 PM
chart is too small, and too confusing
Posted by: none | Oct 12, 2005 12:58:31 PM
"Standard" PEs use 12-month trailing earnings. Forward PE's use the current price and estimated earnings for the future.
The discrepancy between the DIA and the chart is due to using old PE data. Both the DIA and the SPY have a multiple of roughly 15.
Posted by: Hans Isern | Jul 31, 2007 5:10:40 PM
