Dow / Gold
Yesterday, the Dow closed above the 12,000 for the first time.
For some further perspective into the current rally, Chart of the Day presents the Dow divided by the price of one ounce of gold:
This results in what is referred to as the Dow/Gold ratio or the cost of the Dow in ounces of gold. For example, it currently takes 20.1 ounces of gold to “buy the Dow.”
This is considerably less that the 44.8 ounces back in the year 1999. When priced in gold, the current stock market rally hasn't amounted to much. In fact, the longer-term trend is actually down!
Source: Chart of the Day
Friday, October 20, 2006 | 11:15 AM | Permalink
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Or you could plot the Dow versus the price of computer megaFLOPS! C'mon, I see this one all the time and it is a curiosity at best. The DJIA is a terrible index: it is price-weighted, for the love of mike, to say nothing of representing an ad-hoc crumble of just a few stocks. Gold hasn't been real currency since FDR, and today is consumed mostly in the form of jewelry.
Posted by: wcw | Oct 20, 2006 11:34:09 AM
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