Dow Jones Industrial Average: Heartbeat of America

Source Wikipedia

The Dow Jones Industrial Average is a composite of 30 stocks that is price-weighted and the character of the average can be assessed merely from the first 3 stocks as a sample, taken alphabetically. 3M is an industrials company that makes Scotch Tape for example and much of its early history was innovation in saving money using chemical processes such as extracting products that had seeped into rocks. It’s early competitive edge was clearly an adaptability into different fields from superior science and engineering. We turn to American Express which delivered express goods like money to areas around the United States. Wells Fargo was founded when American Express decided not to go into California. American Express delivered money to British prisoners of war in Germany and ventured into the investment banking business by purchasing Shearson Lehman and then selling the stake a few years before Lehman went into bankruptcy from the financial crisis. American Express I believe made itself resemble a financial holding company and received government bailout money from the Troubled Assets Relief Program (TARP). Generally all financial institutions which received TARP money lost a degree of control over their management to the United States government. American Express you can see had a big part to play when its president got frustrated he couldn’t access money at all except in big cities in Europe and so he formed a business based around delivering money. The right question to ask about American Express is what is the nature of the money it delivers and the answer is American Express delivers credit. So American Express delivers you what you need but you have to pay it back later. This is not dissimilar to the treatment you get at the workplace when you are given what you need to do your job but you have to pay it back later when you have to do new assignments for your manager. You are paid at the workplace in credits as well as you can use it to buy what you need but you have to pay it back later by more work for more money sure but if you skip on the future work you are at a situation where you take reputational damage and may not be easily employable again. American Express in other words is a bit like a payday lender. That it received a bailout from the government should tell you how bad things were that the payroll department effectively outsourced at many corporations could no longer afford to deliver money to you in credits.

Finally we move to Apple which is an innovative company with a lot of power struggles between a charismatic founder and people who were told to bring him into line. Apple was cited as an example of a company that grew despite recession and you can see Steve Jobs only endured the financial crisis of 2008 by selling his soul as Apple is not meant to carry a market because Apple produces consumer discretionary products and everyone knows discretionary spending is ninety percent done by women in the USA in the consumer area for example in spending on Estée Lauder. He tried to change the nature of the consumer discretionary sector to his products which are bought by men and women and accordingly played a role in changing the American lifestyle which Dick Cheney said was not a compromise. In short Steve Jobs was a captain of industry and he led the Americans in his sector straight into the business of competing with Canada for the lowest price as Canada is a country known for producing quality products of high technology and is oriented towards value as a casual survey of Canadian culture would tell you or you can ask why Canada was so focused on taxes and their effect on consumption by value or why Canadians drive over the border to buy American goods to avoid their taxes. In short Jobs made a category killer which was the iPhone which he marketed as a low cost technology product instead of what he could have done which is market is as an upscale discretionary spending item for the women in the United States. The result was the iPhone gained market share and put the Blackberry out of business in Canada but he lost control of his own company to Canadian sharks imported from Silicon Valley. I would know I worked with them. They use ampullae of Lorenzae while I use a complex echo location system used by dolphins working together to spot where the sharks are. I can tell you Citadel the hedge fund where I worked did not take any TARP money and we still have balls of steel. But behind me isn’t Citadel this round it is Tudor and the difference between Tudor and Citadel is like the difference between Eric Bana from Munich and Daniel Craig from 007. Eric Bana when he isn’t bailing out Orlando Bloom from his marriage with Helen of Troy of UPenn, is busy taking down Achilles Brad Pitt and still has time to spy on one on with Daniel Craig. In short, Citadel has some traders and portfolio managers and quants and maybe even an analyst or a strategist back there. But Tudor has swaption traders, Chinese language experts, and above all we aren’t even listed as a client at Goldman Sachs instant messaging we are that good. The point is never how much money does a person make but how many people does your money make? The Dow Jones Industrial Average is America and when it was bailed out we got new growth that was from the government but even if you work for the government you still wish for the old America back and so let’s not think of War of 1812 and Trump being mad but World War One and our so called allies being the ones still allied to America after the financial crisis which was like an alien invasion which may come again. Your wraith from Starcraft. They invaded our mental realm didn’t they? I wouldn’t know I got wounded in five places with Robert E. Lee and I think the right answer is they invaded our economic system which is as real as the internet, you actually don’t need money to live just a family but without an economic system good luck starting a family. I will wait for the explanation why America is acting this way but in the meantime I will play Canada for Flanders Fields as my guitar gently weeps for Carlos Santana.


No comments

Other posts

Value Investing: What Is It?
Value investing is epitomized in a quote I think by Warren Buffett who says when someone with money and experience meet, the one with money leaves with experience and the one with experience leaves with the money. That doesn’t sound that nice and it is a typical type of feel you get around very experienced American businessmen of a sort that they are laughing at you while you do business...
Read more
American Water Works: Utilities
Utilities tend to be recession-proof and in the case of a water utility called American Water Works, the earnings go up smoothly over time and carry the stock forward in a relatively smooth ride. Water is in shortage across the world in many places because it is difficult to transport aside from there being a lot of water notably in Canada. I want to address for a moment what the...
Read more
AMD: Technology Sector
AMD got my vote as soon as I found it named a chip K5 after kryptonite to take on Intel in a move that shows both respect and fearlessness against its competitor. The technology sector is usually known for names in consumer electronics or excitement-focused social media like Apple or Facebook respectively but I think that type of technology is mainly effective because it is serving people who otherwise are...
Read more
More posts