As I expected back in 2007, GM is out of the Dow, being replaced by internet powerhouse Cisco (CSCO):

Let’s start a pool: At what point in the future will General Motors
(GM) ignominiously join Eastman Kodak (EK), Woolworth and others and
get tossed out of he Dow Jones Industrials?  And, who will replace them?

I am betting this happens within 5 years, and perhaps even within 3.

As to the replacement, I might have said Google (GOOG) — but I
assume the DJ Editors learned their lesson top ticking Microsoft (MSFT)
and Intel (INTC).  Instead, my bet will be Cisco (CSCO).

General Motors (GM) and Citigroup (C) will be replaced in the Dow Jones Industrial Average by Cisco Systems (CSCO) and Travelers (TRV) respectively.

Honorable mention on the pool goes to Tom Petruno, who was expecting the US Government to be added to the DJIA.

>

Previously:
Top 10 Things the Letters “GM” Stands For (April 2nd, 2009)

http://www.ritholtz.com/blog/2009/04/top-10-things-the-letters-gm-stands-for/

When Does GM Get Kicked Out of the DJIA? (November 7th, 2007)

http://www.ritholtz.com/blog/2007/11/when-does-gm-get-kicked-out-of-the-djia/

When Does GM Get Kicked Out of the Dow, part II (June 26th, 2008)

http://www.ritholtz.com/blog/2008/06/when-does-gm-get-kicked-out-of-the-dow-part-ii/

Category: Index/ETFs, Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

10 Responses to “Cisco, Travelers into the Dow”

  1. franklin411 says:

    Well, I hope GM comes back to the DOW some day. There’s no reason we can’t make any product made anywhere in the world, and do it competitively without resorting to industrial slavery as they have in China and India. That includes autos. GM and Ford were actually doing rather well WRT restructuring until the credit crisis was followed by the recession.

    Let’s not forget that the Japanese aren’t exactly competing freely with us. The Japanese government heavily subsidized their steel industry in the 1980s, which tremendously benefited their auto sector. Not to mention the fact that they had insurmountable trade barriers against our products even as we were opening our doors to a flood of foreign goods dumped on our markets. More recently, the Prius was developed in part with subsidies from the Japanese government. It’s the same story with Airbus.

    If GM does not come back, well…I’ll be sad but that’s the life cycle I suppose.

  2. DMR says:

    Nice prediction, BR!

    Interestingly, CSCO is the closest we get to a “manufacturing” giant in the internet economy.

  3. ZackAttack says:

    Isn’t the irony delicious, since C’s purchase of TRV was what spurred the repeal of Glass-Steagall?

  4. hr says:

    Barry–

    Have you ever written on survivorship bias in regards to the performance of stock indexes?

  5. dwkunkel says:

    For what it’s worth, almost all of Cisco’s manufacturing is done in China and a large amount of its software development is done in India.

  6. General Motors shares will begin trading on the Pink Sheets tomorrow morning, says Cromwell Coulson, CEO Pink OTC Markets Inc., which operates the electronic over-the-counter market. A new ticker symbol will be issued this evening by the Financial Industry Regulatory Authority, known as Finra, Coulson said.

    At first GM shares will trade on the Pink Sheets “Current Information” category for companies that are current with SEC filings. Coulson said he expects that GM will eventually moved to the “Limited Information” category, which is designed for companies with financial reporting problems, economic issues or are in bankruptcy.

  7. Aaron says:

    I wonder whether deleted DJIA stocks like GM will engage in “”regression to the mean” where GM has no where to go but up in three to five years, causing investors and tax payers to wonder why their expectations were so pessimistic? My opinion could be wrong, though.