Like many people, I have been contemplating which company should be picked to replace GM if it files for bankruptcy.
Nick Colas, Chief Market Strategist at BNY ConvergEx, has been thinking about this issue for several months now, and has a thoughtfully reasoned list of contenders.
Here they are, in a nutshell, and his case for their inclusion:
- Goldman Sachs: Legendary franchise, and one of the first large banks to hand back TARP money.
- Cisco Systems: One of the most methodical and dominant companies in technology. Strong and consistent management leadership.
- Wells Fargo: Inclusion would give the Dow more leverage to a recovery in the mortgage and housing markets
- Apple: A preeminent company in a wide array of technology products for consumers.
- Google: There's no doubt of Google's dominance in its business and its ability to stay relevant for a long time.
- Oracle: A combination software and services company, Oracle provides software that literally runs the businesses of tens of thousands of companies.
- Monsanto: Its technology and competitive advantage would be unique to the Dow.
Some people are pulling for Ford as a nostalgic pick, but he doubts another automaker will be seriously considered given the state of that industry. I agree.
I also don't think Monsanto stands much of a chance, given its agricultural link.
Personally, I'm betting on Goldman. I also think Dow Jones might like to show a vote of confidence for recovery in the financial sector.
What about you? Any nominees you'd like to see? What changes would you like to see to the index? Do you agree with Colas, that the Dow 30 should be expanded to, say, 50 names to better represent the market?
Comments
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Travelers Companies, Inc. (TRV) is taking the place of Citigroup, Inc. (C) and Cisco
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At last minute they decided to take TRV & CSCO back out of the 30 industrials, put CSCO into utilities index, but Travelers into Transportation Index.
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What next
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Does it really matter? I don't know that any investment managers use the DOW as a benchmark for measuring performance.
Dow Jones announced this morning (Monday) that The Travelers Companies, Inc. (TRV) is taking the place of Citigroup, Inc. (C) and Cisco Systems, Inc. (CSCO) is going in for General Motors Corp. (GM). Both changes are effective with the opening of trading today.
It is most likely to be Cisco Systems 75%, follow by Wellsfargo or Goldman. It's almost impossible to think of technology without knowing or hearing about Cisco System.
General Motors have really dropped the ball. Terrible management and no plan for long term growth.
Schlumberger
Where is the American Pride ?
After decades of manufacturing vehicles, General Motors seems to run out of options. Now, I guess they have to come to their senses to change their way of doing business, perhaps CEO's, Chairman and the Associates have to invest themselves and their life savings in the new GM future.