Mag 7 in the Dow

Key Concepts

• Mag 7 Stocks: A group of seven large, influential technology companies.
• Dow Jones Industrial Average (DJIA): A stock market index representing 30 large, publicly owned companies traded on the New York Stock Exchange.
• Index Inclusion/Exclusion: The process by which companies are added to or removed from stock market indices.
• Founder CEO: A chief executive officer who is also the original founder of the company.

Dow Jones Industrial Average (DJIA) Composition and "Mag 7" Inclusion

This discussion focuses on the surprising inclusion of several "Mag 7" technology stocks within the Dow Jones Industrial Average (DJIA). The speaker expresses surprise at the extent of this inclusion, highlighting that four of the "Mag 7" are now part of the Dow.

Specific "Mag 7" Stocks in the Dow:

• Amazon: Confirmed to be in the Dow.
• Apple: Confirmed to be in the Dow.
• Google (Alphabet): Confirmed to be in the Dow.
• Nvidia: The speaker believes Nvidia was added to the Dow, potentially replacing Intel. This is later confirmed to be true, with Nvidia replacing Intel on November 1st, 2024. The speaker notes this would have been a significant buying opportunity for Intel.

"Mag 7" Stocks NOT in the Dow:

• Meta (Facebook): Explicitly stated as not being in the Dow.
• Tesla: The speaker believes Tesla will likely never be added to the Dow.

Founder CEOs and Dow Inclusion:

An interesting observation is made regarding the presence of original founders as CEOs in relation to Dow inclusion.

• Meta and Tesla: These are identified as the only "Mag 7" companies (along with Nvidia, though Nvidia's situation is nuanced due to its recent addition) that have their original founder as CEO and are not in the Dow.
• Microsoft: Is in the Dow but has had its third CEO.
• Amazon: Is in the Dow but has had its second CEO.
• Alphabet (Google): Is believed to be on its third CEO. The speaker mentions Eric Schmidt as a former CEO of Alphabet.

The speaker finds this exclusion of Meta and Tesla, especially given their founder-led status, to be "disrespectful."

Top Companies by Weight in the Dow

The discussion briefly touches upon the top five companies by weight in the Dow Jones Industrial Average.

• Goldman Sachs
• Microsoft
• Caterpillar
• Home Depot
• UnitedHealth

The speaker acknowledges that while these are the top by weight, the inclusion and significance of Apple are also noteworthy.

Synthesis and Conclusion

The primary takeaway from this transcript is the revelation and discussion surrounding the significant presence of "Mag 7" technology companies within the Dow Jones Industrial Average. The speaker expresses considerable surprise at this development, particularly the inclusion of Amazon, Apple, Google, and Nvidia. The exclusion of Meta and Tesla, especially in light of their founder-led structures, is highlighted as a point of interest and perceived slight. The conversation underscores how the composition of major stock indices can evolve and may not always align with popular perceptions of market influence or company leadership structures. The specific date of Nvidia's inclusion (November 1st, 2024) and its replacement of Intel is a key factual detail provided.