CHOOSE A BROKER	Search:      Quotes Full Search	FREE NEWSLETTERS

Email this Page From:  Please enter your full email address above. Send to Yourself?:  No Yes To:  You can use email addresses or Fool user names above. Use a space to separate multiple recipients. Subject:  Note:  Message:  Fool.com: The NOW 50 Index Second Quarter Report (Now 50 Index) July 5, 2000 (/FoolSite/BorderPages/boundary.htm"which economy?" But deeper, unless performance of the Nasdaq Composite can be equated as a measure of something larger, it is nothing more than an aggregate of the market performance of the 4600 companies listed on the Nasdaq. It is not a good proxy for technology, nor the U.S. economy, nor the global economy. Rather, it is only a measure of how Nasdaq companies performed in the market. Such a measure is why the granddaddy of indices, the Dow Jones Industrial Average, was formed 120 years ago. But the Dow still has some significant weaknesses: It has an outsized portion of companies that are not as relevant to global commerce or to investors; it is domestic in scope; and it is price weighted, meaning that each company has an equal effect on the index. Seriously, does Caterpillar (NYSE: CAT) -- a wonderful company to be sure -- really have so much power that it should be a critical measure of the economy? The S&P 500 is, in our opinion, a much better measure for the economy (but like all indices, it is a market beast, not an economic one). In fact, the S&P 500 or the Wilshire Total Market Index may be the best market-based proxies for the performance of the U.S. economy. The NOW 50 is too new for us to claim that mantle. But a review of S&P 500 companies shows that a large number of them are unrecognizable to the average investor, that they are once again entirely U.S.-based, and that the top 10 components make up 24.5% of the index weighting. Still, the 70% share of total U.S. public market capitalization held by the companies in the S&P 500 make it a powerful measure. The NOW 50, on the other hand, is focused on the most relevant businesses in the global market, regardless of domicile. For the past six months, the NOW 50 has shown a lower level of volatility than any of the above mentioned indices, with its high and low ranges varying by 15.9%, compared to 16.1% for the S&P 500, 17.3% for the Dow, and 39.2% for the Nasdaq. Given the level of doomsaying that has accompanied the recent swoon of companies in the Nasdaq and the perception of extreme volatility as a result, the relative stability of the NOW 50 comes as a pleasant surprise, as it does contain some highly speculative companies. The NOW 50 is reweighted quarterly, with the last readjustment occurring on June 15. For more details on the method used to weight the index, check out the article on the NOW 50 Index weighting and valuation. Below are the new weightings for each company: Updated 7/5/00#TickerCompanyMarket Cap (in Billions)Weighted Market Cap% of Index (new)% of Index (old)1BGENBIOGEN8.46316.9260.26%0.36%2ARMHYARM HOLDINGS9.58919.1780.29%0.35%3GMHHUGHES ELECT.14.25928.5180.43%0.51%4COSTCOSTCO14.82729.6540.45%0.69%5AMZNAMAZON.COM16.29232.5840.50%0.67%6NWSNEWS CORP.26.17152.3420.80%0.86%7GPSGAP STORES27.09654.1920.83%1.19%8AUDADP34.30068.6001.04%0.96%9SCHCHARLES SCHWAB41.58583.1701.27%1.21%10SLBSCHLUMBERGER41.82684.7511.27%1.26%11MCDMCDONALD'S42.92584.7511.29%1.31%12CWPCABLE & WIRELESS47.99189.8171.37%1.44%13DDDUPONT50.38792.2131.40%1.45%14ENEENRON52.15893.9841.43%1.39%15DCXDAIMLERCHRYSLER55.11796.9431.48%1.63%16MDTMEDTRONIC60.158101.9841.55%1.54%17PEPPEPSICO62.504104.3301.59%1.38%18AMGNAMGEN68.216110.0421.68%1.56%19AMATAPPLIED MAT.68.360110.1861.68%1.65%20UPSUPS71.544113.3701.73%1.65%21AXPAMER. EXPRESS74.143115.9691.77%1.55%22PGPROCTER & GAMBLE74.223116.0491.77%1.82%23SNESONY74.649116.4751.77%2.25%24YHOOYAHOO!75.877117.7131.79%1.92%25BRK.BBERK. HATHAWAY87.305129.1311.97%1.77%26HBCHSBC HOLDINGS101.400143.2262.18%2.07%27TWXTIME WARNER105.800147.6262.25%2.34%28TAT&T107.500149.3262.27%2.60%29HDHOME DEPOT117.700159.5262.43%2.50%30DELLDELL COMPUTER121.400163.2262.49%2.52%31JNJJOHNSON & JOHNSON126.000164.1462.50%2.29%32AOLAMERICA ONLINE126.400164.2262.50%2.52%33TXNTEXAS INSTRUMENTS131.700165.2862.52%2.46%34KOCOCA-COLA138.000166.5462.54%2.45%35SUNWSUN MICROSYSTEMS146.200168.1862.56%2.57%36 EMCEMC160.800171.1062.61%2.46%37MRKMERCK167.400172.4262.63%2.52%38PFEPFIZER181.400175.2262.67%2.51%39AIGAMER INTL GROUP190.000176.946 2.69%2.53%40LULUCENT195.400178.0262.71%2.75%41IBMIBM207.100180.3662.75%2.69%42CCITIGROUP218.900182.7262.78%2.64%43ORCLORACLE232.400185.4262.82%2.78%44WMTWAL-MART247.800188.5062.87%2.80%45NOKNOKIA268.800192.7062.93%2.79%46XOMEXXON MOBIL287.000196.7062.99%2.92%47MSFTMICROSOFT380.900215.1263.28%3.63%48INTCINTEL429.500224.8263.42%3.33%49CSCOCISCO467.100232.3663.54%3.45%50GEGENERAL ELECTRIC513.200241.5863.68%3.45% sum100%100% Here are some statistics about the NOW 50, calculated as of its most recent rebalance. High YTD: 2172.84 Low YTD: 1850.56 Range: 15.9% Total Market Cap: $6.57 trillion YTD Market Cap Change: +$310 billion Index Weight of Top 10 Holdings: 31.07% Top Performers: Enron +96.8%, Oracle +84.2%, Tex. Inst. +68.4% Worst Performers: Amazon -49.4%, Procter & Gamble -48.8%, AT&T -37.2% Mean Market Cap: $94.4 billion As always, we encourage you to post your opinions on the NOW 50 Index on our discussion board. The next update will be on September 15, 2000. We also have the potential to add a new company should the AOL/Time Warner merger be completed. This is scheduled to take place in November. As this date approaches, we will once again open up the floor to community nominations for the replacement company. The original NOW 50 was culled from 2700 nominations of 288 different companies. Fool on! Bill Mann, on behalf of the NOW 50 Trusty Trustees David Braze Matt Richey Ann Coleman David Gardner Brian Bauer Brian Graney Bill Mann Selena Maranjian Chris Rugaber				Enter Symbol(s):     Choose a Broker  Create a Portfolio

Home | Discussion Boards | Quotes & Data | Stock Research | FoolMart | My Portfolio | My Fool
News | Special Features | Investing Strategies | Retirement | Personal Finance | Fool's School | Help
Legal Information. ©1995-2000 The Motley Fool. All rights reserved.	Archives · Contact Us · Work at the Fool
USVAWeb005