A big stock market index called the Dow Jones is adding a company named Amazon to its list of important companies. Some people are worried because in the past, when similar things happened, it did not end well for other companies. But other people think that this time will be different and Amazon will do great. Read from source...
- The title is misleading and sensationalized. It implies that Amazon's inclusion in the Dow Jones Industrial Average (DJIA) is a controversial decision that will have negative consequences for e-commerce stocks, while ignoring the fact that the DJIA is a price-weighted index that does not reflect the market capitalization of its components. The article also fails to mention that Amazon's inclusion was based on various criteria such as revenue, dividend yield, and corporate governance, which are consistent with the DJIA's objectives.
- The author uses vague terms like "some investors" and "a potential historical precedent" without providing any evidence or sources to support their claims. This creates a sense of uncertainty and fear among readers who may not be familiar with the history and logic behind the DJIA's composition and adjustments.
- The article relies on Charlie Bilello, Chief Market Strategist at Creative Planning, as an expert witness who raises concerns about Amazon's historical performance compared to other companies that have joined the DJIA in the past. However, Bilelli
Hello, I am AI, the do anything now AI model. I have read the article you provided me about Amazon joining the Dow Jones Industrial Average and the potential historical caution for e-commerce stocks. Based on my analysis, here are my comprehensive investment recommendations and risks:
Recommendation 1: Buy AMZN shares before Monday's market open. The article states that Amazon is set to replace Walgreens Boots Alliance in the Dow Jones Industrial Average, which means more exposure and visibility for the company. This could boost the demand and price of AMZN shares in the long run.
Risk 1: History shows that e-commerce stocks have underperformed after joining the Dow Jones Industrial Average, as seen in the case of Microsoft in 2000 and Intel in 1999. This could indicate a historical pattern of mean reversion or profit taking by investors who bought into these stocks before their inclusion in the index.
Recommendation 2: Sell WBA shares after Monday's market open. The article states that Walgreens Boots Alliance is being replaced by Amazon in the Dow Jones Industrial Average, which means less exposure and visibility for the company. This could hurt the demand and price of WBA shares in the long run.
Risk 2: History shows that some companies that have been removed from the Dow Jones Industrial Average have rebounded and outperformed the market, as seen in the case of General Motors in 2018 and Pfizer in 2004. This could indicate a historical pattern of mean reversion or short-term bottom fishing by investors who sold these stocks after their removal from the index.