Another Ratio is the price of Oil to either an ounce of Gold or an ounce of silver. There are ratios for almost everything you can think of. As a rather non-wealthy investor and not having any liking to stocks and bonds and other "beast system" paper trail imaginary investments, I have never bought a stock, I have however always, since I can remember followed the market. As an adult and as a Christian I am more convinced biblically and through conviction that I could never waste my money in the gamble that is called the stock market today. That being said, and having a confidence in those real things that have been created by my saviour the Lord Jesus and having no confidence in ANYTHING that has had it's origin in the mind and imagination of a fallen race, I present for you here the comparison between the world of the DOW and the Gold and Silver of God.
According to investopedea:
"3. If a stock is up two points, then it really means that the stock is up $2. Don't confuse points with percentages when talking about stocks. If a $5 stock rises by $2, it has risen two points. Similarly, if a $50 stock rises by $2, it has also risen two points, although the two-point increase is a much greater percentage change for the $5 stock than for the $50 stock." The points in relationship the DOW are similar but are not ONE TO ONE, but for the sake of understanding this thy might as well be.
One more point to ponder.
Unlike Gold and Silver and most other commodities, THE DOW, being a construct of man and a means of expropriation, can be and is often changed to give the illusion of constant growth. For example, if you had invested in the DOW companies in 1896 when this index was started, you would be looking at 12 companies, which according to WIKIPEDIA only general Electric remains, and a few of which simply do not exist.
When the did their figuring, they basically averaged them out.
As time went on companies died, others merged and some were simply dropped in favour of companies and industries that were performing well. This along with some creative figuring gives the illusion that the stock market, as one broker told me, Always goes up over time, when in fact, against real goods in many cases, it is just the opposite. (yes there are exceptions). The system is built to keep you "trading" or loose everything. The tax system is set up to skim as much as possible, and the fees and other expenses are not figured in when dealing with most of their charts and claims.
Here is a list of the ORIGINAL companies in the DOW... and WHAT happened to them:
American Cotton Oil Company, distant ancestor of Bestfoods, now part of Unilever
American Sugar Company, now Amstar Holdings
American Tobacco Company, broken up in 1911 antitrust action
Chicago Gas Company, bought by Peoples Gas Light in 1897 (now an operating subsidiary of Integrys Energy Group, Inc.)
Distilling & Cattle Feeding Company, now Millennium Chemicals, a division of
Lyondell Chemical Company
Laclede Gas Light Company, still in operation as The Laclede Group, removed from the Dow Jones Industrial Average in 1899
National Lead Company, now NL Industries, removed from the Dow Jones Industrial Average in 1916
North American Company, (Edison) electric company broken up in the 1940s
Tennessee Coal, Iron and Railroad Company in Birmingham, Alabama, bought by U.S. Steel in 1907
U.S. Leather Company, dissolved 1952
United States Rubber Company, changed its name to Uniroyal in 1961, merged private with B.F. Goodrich in 1986, bought by Michelin in 1990
NOT only are ALL of these companies NOT on the DOW ( except for GE) some no longer exist. ( Remember you MUST KEEP TRADING and then convert to cash to have anything)There are 30 Companies on the DOW list now but the switching to maintain increase continues, for example:
According to WIKIPEDIA:
The individual components of the DJIA are occasionally changed as market conditions warrant. They are selected by the editors of The Wall Street Journal. When companies are replaced, the scale factor used to calculate the index is also adjusted so that the value of the average is not directly affected by the change.
On November 1, 1999, Chevron, Goodyear Tire and Rubber Company, Sears Roebuck, and Union Carbide were removed from the DJIA and replaced by Intel, Microsoft, Home Depot, and SBC Communications. Intel and Microsoft became the first two companies traded on the NASDAQ exchange to be listed in the DJIA. On April 8, 2004, another change occurred as International Paper, AT&T, and Eastman Kodak were replaced with Pfizer, Verizon, and AIG. On December 1, 2005 AT&T's original T symbol returned to the DJIA as a result of the SBC Communications and AT&T merger.
Going back 10 years as a bench mark the DOW closed on January 30 1998 at 7,906.5
Gold on the same day closed at 304.85, In other words regardless of the companies in the DOW, the price of an ounce of GOLD was 25.93 ounces of GOLD to AVERAGED Value of the DOW.
Today the DOW closed at 12,159 with GOLD being $888.25 per ounce. The ratio is not only 13.68 to one but the purchasing power of GOLD as compared to STOCKS in the DOW has increased almost 2 fold.
Silver went from 1309 ounces of Silver needed to equal the DOW average for the same day, to only 765 ounces needed today to equal the Dow's close today.
Now granted there were no dividends payed on Silver or Gold if purchased and held onto, but then again there were no taxes paid or commissions or brokerage account fees paid either. In other words, all things being equal ( if that is possible in the land of Wall Street, the average man would have been much better off today, on almost all accounts had he converted his paper money into Gold and Silver since the fall of the The Gold and Silver Standard in 1964. And especially in the last ten years.
