This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Why Apple Should Replace Cisco in the Dow

I have nothing against Cisco ( CSCO), the company or its products for that matter. I do have a problem with the stock still being a part of the Dow Jones Industrial Average, however.

It would be nice if the 30 stocks in the Dow were kept a little more current and reflective of today's economy. If that were the case, maybe the Dow would be a lot higher than 13,000 at the current time.

It is bad enough that Cisco is so widely held and talked about in the financial press so often, but does it have to continue to be representative of the state of our nation's economy? I suppose most money managers like me would like to see duds like Cisco and Alcoa remain in the Dow - it makes it easier for us to beat the index - but I would much rather see fresher, more vibrant companies represent us.

We don't send our mediocre golfers to the Ryder Cup. We don't send our average athletes to the Olympic Games. Why then can't we pick a better team to represent corporate America?

What is wrong with Cisco you say? This $90 billion dollar company helped take us from mainframe computers, to personal computers, to local area and wide area networks. Where is Kaypro? Where is Novell? I am not saying that Cisco's technology is obsolete, but it is obvious that it's best days are far back in the rear view mirror.

Let's just look at the returns that stock has delivered to its investors over the years:

Data from Best Stocks Now App

Over the last 10 years, the stock has underperformed the S&P 500. While the index was delivering average annual total returns of just 2.6% per year, Cisco was dishing out 1.1% average returns. This is like a turtle passing a snail on the highway.

Over the last five years, the stock has really helped out money managers trying to beat the Dow. Cisco has been going backwards by 8.2% per year, while the S&P 500 has been going in reverse by a much more palatable 1.9% per year.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $118.44 -2.36%
CSCO $28.36 -0.21%
FB $94.14 0.14%
GOOG $631.21 0.90%
TSLA $259.99 -2.31%

Markets

Chart of I:DJI
DOW 17,598.20 -91.66 -0.52%
S&P 500 2,098.04 -5.80 -0.28%
NASDAQ 5,115.3820 -12.8990 -0.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs