In less than two weeks, on May 26, Wall Street will have to break out the birthday candles (126 of them!) for the iconic Dow Jones Industrial Average (DJINDICES: ^DJI). What began as a 12-company index that was concentrated in industrial stocks in 1896 has evolved into a 30-component index featuring some of the most profitable and time-tested companies on the planet.
Admittedly, the Dow isn’t perfect. It’s a share-price weighted index, which means market cap is irrelevant. This allows insurer Travelers Cos., with a $41 billion market cap but a $172 share price, to exert more influence on the index than the largest publicly traded company (Apple, which sports a $2.46 trillion market cap but “only” a $152 share price).