Maybe This Is Why Dow Jones Uses Averages

June 5, 2002
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GRAND RAPIDS — Probably all the reporters who covered Wall Street’s stock market crash of 1929 are gone now, as are their readers and the investors who lost millions that day.

But one of Black Friday’s most memorable moments came when a crowd of reporters with notepads and pencils (no microphones or ballpoint pens back then) mobbed Mr. Wall Street himself — J. Pierpont Morgan Jr. — as he was entering his bank.

With the financial and industrial world collapsing around him, they harassed him in 50 voices and 40 different ways with, “Hey, Mr. Morgan, what do you think about the stock market?”

He fixed one reporter with a steely glare and said, “It fluctuates.” Then he pressed through the crowd, went into his bank and probably locked himself in his office to take a headache powder (no aspirin tablets back then).

The media, comprised then as now of people who just cannot let a two-word sentence lie, never have gotten over it. Thus we hear so-called Wall Street reporters today trying to say in 60 seconds and 120 words what J.P. (Jack to friends) said in one second with two.

Whether on NPR or CNN, alleged Wall Street reporters yammer about “investor uncertainty” or “investor fears” or “investor confidence” as if several million individual stockholders — not to mention institutions, multinationals, pension funds — were a single-minded school of herring moving in ballet-like unison.

In fact, on any given day, millions of investors do nothing at all but go about their lives while riding the ebb and flow of the tide.

And even using the word "tide" is a misplaced, because while some stocks rise, others fall and yet others hang.

Illustrating exactly that are the Business Journal’s own weekly stock summaries which, over 12 months, have undergone a thorough shuffle in value leaders and followers.

For instance, a year ago, Mercantile Bank was in 15th place on the Journal’s list of 19 stocks ranked by percentage of change over the previous 12 months.

This week, with Mercantile’s stock increasing 51.4 percent in value over the year, the Grand Rapids-based financial institution was in first place.

Meanwhile, Alternate Marketing Networks, in first place last year, was 19th last week, after a 53.4 percent plunge in price value.

And so it goes. Perrigo was 12th, now is second, whereas SPX, then second, as of last week had dropped 10.4 percent to 13th place.

X-Rite, in third place in March 2000, has lost 16.2 percent to place 16th.

Meanwhile, Universal Forest Products has gone from 18th last year to fourth last week.

Macatawa has been almost unaffected, moving from ninth to 10th place, while gaining 8.4 percent in doing so. Likewise, Donnelly has gone from 11th to ninth, while picking up 11.4 percent.

Also climbing were Old Kent (16th to sixth, plus 22.1 percent) and Wolverine (eighth to fifth, up 22.3%).

Skidding were Gentex (fifth to 17th), Knape & Vogt (seventh to 12th), Herman Miller (fifth to 11th) and Finishmaster (fourth to 14th).

Incidentally, within a few months of the 1929 collapse, the New York Stock Exchange's averages had recovered and surpassed their pre-Black Friday peak.

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