Question

1. Explain the difference between the Dow Jones Industrial Average index, NASDAQ, and S&P 500 index. What is the current price for each and how has each changed since the start of the class? What is the current stock price of Google and Chipotle, and would you consider investing in either company? Why or why not?

Answer 1

The differences can be seen in the table below:

Sl. no.	Parameter	Dow Jones Industrial Average	NASDAQ	S&P500
1.	Popularity	Most famous, most exclusive	Composite	Reliable gauge of entire US economy
2.	Number of stocks included	30	All listed companies; > 3,300 stocks	500
3.	Nature of stocks included	Largest, richest and most actively traded	Broad based, included all stock listed on Nasdaq stock exchange, however it has concentration of technology stocks	Stocks from all sector listed on NSE or Nasdaq, broad based
4.	Sector exclusion	Utilities and transportation	None	None
5.	Indicator of	how large / blue chip stocks are performing	How economy is performing in general? (Little sensitive to technology sector though)	Broader indicator of US equity markets

What is the current price for each and how has each changed since the start of the class?

DJIA - 27,192

Nasdaq composite - 8,330

S&P 500 - 3,026

Each one of them have moved progressively since inception. They have taken many leaps and bounds since they had been created. S&P 500 has moved from the range of 750 at the time of inception to its current value of 3,026 amidst volatility.

DJIA has moved from some 800 levels to its current level historically. It has seen its own share of volatility on its way.

Nasdaq composite has started journey with the level of 140 to reach its current level of 8,330.

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What is the current stock price of Google and Chipotle, and would you consider investing in either company? Why or why not?

Google - $ 1,245 per share

Chipotle - $ 780 / share

I would consider investing in Google.

I have been following this company since some time and have seen it's journey. I believe the company is going to maintain its near monopoly situation in search engine. It's cloud computing platform too has tremendous potential. It's growth journey is intact and it invests into research and technology. Over a period of time it has diversified its revenue base and business segment and is no longer seen as just a search engine. The fundamentals are good, and revenue base has been expanding. The margins are stable and intact. They have a strong management team in place.