Slashdot Mirror

← Back to Stories (view on slashdot.org)

Google to be Added to S&P 500 Index

Posted by ryuzaki0 on from the finally-arrived dept.

hrbrmstr writes "According to marketwatch.com, Google is being added to the S&P 500, replacing Burlington Resources Inc. While this has provided a short-term boost to the stock price, time will tell what the overall impact will be on this respected index and the institutions (i.e. mutual funds) that follow it."

6 of 148 comments (clear)

  1. Good News by gurutc · · Score: 3, Insightful

    for Google's corporate image. I wonder when Google makes the Dow Jones? Seems like how Google's stock goes is a big indicator of how the market goes.

    --
    Moderation in All Things... Especially Moderation - gurutc
    1. Re:Good News by stecoop · · Score: 4, Insightful

      This might seem to be good news on the surface but let's look into the ramification of this. First would you buy any stock with a P/E > 50? I believe it is foolish and very risky to do so. Now the problem is that I own almost all of my investments in S/P 500. Hmmm - I will be indirectly buying this stock I don't want because it is a component of the 500; thus, to mirror the index my Mutual funds will have to start picking up Google. Crap, now I beleive the 500 is a slighlty higher risk investment now with Google then before without it and it dons't seem to follow my investment goals.

  2. Is this really a good thing? by the_humeister · · Score: 4, Insightful

    The P/E and forward P/E of the S&P has been getting higher and higher every decade. This won't help. Sure they have to replace Burlington resources with something, but Google? Well, I guess they offset GM for the short term at least.

  3. Google is built on a foundation of sand right now by MikeRT · · Score: 4, Insightful

    Right now Google is built on an advertising model. They are just one decline in online advertising away from having everything fall out from under them. If they are going to stay a serious contender, they need to take the corporate search market very, very seriously and make it a key component of their product offerings.

    For all that can be said about them, Microsoft at least sells products as the foundation of their business. As long as people need a good (yes, XP is good for many users, this coming from a Mac fan) OS for their cheap PCs or an office suite, Microsoft has a strong position. Google, not so much. They may have the best search product, but they are dependent on online advertising, which can decline even if their engine reachs near sentient comprehension of what you really want to know.

  4. Re:It's 1999 all over again by Luscious868 · · Score: 3, Insightful
    This is a market which can turn upside down in a second.

    I would take it a step further. I would say it's a market that can, and will, turn upside down at some point. Google keeps expanding and, IMHO, keeps taking their eye off the prize. I'm increasingly having to go deeper and deeper into the search results to find the information I'm looking for and that doesn't bode well. That's exactly why I started using Google in the first place, to find what I was looking for and find it quickly. If some other search engine comes along that does it better, I'll switch in a heartbeat and I know I'm not alone. If I was, Google wouldn't be nearly as popular as it is now because almost every Windows user would stick with the MSN search that IE defaults to. I would argue that people don't use Google because it's Google, people use Google because it works. They are a website, not an OS, and unlike Microsoft people can and will change if somebody comes along that does it better.

  5. Sell low, buy high? by jackjumper · · Score: 4, Insightful

    According to this guy, this is a big problem with the S&P 500 index funds. When a company gets added, it's riding high. The company that gets bumped is low. So if you follow the S&P, you're selling low and buying high.