How About That Dow

By Dian Vujovich

The DJIA closed Friday’s session at the nine-month high of 9370 or roughly 4800 points off its all time high reached in October 2007. That means to reach that high again, the average still needs to gain about another 50 percent. Who knows when that will happen but in the meantime, there’s money that has been made and could be, more to come.

I’ve been watching prices of DJIA stocks since early March and as the Virginia Slims cigarette commercial used to say, “You’ve come a long way, baby.” And we have, as Dow stocks aren’t nearly as cheap as they were on March 4.

Back then 20 bucks (sans commissions) could buy you one share of five stocks in the Dow 30: Alcoa (AA) was trading then at $6.11 per share; Bank of America (BAC) at $3.57; Citigroup (C), $1.17; General Electric (GE) at $6.29; and General Motors (GM) at $2.13.

After Friday’s close not a one of them were selling under a fin, kind of. Two of the five are no longer a part of the Dow Jones Industrial Average, Citigroup and General Motors. And of the three that still are, Alcoa (AA) ended the day at 13 bucks a share, Bank of America (BAC) at $16.42 and General Electric (GE) at $14.70.

Cisco Systems (CSCO) and Travelers Companies (TRV) replaced Citigroup and GM in the DJIA in June.

So what stocks, if any, are selling for $5 or less in that lineup now? None.

How about at $20 per share or less? Well, in March where there once were 12, there are now five. They include the already mentioned Alcoa, Bank of America and General Electric. Two have more than doubled in price and Bank of America more than quadrupled. Man, when there is money to be made on Wall Street, there is money to be made. For those, that is, who are willing to take the risk.

As for Citigroup and General Motors, they’re both still cheap. Citigroup (C) closed on Friday at $3.85 per share and General Motors, now called Motors Liquidation Corp. (MTLQQ.PK) at a little over 75 cents a share.

Don’t forget, no one has ever gone broke taking a profit.