Brief
History of Investment Standards
The Rail
Index
1884 - 1941
The transcontinental railroad was
completed in 1869, a year before John Rockefeller formed the
Standard Oil Company and ten years before Thomas Edison shined
his first light bulb. The railroads were the way to keep score
in the economy as well as the safest place to be until the
Great Depression.
Depression
Years
1930 - 1942
Henry Ford built his first car in
1896, a year after the feasibility of transmitting AC power
was demonstrated by Nikolai Tesla and George Westinghouse.
1896 was also the year that an unknown Charles Dow put
together his list of "Industrial" stocks. GE (successor to
Edison Electric) is the only one left from that group.
For the next 35 years, "new
technologies," such as cars, airplanes and radios fascinated
the bold. However, these technologies were considered too
risky for widows and orphans who preferred the security of
railroad shares and bonds.
Dow Jones
Industrial Average
1942 - 1999
After the Depression years and
the coming of World War II, the railroads, which had first
been nationalized during World War I, became a shadow of their
former selves as industrial companies like General Motors, US
Steel and the Standard Oil spin-offs zoomed by to take center
stage in the investment heavens.
For most of the last
60 years, with the exception of the oil crises of the 1970s,
the industrial average was the place to be. But nothing lasts
forever, and the industrial average is destined to go the way
of the once mighty rails, which can be faintly recognized
today as part of the Dow Transport list.
The Light
Index
2000 - 2057
INFORMATION IS
NOW THE MOST IMPORTANT COMMODITY IN THE WORLD. In 1974 oil was. For this reason, $35 for a barrel of
oil no longer causes the world to shudder. Y2K, the fear of an
information flow cut-off at the end of 1999, seemed much more
threatening, even though everything worked out fine.
The time has come to measure the new economy in terms
of those companies that are building the new worldwide
economic infrastructure. The best way to do that is by using a
proven collection of profitable companies that are at the
heart of the information age. That collection is known as the
Light Index.
Performance
| |
|
2005 |
2004 |
2003 |
2002 |
2001 |
2000 |
1999 |
1998 |
1997 |
1996 |
1995 |
Inception |
| Light
Index |
7.66 |
8.26 |
47.5 |
(35.1) |
(18.7) |
(28.9) |
137.1 |
60.7 |
24.7 |
16.5 |
42.6 |
486 |
| Dow Industrials |
-0.61 |
3.15 |
25.3 |
(16.7) |
(7.1) |
(6.1) |
25.2 |
16.1 |
22.6 |
26.0 |
33.4 |
165 |
| S&P
500 |
3.00 |
8.99 |
26.3 |
(23.3) |
(13.0) |
(10.1) |
19.5 |
26.7 |
31.0 |
20.2 |
34.2 |
167 |
| Nasdaq |
1.37 |
8.59 |
50.0 |
(31.5) |
(21.0) |
(39.9) |
85.5 |
39.6 |
21.6 |
22.7 |
39.9 |
183
|
| Lipper
Index |
6.05 |
4.11 |
51.3 |
(41.3) |
(34.7) |
(30.2) |
113.9 |
46.8 |
7.7 |
16.8 |
34.7 |
112 |
Model results do not reflect the deduction of
any applicable fees, commissions, or other expenses that an
individual may have incurred. Model does not portray or
reflect the reinvestment of dividends or other earnings. The
volatility of the Model may not materially reflect the
volatility of any individual portfolio. Model contains equity
securities of large capitalization high technology companies
that are managed with a view towards capital appreciation.
Model results do not represent actual trading and may not
reflect the impact that material economic and market factors
might have had on the management of any individual portfolio.
Past performance is no guarantee of future results.
Light
Index
The Light Index is divided into 3
parts: Hardware, Software & Telecom
The Hardware component is made up of
Integrated Circuits, Computer Hardware & Electronics,
and Imaging & Graphics.
Integrated Circuits
Analog Devices
Applied Materials
Intel
KLA-Tencor
Maxim Integrated Products
Microchip Technology
Texas Instruments
Xilinx
Computer Hardware
& Electronics
Apple
Dell
IBM
Philips Electronics
Seagate Technology
Imaging
& Graphics
AU
Optronics
Canon
Fuji Film
Lexmark
SanDisk
The
Software component is made up
of Software, Media & Entertainment, and Electronic
Commerce.
Software
Adobe Systems
AutoDesk
Infosys
Intuit
Microsoft
SAP
Symantec
Wipro
Electronic Commerce
Bank of New York
Fiserve
InterActiveCorp
ICICI Bank
NYMEX Holdings
VeriSign
Wells Fargo
Western Union
Media & Entertainment
DirecTV
Disney
Electronic Arts
Sony
The Telecom component
is made up of Telecom, Wireless, and Internet.
Telecom
BT Group
Comcast
Corning
Telefonica SA
Telmex
Verizon
Wireless
American Movil
China Mobile Ltd
Ericsson
Garmin
Nokia
Qualcomm
Research in Motion
Internet
Amazon
Cisco Systems
eBay
EMC Corp.
Google
Yahoo
"With only 600 million people online out of a world
population of six billion, the Internet is less than 10% of
the way to completion. This is where the automobile was in
America early in the 20th century when Henry Ford rolled out
his first Model T and the Dow was still a newcomer."
HENRY HEWITT
PRESIDENT, LIGHT INDEX
INVESTMENT
CO | |
