Birinyi: New Dow Companies?

Includes: AA, BAC, CB, GE, GM, JPM, NEM, SLB, V
by: Tyler Durden

Another great idea from Laszlo Birinyi who wants to get rid of all the companies that people were clamoring to have added into the Dow at the last rotation. Laszlo is all about removing Bank Of Countrywide Lynch (NYSE:BAC), GE (NYSE:GE), Alcoa (NYSE:AA) and General Motors (NYSE:GM) and adding the companies that have not been hammered (yet) such as Chubb (NYSE:CBB), Visa (NYSE:V), Newmont (NYSE:NEM), and Schlumberger (NYSE:SLB).

Of course, in two years when these four (and who knows how many others) get to the point where Citi's whopping 20% move only budged 5 points in the DJ50, Laszlo will pull some other big cap companies to replace those. Even better, we should just have a weekly rotation in the Dow so that any company that falls below $50 billion in mkt cap should immediately get thrown into the S&P500 microcap index as punishment.

In the meantime, the most "shocking (per CNBC)" headline is that JP Morgan (NYSE:JPM), just like Citi, was also profitable in the past two months. It is good, if a little surprising, to know that both these banks account for their otherwise once-a-quarter-evaluated massive books of Level 2 and Level 3 assets on a daily basis. This kind of instantaneous reporting is phenomenal: we should do away with 10Qs and 10Ks altogether and public companies should just make their general ledger public at market close every day. How about that for added transparency?

Also, for all those who did not read Press Releases, (most notably CNBC) this is not news! JPM announced just this when it cut its dividend on February 23, at which point it said it was profitable for the quarter. It would be amazing for the bank to lose money in the past 14 ultra volatile days.