Financially Speaking Podcast

Sears Bucked from S&P

Published on August 31, 2012

“Sears Holdings, a founding member of the Standard & Poor's 500-stock index, is getting booted from the venerable benchmark—and its own stock is to blame.  Once America's most iconic retailer, Sears will lose its place in the market measure because its "public float," or the number of shares that are in the hands of public investors, has hovered below a key threshold, according to a release issued Wednesday by S&P Dow Jones Indices.

Getting knocked out of the index means mutual funds and ETFs that track the S&P 500—which together account for roughly $1.5 trillion in assets—will have to sell Sears shares. The decision was bad news for Sears stock, which tumbled $4.55, or 7.9% to $52.90 on Thursday.”

                                                                       The Wall Street Journal, August 31, 2012 by Chris Dietrich 


I remember about fifteen years ago, Wal-Mart replaced Sears as the largest retailer in the country.  Who would have thought twenty years ago that Sears would fall out of the S&P 500 index?  It makes me wonder where Wal-Mart will be in 20 years. 

Tags: long-term investing; holding on to losing stocks

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