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With today's decline of 8.2%, shares of Cisco (CSCO) are now down 13% since being added to the Dow Jones Industrial Average (DJIA) back in June 2009.  The only other stocks in the index that have dropped more than CSCO since it was added to the Dow are HPQ (-38%), BAC (-35%), and AA (-15%).

Back when CSCO was added to the Dow, there were more than a few investors who were advocating that Apple (AAPL) should have been added instead.  Given that General Motors was the name being taken out of the index, the argument was that just as there was once a GM car in practically every American driveway, there was now an Apple device (and often more than just one) in most American households.

In the chart below, we have reconstructed where the DJIA would be today if AAPL had been added back in June 2009 rather than CSCO (redline) and overlaid it on a chart of the actual DJIA with CSCO included (blue line).  If AAPL had been added, the index would now be considerably higher, trading at a level of 15,459.  This represents a 20% premium to where the index is currently trading today.  Furthermore, instead of still being more than 9% below the index's all-time high of 14,198.1, the DJIA would have surpassed that level back in January and would now be 9% above those prior records.  

Now obviously we cannot rewrite history and put AAPL in the DJIA retroactively.  Additionally, if the stock was in the index, because of its high share price (the DJIA is weighted by stock price as opposed to market cap), it would have a weight of close to 25%, which would cause its own set of problems.  That being said, imagine how different investor sentiment would be today if the DJIA was at record highs?

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