Here's one you hear all the time:
Over the last 115 years the Dow has substantially out performed gold.
The truth: over the last 115 years, all but 2 Dow companies extant in 1900 have gone BANKRUPT or been bought out. Of the 8 the went bankrupt that means their price has gone to ZERO. The 4 bought out companies are worth something now as tiny components of conglomerates. You figure out their value. GE still exists.
During the same period gold has moved from $20 and ounce to $1650 an ounce.
Which has performed better?
Dow Components in 1900:
- American Cotton Oil Company, a predecessor company to Bestfoods, now part of Unilever.
- American Sugar Company, became Domino Sugar in 1900, now Domino Foods, Inc.
- American Tobacco Company, broken up in a 1911 antitrust action.
- Chicago Gas Company, bought by Peoples Gas Light in 1897, now an operating subsidiary of Integrys Energy Group.
- Distilling & Cattle Feeding Company, now Millennium Chemicals, formerly a division of LyondellBasell, the latter of which recently emerged from Chapter 11 bankruptcy.
- Laclede Gas Company, still in operation as the Laclede Group, Inc., removed from the Dow Jones Industrial Average in 1901.
- National Lead Company, now NL Industries, removed from the Dow Jones Industrial Average in 1916.
- North American Company, an electric utility holding company, broken up by the U.S. Securities and Exchange Commission (SEC) in 1946.
- Tennessee Coal, Iron and Railroad Company in Birmingham, Alabama, bought by U.S. Steel in 1907; U.S. Steel was removed from the Dow Jones Industrial Average in 1991.
- U.S. Leather Company, dissolved in 1952.
- United States Rubber Company, changed its name to Uniroyal in 1961, merged with private B.F. Goodrich in 1986, bought by Michelin in 1990.
- GENRAL ELECTRIC COMPANY