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Dow Jones Breaks 12,000
October 18, 2006








The L.A. Times is running an article entitled, "Dow Breaks Through 12,000 Barrier." The article states:

"Investors' relief over oil's decline from a high of $78.40 has given Wall Street an unusually strong
October; some of the market's worst days, including the 1929 and 1987 crashes, have been in October.
And it was on Oct. 9, 2002, in the depths of the bear market, that the major indexes fell to their lowest
levels in five and six years -- the Dow closed that day at 7,286.27."

To be honest, I was a little confused as to the exact definition of the Dow Jones Industrial Average, so
I did what any good citizen of the Internet age would do, I looked it up on Google. Investorwords.com
defines the Dow Jones Industrial Average this way: "Simply put, the editors at WSJ add up the prices
of all the stocks and then divide by the number of stocks in the index. (In actuality, the divisor is much
higher today in order to account for stock splits that have occurred in the past.)"

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Discussion Starters

  • Ask your students to define the word
    "ownership" in a quick-blog. Then ask them
    if it's possible for people to share ownership
    in something. Encourage them to explain
    their answers. Now ask students if it's
    possible for thousands of people who don't
    even know each other to own something
    together. If appropriate, tell your students
    that they have been asked to devise a way in
    which lots of people who don't know each
    other can own something together. Allow
    them to work in groups to devise this
    ownership system. (You might even
    encourage them to develop wikis to
    document their ideas.) At the conclusion of
    this activity, tell students what the word
    stock means.

  • Ask students to define the word "value" in a
    quick blog. Ask them how the value of
    something is determined. In groups ask them
    to make a list of the characteristics of
    something that give it its value. Ask students
    if a piece of paper has value. Ask if a
    company has value. Urge students to support
    their ideas thoughtfully.

  • Ask students if they think that people have
    value? What determines a person's value? Do
    people's skills have value? What determines
    the value of their skills? Can people be
    bought and sold? Can their skills be bought
    and sold? Ask students if they think that
    these questions are even appropriate to
    consider. Encourage them to explain their
    opinions.

  • Most students won't know what the Dow
    Jones Industrial Average is. Pose the
    following question to them: Is the Dow
    Jones Industrial Average a useful measure
    for determining the strength of the American
    economy. In order to answer this question,
    students will obviously have to first
    investigate the definition of this statistic.
    They will also have to consider how you
    could effectively measure the strength of the
    American economy. Another option might be
    to have students develop news segments,
    which could be vodcast, explaining the role
    that the Dow Jones Industrial Average plays
    in American economics. You could ask them
    to offer their opinions as to whether this is
    an appropriate role.



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(C) 2007, Andrew Pass Educational Services, LLC.