The Half-Baked Answer to the $400 Billion Question

Just about a month ago, I asked why Apple was still not included in the Dow, given that it was now the most valuable company in the world.

Today, my friend blbl sent me the answer, provided by Bloomberg: the stock price is just too high for a price weighted old school index such as the Dow:

Apple’s Stock Price Is Too High for Inclusion in Dow Average
Sept. 20 (Bloomberg) -- Putting Apple Inc. in the Dow Jones Industrial Average would mean the benchmark gauge would get 22 percent of its value from the iPhone maker, too much influence even for the world’s largest company, according to Bespoke Investment Group LLC. 
Apple, trading at about $420, would have the largest weighting in the 30-company measure because Dow companies are ranked by stock price, not market value. Replacing Kraft Foods Inc. with the Cupertino, California-based company would drive International Business Machines Corp. down to 9.2 percent from 11.6 percent of the Dow, Bespoke said in a report today. 
IBM closed at $173.13 yesterday. “Don’t hold your breath,” Bespoke, based in Harrison, New York, wrote in a note to clients, citing speculation today that Apple may enter the Dow. “If the stock were added to the index without a split in the shares, it would have a disproportionate weight in the index, making it more like the Dow Jones Industrial Apple.” Richard Silverman, a spokesman for Dow Jones Indexes, declined to comment. 
Apple had its weighting in another benchmark measure, the Nasdaq-100 Index, reduced this year. Nasdaq OMX Group Inc. cut the company’s share of the Nasdaq-100 Index to about 12.33 percent from 20.49 percent. While the exchange imposed rules in 1998 preventing the biggest corporations in the index from having too much sway, Apple’s market capitalization was too small to qualify for a curb at the time. 
Shares of Apple jumped 91-fold between 1997, when the San Francisco Chronicle said Steve Jobs would be appointed interim chief executive officer, and his resignation in August. The company’s market value has surged to about $384 billion.
I'm not fully satisfied with this answer, but I'll let you make your own opinion about it.

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