Not everyone is a fan of the Dow's new changes, and that includes Bill Smead, CEO of Smead Capital Management [profile], who says it brings attention to the Dow's "absurd popularity chasing nature," writes Barron's Brendan Conway.

Smead says Dow portfolio managers "must resist the temptation to purchase popular securities," Conway writes.

Conway further quotes Smead's blog post as reading, "The keepers of the DJIA have made numerous moves toward popularity in the last 16 years. Pfizer was a popular drug stock in the aftermath of Viagra in 2004, while Kodak was a declining business headed for bankruptcy…The index bailed out on AIG within six months of the bottom of the financial meltdown in 2008."

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Edited by: Casey Quinlan


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