Charles Dow stock has changed America, and the financial world more than any well-known banker and financier. He could not play the market, and did not want to do it. But now, no one day in the financial market is complete without mentioning his name.

Financial reporter
Charles Dow was born on November 6, 1851. His father died when the boy was only six, and from then on it went to most of the responsibilities of the household. However, his interests are not limited to the parent farm, and it is quite early to leave his house. Despite the fact that he lacked the funds for higher education, he grew very well-read and intelligent. In the 18 years he managed to get a newspaper reporter in Springfield Daily Republican. Although it was the lowest position in the provincial newspaper, the Dow was happy. Here he worked until 1875, then went to the other newspapers - The Providence Star. She was even less, but there Charles took the better-paid position editor of the evening production. In his new post in the new newspaper, Charles became involved in a wide range of issues. The work he liked, he was appreciated. He has written several stories about the search for gold and silver in Colorado in 1877. I actually opened the way for a new genre - of financial journalism. Shortly thereafter, he realized that doing it not only interesting but also beneficial.

However, he was already close to the provincial newspaper. And the Dow, along with his friend and colleague, Edward Jones in 1880 set off to conquer New York. Here they settled in the news agency Kiernan News Agency, which distributes handwritten news among banks and brokerage firms. And the Dow, already a recognized authority in his field, he began to write reports on the behavior of the prices of gold shares.
In the agency, Charles and Edward worked for almost three years. Undermining of money, in November 1882 decided to found their own businesses. Established company called Dow Jones & Co. Office is located at Wall Street, 15 - the door next to the entrance to the New York Stock Exchange. The product became the company's newly-made newsletter Customer `s Afternoon Letter. Initially, the circulation did not reach hundreds of copies. This is partly explained by the fact that friends have written it by hand. The first edition, sold for two cents and was released in early 1883, few people noticed, but between those on Wall Street there was a revolution.

Customer `s Afternoon Letter
Customer `s Afternoon Letter in the first place was a summary table of traded stocks with their current price and the price change per day. Such information in New York at that time did not exist. Of course, the brokerage firm for internal use such schedules, but the Customer `s Afternoon Letter for the first time offered to all comers, moreover, on a daily basis. In addition to tables in the newspaper printed accounts of companies. At the end of the XIX century it was, without exaggeration, insider information. Companies were afraid to show the work and its actual value, fearing a hostile takeover. And legislation requiring them to disclose this information did not yet exist. Only in 1934, according to the law on securities companies are required to regularly publish its quarterly and annual reporting. Prior to that, almost 50 years of Customer `s Afternoon Letter (later - The Wall Street Journal) remained the only source of such information. Dow Jones and with the help of his newspaper erased the gap between insiders and ordinary players, making information accessible to all bidders.
The first time Charles, and Edward themselves running on Wall Street, extort information from traders and eavesdropping their conversation. Then for this work, Dow Jones & Co has hired specifically for boys. However, all those who worked for the Dow, were obliged to bear the financial news. Most sensational was extracted exactly eavesdropping. Later secret information, the newspaper began to trust and rogues - a public statement they could move the stock price in the right direction for themselves.
The company grew. Even hired people to spread the special subscription. The total number of staff to 50 people. By mid-1889 Customer `s Afternoon Letter stouter and changed its name to a more respectable - The Wall Street Journal. By the beginning of XX century, its circulation reached 7 thousand copies. Established Doe media empire is now thriving. In Dow Jones & Co includes not only printed publications and indexes, and electronic publications. Profits up in 2002 reached $ 200 million, and its capitalization reached $ 4.7 billion in the company's staff includes more than 8 thousand people, and the number of subscribers is about 2 million people worldwide.

The average market
However, the publication quotes and other financial information, the Dow was not enough. Charles I matured the idea that the reading of his table, which included increasing the number of shares can not visualize the reader to the direction and strength of the market, not to mention some of its sectors. So the idea of bringing the stock prices to the average - an index of the stock market. First the Dow was published in the Customer `s Afternoon Letter 3 July 1884. It included the 11 most liquid shares. Most of them are represented by securities of railroad companies, as they were then very hot commodity on the Stock Exchange and with the shares of railway companies performed the greatest number of speculations. Each share was appropriated by an equal weight, and the index is calculated on the basis of the percentage change in stock price without regard to capitalization. This first index helps to determine the main direction of the market, but the Dow did not stop there. In 1896, in The Wall Street Journal was already two indexes: Dow Jones Railroad Average and the Dow Jones Industrial Average. Subsequently, after the death of Doe, appeared and Dow Jones Utility Index (1929).
In the Dow Jones Railroad Average consisted of 20 shares of railway companies. Later, with the weakening of the boom construction of railways and the development of other modes of transport, it was renamed the Dow Jones Transportation Index. However, he was for many years the financial indicator of U.S. stock market. This proportion fell to the Dow Jones Industrial Average. Originally it consisted of 12 companies with business, other than the railway. By 1916, the index has grown to 20 companies, and in 1928 - before the final mark in 30 companies. And yet, despite the emergence of a number of other indexes, Dow Jones Industrial Average remains one of the most popular indicators, which are oriented investors, not only U.S. but also around the world. At the time of the Dow has assigned it a value of 100 points. Only in 1966, his brainchild broke 1000 points mark, but since 1982 the index below it has never fallen. In early 2000, Dow Jones Industrial Average reached its highest mark in 11 750 points.
However, the venerable age of the index is not only respected, but also criticism. Many traders are now wondering why the main indicator of the stock of America is on the principles of a hundred years ago. Thus, when calculating the index does not take into account the capitalization of the company and its weight is assumed to be the rest. Therefore, changing the value of shares of the largest companies is equivalent to a similar percentage of change in the value of the smallest, although the first change leads to significantly greater inflow of funds. Furthermore, criticizing and composition of the index. In XX century, 30 companies fully reflect the full picture of the economy, but now the situation has clearly changed. More modern codes take into account the weight of companies, and their composition is based on a broader representation of companies - often 100, 500 and even more.

Renewed theory
Charles Dow died in 1902. However, its impact on the stock market remained even after death. Attentive readers will withdraw from the indexes and publications Dow theory, and which was named in his honor. It was first presented in 1902 in the book  "The ABC of Stock Speculation" by  Nelson S.A.. Dow himself never wrote about himself and those no longer publishing books. Nelson, in his book recognizes the Dow as much as the great intellectual power of Wall Street, and presents the Dow theory.
It is unknown whether the suspect himself Charles prognostic properties of their indexes, but Niel son found them. A theory on the assumption that the success of the railways is closely linked with the state of the industry. That is, the more goods produced, the more profit to carriers, and vice versa. Thus, the movement of both indexes, Dow Jones Railroad Average and the Dow Jones Industrial Average, in one direction and the intersection of their maximum or minimum with high probability indicates the existence of a strong trend in this direction. Further developed the theory of Benjamin Graham, introducing a five per cent corridor to assess the outbreak of the trend. Of course, now that the Dow theory, the situation is difficult to use. In the modern Dow Jones Transportation Index includes many companies that engage in commercial tourism, not involving the transport of goods. And in the Dow Jones Industrial Average includes companies whose products do not require transportation.

But there is another position the Dow theory, which allows to conduct a technical analysis rather than fundamental. It states that there are three types of market movement. The main trend lasts for several years and can be as "bullish" and "bearish". Movement of the second order last from several weeks to several months and may be the underlying trend in the opposite direction. Movement of the third order are oscillations with a period of several days. Very similar to the later theory of cycles. This part of the Dow theory was taken from his own editorial column. In it, Charles is sometimes described his observations of the market, but he did not see in this any laws. Moreover, Charles Dow was a supporter of fundamental analysis, assuming that the stock price is determined by the performance of the company. However, at the time the Dow was not even a technical analysis in its full form, and only started to develop fundamental. So both of the theory can be considered unique - and no matter how they are useful right now.
                                                                                                                  

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