In this episode, we discussed the concept of an index.  Regardless if it's the Dow Jones Industrial Average (“DJIA”), S&P 500, or the Nasdaq, they all serve the same function: to track a portion of the stock market.  Dan and Tim briefly introduced the history of indices: who created them, who is operating them, and why we have them.  Nathaniel added, like anything else, it's important to understand the companies’ incentives that manage these indices for you: they are not doing a public service to offer some performance comparison; they are businesses.  The companies that own their respective indices are making money off of them.  Tim explained the eight criteria for a company to be included in or excluded from the S&P 500 index - some of them turned out to be very subjective.  Nathaniel gave some examples for some recent changes in the DJIA: Salesforce got selected mainly because its stock price at the time fit a specific gap that was created by Apple's stock split.  As for Telsa's recent failed attempt to make it into the S&P 500, it was because their cash flow includes tax credits that they got from the government and then sold to other auto companies.  It doesn't truly reflect their earning ability.  The trio talked about how inclusion or extraction in an index impacts a company.  And as always, understand what you buy, and be rational.