Beating The Dow Revised Edition: A High-Return, Low-Risk Method for Investing in the Dow Jones Industrial Stocks with as Little as $5,000 Paperback – Mar 22 2000
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From Library Journal
Two contrasting investment methods are offered by these titles. O'Higgins, a 20-year veteran of Wall Street, espouses a system that limits the stock universe to the 30 stocks in the Dow Jones Industrial Average. He has followed this system as a successful money manager and states that respectable returns can be realized by selecting the highest yielding of the 30 Dow stocks. Unfortunately, most of the book is background and only a few chapters are devoted to the how-to part of the system. Purchase Geraldine Weiss and Janet Lowe's Dividends Don't Lie ( LJ 1/89) before this one. O'Neil is the founder and publisher of Investor's Daily. His investment approach emphasizes the quality of a company's earnings from quarter to quarter. Having sorted this out, the investor is then advised to find stocks that are performing well in strong industry groups. Frequent mention is made of the fact that only one investment newspaper provides the data needed to conveniently employ this system. Well written and to the point, this updated title should at least be in libraries that carry Investor's Daily .
- Joseph Barth, U.S. Military Acad. Lib., West Point, N.Y.
Copyright 1991 Reed Business Information, Inc. --This text refers to an out of print or unavailable edition of this title.
"By using this approach it is possible to be successful regardless of the direction the overall market takes." -- -- New York TimesSee all Product Description
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Top Customer Reviews
While I tend to be skeptical of any investment strategy that is too simple, if you must use such a simple strategy, then you could do far worse selecting the highest dividend paying stocks from the Dow. Of course, the other option is just to index your money in a mutual fund that buys the entire stock market. Vanguard Funds is the leader in such index funds. But, I like dividends.
The difficulty with simple investment strategies is that they tend to be arrived at via data mining. The proponent of the investment method asks "What worked in the past?" and then tries to draw up a canned investment method. Almost always, the proposed method then starts to lag behind in the present and future stock market performance. (the recent performance of this strategy is discussed in another person's great book review. See that.) This is not due to market efficiency or that the method is becoming well known. It just means that the method wasn't entirely valid as a predictive method.
There is the old joke about the "X investment strategy.Read more ›
He maintains that it is still possible to beat the DOW by buying the 10 highest yielding stocks and tweaking your holdings each year, with correspondingly greater rates of return with a two- or five-stock selection from the group. O'Higgin's admits in the new eidtion that the strategy has been muddied by a drop in the relative importance of dividends as a part of total yield of the DOW. Dividends and payouts have lost lost out to stock buybacks, in part because dividends are taxed at a higher rate than long-term capital gains from stock sales. Changes in the DOW have also reduced the overall dividend payout. Of the most recent additions, Microsoft pays no dividend and Intel and Home Depot have nominal payouts. O'Higgin's strategy may also be less effective because it's simplicity and past returns attracted the attention of Wall Street money managers and of many, many individual investors. There is at least one web site devoted to the Dogs of the Dow and a number of similar investment strategies were profiled for several years on the Motley Fool website.
Nor is the most valuable part of O'Higgin's book his thumbnail sketches of other value strategies for beating the market with a basket of DOW stocks. Several seem downright ridiculous. I remain skeptical that investing based on presidential election cycles or end-of-year asset sales by fund managers can yield meaningful, long-term results for individual investors.
The value of this book is O'Higgin's championing of value investing in general and his highlighting of the resilience of the DOW stocks in markets bull and bear.Read more ›
This book as the name says is all about investing in Dow companies, the giants of the US and global economy. The companies which I truly believe that world could come to an end but GE would still be there. The book covers all the Dow components individually along with their historical financial performance, weaknesses, strenghts and their power to stay in business by being profitable over years and years. There are many different 'low risk' investment strategies covered in this book such as 'High Yielding 5'. These are the 5 Dow stock that you pick annually based on the criteria described, HOLD it for 1 year, redo the math (barely any)and pick your 5 stocks again. You also sell some at this point that didn;t meet your criteria and pick the new ones to fill their spot.
Sounds simple, yes! and that's the way it should be. Not only you can ride out the swings of the stock market in this way but also save a ton on commisions, taxes and most importantly be less stressed.
If you read the Motley Fool, you'll notice some of their strategies are derived from O'Higgin's methods.
A must read for all investors, specially younger people like myself who want to start building the nest yesterday!
Most recent customer reviews
This may be the first book that mentions how the stock market usually performs much better Nov. 1-May 1. Read morePublished on Aug. 5 2001