Books

Average customer rating:

Some excellent material but not really enough for a full book
Great system
intro to 1 style mechanical (ie. rigid rule based) investing
Not a totally bad method of choosing stocks
Beating the Dow, Still an Unbeatable Read

Beating the Dow (Revised and Updated)
Michael B. O'Higgins , and John Downes
Manufacturer: Collins
ProductGroup: Book
Binding: Paperback

General | Popular Economics | Business & Investing | Subjects | Books

General | Business & Investing | Subjects | Books

General | Investing | Business & Investing | Subjects | Books

Stocks | Investing | Business & Investing | Subjects | Books
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ASIN: 0066620473

Book Description

In 1991, Michael B. O'Higgins, one of the nation's top money managers, turned the investment world upside down with an ingenious strategy, showing how all investors--from those with only $5,000 to invest to millionaires--could beat the pros 95% of the time by putting 100% of their equity investment into the high-yield, low-risk "dog" stocks of the Dow Jones Industrial Average. His formula spawned a veritable industry, including websites, mutual funds, and $20 billion worth of investments, elevating the theory to legendary status.

Reflecting on the greatest bull market of our time, this must-have investment guide has been revised and updated for a new economy. With current company and stock profiles, as well as new charts, statistics, graphs, and figures, Beating the Dow is the smart investment that you--and your portfolio--can't afford to miss

Customer Reviews:

Some excellent material but not really enough for a full book.......2007-06-01

2nd edition (2000) with Johns Downes, 259 pages

O'Higgins' basic method for selecting out of favour stocks from the Dow Jones Industrial Average can be explained in a single sentence: list the ten stocks from the Dow with the highest dividend yield, and then select the five with the lowest share prices from these ten. Buy an equal weighting in each of them and after one year, sell and start again.

So you could be forgiven for wondering how he manages to fill a book. I found significant chunks to be of little interest in understanding why and how his method has worked. For example, I didn't find his introduction on why stocks are the best long term investments, or his potted history of each of the Dow constituents (which takes up just under half the book) added much. (The history of the Dow stocks also reads as if at least the updates for the 2nd edition were written in a considerable hurry.) However, if you are new to equity investing these parts may be more useful to you. Even so, I cannot understand why O'Higgins included the addresses for each of the Dow stocks in the main body of the book when his method is a mechanical one which requires that you do not do any specific stock research or have any contact with companies.

I bought this book with a particular aim in mind: to understand the background better to see how it could be applied in the UK. For example, some people try to apply it to the FTSE 100 and others to the FT 30 index and others use the lowest market capitalisation rather than the lowest share price as the second filter.

After reading the book I concluded that the FT 30 index with lower share prices (i.e. with minimum changes to O'Higgins' original method for the Dow) would be most appropriate. This is because the FT 30 index is modelled on the Dow and has greater stability than the FTSE 100. Even so, there are differences between the FT 30 index and the Dow, which might mean there is greater specific stock risk in the FT 30 (for example, FT 30 stocks are only replaced if they are taken over or fail, whereas Dow stocks can be replaced by the editors of the Wall Street Journal).

Regarding the choice of low share price or low market capitalisation for the second filter, O'Higgins specifically states that the most relevant factor is "simply the phenomenon that the less expensive a stock is, the more it is prone to greater percentage moves." O'Higgins also believes UK companies are more prone to cutting their dividends in difficult periods compared to US companies and that this may mean a mechanical method based upon dividends would work less well in the UK.

Anyway, notwithstanding my gripes above about the padding in the book, the good parts are very good and the book carries an excellent central thesis: that simplicity not only entails less work, but also often produces better results.

By the end of the book I also understood why the method is likely to continue working. Historically the method did not work every year (for example during the last few years of the dot com boom), but produced good results over the long term. As O'Higgins states: "It's the occasional off-year that allows anomalies, like the strategies we'll be discussing next, to exist." The second, critical factor is that the method automatically enforces a contrarian discipline. I like the way O'Higgins puts it:

"In an investment world addicted to complexity, it can almost be said that keeping it simple is itself a form of contrarianism. It can certainly be said that for a system like mine to become too popular to work, contrarianism would have to become conventional wisdom. That would mean turning human nature on its head."

Great system.......2006-12-11

This book simply suggests listing the 30 Dow components and then buying the lowest price stocks in the group that also has the best yield (Dividend %).You skip the lowest priced because that one probably does have issues versus being a value. You can either put your $5000 in the second to lowest priced with the best yield, or the 2nd-6th stocks, or the 2nd to 11th stocks that are the lowest priced with the best yield. He shows the back tested history of this method as delivering huge gains. It is a system to think about or use it to develop your own.
The biggest thing I got out of this book was the direction to read books by Yale Hirsh. This was very profitable for me to discover the November-May stock market pattern, the presidential election cycle and the days of the week. You must read The Almanac Investor(by his son), it is VERY valuable, I made $10,000 from Sept 1st 2006 to Dec 9th 2006 due to my aggressive stance in November and December.

intro to 1 style mechanical (ie. rigid rule based) investing.......2004-08-07

O'Higgins writes nicely... and identifies with specificity one generally agreeable style of mechanical stock investing... it doesn't particularly work well recently... but it is a useful text to introduce the idea of rule-based (non-emotional) trading decision making. assumptions of money management particularly out of phase with first tier thinking.. but i like the book.

Not a totally bad method of choosing stocks.......2002-03-13

"Beating The Dow" by Michael O'Higgins offers the following simple investment strategy. You simply buy the ten highest dividend paying stocks among the Dow Industrial Averages. The Philosophy is that as the value of the stocks increase, via stock price lagging or falling below the market, the dividend yield will tend to rise. (i.e. the assumption is that dividend yield is a proxy for value. One problem is that not all Dow stocks pay out the same level of earnings, so some stocks will tend to have higher dividends.)

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." When a computer was asked to vigorously evaluate the stock market and look for predictors of future investment success, the computer spit back the answer, "Invest in stocks whose name begins with an 'X' and whose name ends with an 'X.' " Xerox was the top performing stock over the period.

"Beating The Dow" is one of those books, if read all by itself, might mislead a new investor into an over-simplified investment strategy. Yet, you might enjoy reading it. And, as stated, you could do worse than holding the ten highest dividend-paying Dow stocks.

"Beating The Dow" also mentions what Michael O'Higgins calls the "Penulatimate Profit Prospect (PPP)" which involves buying just one stock. The Stock with the second lowest price among the ten highest yielding stocks. I consider that Penidiotic. We conservative investors do love our stock dividends, and the focus on dividend yield gets "Beating The Dow" a solid honorable mention.

Peter Hupalo, Author of "Becoming An Investor: Building Wealth By Investing In Stocks, Bonds, And Mutual Funds."

Beating the Dow, Still an Unbeatable Read.......2001-12-22

Michael O'Higgin's investing classic holds up as well in the New Millenium as it did when it first hit book stands 10 years ago.

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. Most people aren't professional investors and lack the time and resources to profit from a strategy of active trading. If the efficient markets guys are right, then buying all 30 DOW stocks and holding on long-term will beat returns of most professionally baskets of stocks, with less risk and less payouts for taxes and trading costs to boot. Or maybe buying the highest yielders in any given year and holding. Anyway, you get the picture.

Regardless of whether you think the high-yield 10 is still capable of outgaining the overall DOW, O'Higgin's book is, to me, as valuable in 2001 as it was when I first read it in 1993.

Beating the Dow with Bonds: A High-Return, Low-Risk Strategy for Outperforming the Pros Even When Stocks Go South
Average customer rating:

Good INvesting Advice for Low Interest Rate Cycles

A sad waste of paper - babbling brooks are better

Interesting...but confusing

Profitable, Pragmatic Advice for All Investment Scenarios

Not very good, but....

Beating the Dow with Bonds: A High-Return, Low-Risk Strategy for Outperforming the Pros Even When Stocks Go South
Michael B. O'Higgins , and John McCarty
Manufacturer: Collins
ProductGroup: Book
Binding: Paperback

General | Popular Economics | Business & Investing | Subjects | Books
General | Business & Investing | Subjects | Books
Bonds | Investing | Business & Investing | Subjects | Books
Introduction | Investing | Business & Investing | Subjects | Books
General | Personal Finance | Business & Investing | Subjects | Books
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The Intelligent Asset Allocator: How to Build Your Portfolio to Maximize Returns and Minimize Risk

ASIN: 088730883X

Amazon.com

Michael O'Higgins is worried. The ideas advanced in his 1989 classic, Beating the Dow, have been adopted by mutual-funds and market gurus alike as a proven formula for getting consistently high returns with a minimum of risk. In that book, O'Higgins introduced a system that become known as the Dogs of the Dow, which prescribed investing in out-of-favor Dow stocks--an approach that has produced annual returns that have handily beaten most all market averages.

These days, however, O'Higgins is less concerned about beating the market than surviving it. In Beating the Dow with Bonds, O'Higgins considers the wild valuations of today's stock market and sees the specter of a sharp and steep decline. To face this inevitable selloff, O'Higgins offers a survival strategy that involves annually allocating assets among stocks (Dow Dogs), T-bills, and T-bonds. While most members of the baby-boom generation know how stocks work, they'd be hard-pressed to explain the arcane world of bonds. O'Higgins explains them admirably. Had you followed O'Higgins's new system for the last 30 years, which saw six bear markets, your portfolio would have enjoyed an average annual return of 23.77 percent versus 18.03 percent with his Dow Dogs portfolio and 11.77 percent with the DJIA.

O'Higgins is no Chicken Little--rather, he's a market contrarian with a proven and profitable track record. If you think the stock market will go up forever, then look elsewhere for advice. But if you believe in gravity, then get this book and read it soon. Highly recommended. --Harry C. Edwards

Amazon.com Audiobook Review

Michael B. O'Higgins entered the stock-brokerage business in the early 1970s, right on the verge of a rabid bear market. So his skepticism about the continued rise in stock prices is understandable. At the same time, he notes that bond yields, as of the 1999 publication date of this audiobook, are historically high relative to inflation. Therefore, an investment portfolio combining stocks and bonds, rather than stocks exclusively, should beat the Dow Jones Industrial Average in the future. Hiring A&E Network's Jack Perkins, cohost of the acclaimed Biography series, to read this audiobook was a stroke of genius. Perkins's voice adds the heft of lifelong experience and hard-won wisdom to O'Higgins' rather dry explanations of what bonds are and why you should invest in them. (Running time: 3 hours, 2 cassettes) --Lou Schuler

Book Description

In 1991, Michael B. O'Higgins, one of the nation's top money managers, revolutionized the investment industry by asserting that investors could beat the pros 95 percent of the time by putting 100 percent of their money into the "dog" stocks of the Dow. His book, Beating the Dow, became a bestselling investment classic and spawned an industry of websites and mutual funds, elevating the theory to legendary status.

Now, with equities dangerously overvalued and stock prices at an all-time high, O'Higgins turns his attention to bonds, providing a proven system for achieving the lowest risk, highest returns in a chaotic stock market--requiring less than five minutes per year and helping you beat the pros 95 percent of the time, regardless of market conditions. Utilizing a simple, proven method for mastering the market by determining the best investment choices, Beating the Dow with Bonds evaluates companies and bond ratings, to help you achieve the highest risk-adjusted returns. For investors with as little as $5,000, Beating the Dow with Bonds provides a safer, more reliable opportunity to beat the Dow not just in today's market--but in any market.

Customer Reviews:

Good INvesting Advice for Low Interest Rate Cycles.......2006-08-01

Zero coupon bonds are the bonds spoken of in the book's title. Zero coupon bonds do well in falling interest rate and stable, low interest rate investing environments as we had 90% of the time from 1982 to 2004. Now is NOT the time to use this book's advice, wait until interest rates fall again (2010??).
but it is true, by not owning any stocks O'Higgins outperformed the greatest -and longest- bull market in history.

A sad waste of paper - babbling brooks are better.......2004-09-09

Having read many books on various financial subjects, this one is on my list as one of the top 10 wastes of time. In fact I am only writting this to hopefully save you time! Warning! When the reviews are from annonymous 'a reader' be suspicious!

Interesting...but confusing.......2003-08-14

I agree with much of what has already been said as far as the amount of filler and the editorial glitches. And can anyone figure out the last chart -- table 11.1? These numbers make no sense and don't even correspond with the info on table 9.1. I began the book with some excitement but ended up feeling very uncertain about the method.

Profitable, Pragmatic Advice for All Investment Scenarios.......2001-10-19

This is one of the few stock market books from the 1990s that will be read and appreciated many years from now. While silly stuff like "Dow 36,000" & Harry Dent quickly withers away, O'Higgins advice gains credibility every day in this apparently multi-year bear market. Several web sites (beartopia dot com & others) mention this book. Perhaps the book's title should have substituted "zero coupon bonds" for the word "bonds." Do look up the authors corrected list of investment steps here at Amazon, however, do not let the slightly sloppy editing deter you from learning this powerful investment advice. The more knowledgable one is of the market, the more one appreciates O'Higgins and his two works. This book's advice works in bull and bear markets.

Not very good, but...........2001-07-27

The book was not very well written, and why he felt the need to devote 70 pages describing in copious detail all 30 of the Dow stocks is beyond me. However, his 30 year zero-coupon analysis does have something going for it, and the inflation rate is a good predictor for a change in asset allocation.

Taming Complexity: Beating the Dow 3 to 1

Average customer rating:

Taming Complexity: Beating the Dow 3 to 1
Dennis McNicholl
Manufacturer: Traders Press
ProductGroup: Book
Binding: Paperback

General | Business & Investing | Subjects | Books

General | Investing | Business & Investing | Subjects | Books

Stocks | Investing | Business & Investing | Subjects | Books
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The Master Profit Plan: Your 5-Step Trading Plan

ASIN: 0934380848

Book Description

This book differs from the usual technical analysis text because it brings a new and simple perspective to short-term trade stock selection. As you'll see, this book is based on the central idea that short-term trade stock selection procedures can be based on the same set of statistical methods now used routinely in business, engineering, medical research, and even in today's ubiquitous opinion poll analysis. In fact, it is just in aligning our technical analysis methods with these common statistical procedures that we tame the complexity of our technical analysis statistical tools, and thus our trading.

By reading this book, you'll learn about a small set of basic statistical tools that can be combined to form a simplified, yet profitable, short-term trading system. These are the statistical tools that I selected while designing, backtesting, and actively trading my own short-term trading system. I call this trading system MIDOS, which stands for Mechanical-In and Descretionary-Out System. In addition to a clear explanation of the MIDOS statistical tools, you'll find the conceptual framework of MIDOS fully explained in this book.

Beating the Dow with Rental Houses: How Small Investors Can Create Wealth and Income with Single-Family Rental Properties
Average customer rating:
Beating the Dow with Rental Houses: How Small Investors Can Create Wealth and Income with Single-Family Rental Properties
Kevin C. Maki
Manufacturer: KBD Real Estate Solutions
ProductGroup: Book
Binding: Paperback
ASIN: 0972247505

Book Description

A handful of rental houses can make you a millionaire!

This book shows you step-by-step how to achieve financial independence with single-family properties.

How to locate and acquire profitable rental properties,
finding bargain houses in any market,
conventional and unconventional financing options,
setting realistic financial goals,
ways to pyramid your real estate holdings,
recognizing and managing investment risks,
strategies to maximize tax savings,
managing for minimum hassle and maximum profit,
owning rental houses as a home-based business,
and what to do if you are starting from scratch.

Beating the Dow with T-Bonds, T-Bills, and stocks
Average customer rating:
Beating the Dow with T-Bonds, T-Bills, and stocks
Michael O'Higgins
Manufacturer: O'Higgins Fund
ProductGroup: Book
Binding: Unknown Binding

General | Investing | Business & Investing | Subjects | Books
ASIN: B0006R7ZU0

BEATING THE DOW PB REV ED
Average customer rating:
BEATING THE DOW PB REV ED
OHIGGINHS MICHAEL
Manufacturer: HarperCollins
ProductGroup: Book
Binding: Paperback

General | Personal Finance | Business & Investing | Subjects | Books
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ASIN: 006662052X

Beating the Dow, 1992: A High-Return, Low-Risk Method for Investing in the Dow Jones Industrial Stocks With As Little As $5,000
Average customer rating:
Beating the Dow, 1992: A High-Return, Low-Risk Method for Investing in the Dow Jones Industrial Stocks With As Little As $5,000
Michael O'Higgins; John Downes
Manufacturer: Harper Perennial
ProductGroup: Book
Binding: Paperback
ASIN: B000QY8KHA

Average customer rating:
BEATING THE DOW
Michael Ohiggins
Manufacturer: Harper Collins
ProductGroup: Book
Binding: Paperback
ASIN: B000H27R2K

Beating The Dow -
Average customer rating:
Beating The Dow -
Michael O'Higgins -
Manufacturer: Harper Publishing -
ProductGroup: Book
Binding: Hardcover
ASIN: B000P13L8C

Average customer rating:
Beating the Dow
Michael with Downes, John O'Higgins
Manufacturer: Harper
ProductGroup: Book
Binding: Paperback
ASIN: B000GRBCH2

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