Winning with the Dow's Losers: Beat the Market with Underdog Stocks - Hardcover

Carlson, Charles B.

Hardcover

ISBN 10: 006057657X ISBN 13: 9780060576578

Publisher: Harper Business, 2003

Synopsis

In the course of his research, bestselling author and market expert Charles B. Carlson noticed a surprising trend in the 30 stocks that make up the Dow Jones Industrial Average -- the worst-performing stocks in one year turned out to be among the best-performing stocks the following year.

For example, the worst performer in the Dow in 1999 was Philip Morris, declining 57 percent during the year. In 2000, however, Philip Morris was the best-performing Dow stock, rising 91 percent and far outpacing the Dow's negative 6-percent return. Something similar happened with AT&T, which hit bottom in 2000 and bounced back in 2001. And Eastman Kodak, which was among the 10 worst performers in the Dow in 2001, was the best-performing Dow stock in 2002, gaining 26 percent versus a 15-percent loss in the Dow the year before.

These simple observations, now backed by extensive research, have become the basis of a new and startlingly effective method of stock investing that is the subject of this book. Carlson's "worst-to-first" strategy yields amazing results again and again. In fact, if you simply invested in the worst-performing Dow stock each year beginning with $1,000 in 1983, your nest egg would have grown to an astounding $68,000 by the end of 2002. In contrast, an investment in the Dow Jones Industrial Average would have netted only $14,000.

In Winning with the Dow's Losers, Carlson shows how an investor, with any size portfolio or any level of investment knowledge, can employ this simple, sound, and time-tested strategy to generate impressive wealth over the long term.

• Start with as little as $1,000.
• Invest in as few as 1 or as many as 10 Dow stocks.
• Review and adjust your portfolio no more than once a year.
• Achieve better results than the famous "Dogs of the Dow" approach.

Stock market fads come and go. Investors who chase them usually enrich their stockbrokers and not themselves. Not any longer. Now, with the help of Winning with the Dow's Losers, you can pick winning stocks year after year.

About this title

About the Author:

Charles B. Carlson, cfa, is CEO of Horizon Publishing and Horizon Investment Services, a money management firm. He is the editor of DRIP Newsletter and a contributing editor to Dow Theory Forecasts. Carlson is the author of eight books, including the bestselling Buying Stocks Without a Broker. He earned his MBA from the University of Chicago.

From Publishers Weekly:

The simplest approach to investments has been the mantra of market strategist Carlson. As editor of the newsletter DRIP [Directory of Dividend Reinvestment Plans] Investor and author of several books, he has long advocated holding stocks that pay dividends and then reinvesting these dividends back into stock. Here, he offers a new approach to stock investing. According to research on the performance of the stocks that compose the Dow Jones Industrial Average-Boeing, Wal-Mart, McDonald's, Home Depot, etc.-a bad year is likely to be followed by a great year for these stocks. By tracking the stock performance of the companies, investors can then choose which stocks to buy and will be able to buy the stock "low" and sell "high." Carlson explains the research in easy-to-understand language: "Indeed, if you can make successful bets on the Dow's lowest priced stocks (and, conversely, determine what high-priced Dow stocks are pricey and avoid or short them), you should consistently generate index-beating returns." Carlson also offers several compelling reasons why this strategy works, including consistency of performance over various time frames, simplicity, tax advantages and flexibility. Also included are snapshot profiles of all the companies in the Dow. Given the turbulent swings of the stock market over the past few years, most investors now understand there is no single guaranteed approach to investing. However, Carlson's plan is sound and his suggestions for incorporating it into an existing portfolio will let readers easily test it out.
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

About this edition

• Publisher: Harper Business
• Publication date: 2003
• ISBN 10: 006057657X
• ISBN 13: 9780060576578
• Binding: Hardcover
• Edition number: 1
• Number of pages: 320