The Dow Approach

Dow Dividend Strategy | What's Here | The Statistics Center | Spin-Off Help | The Archives
Monday, March 3, 1997
The Daily Dow FOOL GLOBAL WIRE by Robert Sheard LEXINGTON, KY. (Mar. 3, 1997) -- The Scene: A Middle-America Living Room. Joe: I just figured out my capital gains for my taxes. I didn't know I'd been doing so well over the last few years in the market. Freddy: Well, it's been a pretty good time all around. How well? Joe: Well, I've been trading a lot, so I was able to average about 12% or 13% a year since 1991. Freddy: 12% or 13%? How many trades are you averaging a year? Joe: About 100. Freddy: Now let's get this straight. You average 100 trades a year, probably paying $20 in commissions on each, and you averaged a total return of about 12% or 13%? Joe: Pretty slick, huh? I've always liked being a trader. Since I'm a high school math teacher, I've got a knack for the numbers. Freddy: Do you know how much the market is up during the same time? Joe: No... why? Freddy: Well, we've always been friends, so I don't want to hurt your feelings, but what are you thinking???? <slap, slap> Since 1991, the 30 Dow stocks have averaged over 20% a year. And the simple High-Yield Dow Approach has done even better, over 31% a year (for the Unemotional Value 4). And that only requires about 30 minutes a year and 4 - 6 trades. Get with it, man; you of all people should be able to do the math! Author's note: This is a paraphrase of an actual exchange that occurred last week. I've changed names to protect the guilty and took liberties with the dialogue since I only heard the story second hand. But I wanted to share it to demonstrate how much work we have yet to do to make the world Foolish. Apart from the scary implications for this guy's students, the fact that even our math educators are still completely ignorant of market accountability and basic financial principles cries out for a renewed appeal across the nation for our schools to begin teaching personal finances as vigorously as any other core subject. Given the inflows of cash into the market through retirement accounts from the Baby Boomers, we can't let another generation slip by, ignorant of essential financial knowledge. This should be one of our primary rallying cries as Fools. (Can you tell I used to be a teacher? Class dismissed.) (c) Copyright 1997, The Motley Fool. All rights reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool.	The Current BTD 10 1. AT&T <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:T)") else Response.Write("(NYSE:T)") end if %> 2. *International Paper <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:IP)") else Response.Write("(NYSE:IP)") end if %> 3. *Goodyear Tire <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:GT)") else Response.Write("(NYSE:GT)") end if %> 4. *General Motors <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:GM)") else Response.Write("(NYSE:GM)") end if %> 5. *Chevron <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:CHV)") else Response.Write("(NYSE:CHV)") end if %> 6. Minnesota Mining <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:MMM)") else Response.Write("(NYSE:MMM)") end if %> 7. Texaco <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:TX)") else Response.Write("(NYSE:TX)") end if %> 8. Exxon <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:XON)") else Response.Write("(NYSE:XON)") end if %> 9. J.P. Morgan <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:JPM)") else Response.Write("(NYSE:JPM)") end if %> 10. Philip Morris <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:MO)") else Response.Write("(NYSE:MO)") end if %> ***NOTE: FOOLISH FOUR STOCKS ARE PRECEDED BY AN ASTERISK AND ARE ITALICISED Last Update: 03/03/97
Today's Dow Numbers Stock Change Last -------------------- T -3 36.88 GM +1 3/8 59.25 CHV +1 1/8 65.63 MMM + 1/2 92.50 Day Month Year Since 1996 FOOL-4 -1.89% -1.89% -0.69% 28.41% DJIA +0.60% 0.60% 7.30% 35.21% S&P 500 +0.57% 0.57% 7.37% 29.12% NASDAQ +0.17% 0.17% 1.56% 24.62% Rec'd # Security In At Now Change 1/2/96 155 3M 64.50 92.50 43.40% 1/2/96 198 Chevron 52.38 65.63 25.30% 1/2/97 231 Gen. Motor 55.75 59.25 6.28% 1/2/97 618 AT&T 41.75 36.88 -11.68% Rec'd # Security In At Value Change 1/2/96 155 3M 9998.09 14337.50 $4339.41 1/2/96 198 Chevron 10370.25 12993.75 $2623.50 1/2/97 231 Gen. Motor 12878.25 13686.75 $808.50 1/2/97 618 AT&T 25801.50 22788.75 -$3012.75 CASH $396.17 TOTAL $64202.92

Main Page Fool Wire Hall of Portfolios Fool's School Daily News Fool Mart Foolish Games Copyright©1997, The Motley Fool, All Rights Reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool, Inc. Legal Disclaimer, in fine print of course! Questions or Comments? Please contact Ted Verrill at [email protected]