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Originally Posted by Olav23
On the dow idea, there is a well known tactic did sorta similar, except the exact opposite  called "dogs of the dow". The idea behind the "Dogs of the Dow" strategy is to buy those DJ companies with the lowest P/E ratios and highest dividend yields. By doing so, you're selecting those Dow stocks that are cheapest relative to their peers. So, basically, you are buying the WORST performing dow stocks. It is a value play and it worked well for a time. Then everyone started doing it and it worked its way out of the market. |
You missed what I said then... yes, I know the dogs of the Dow... but that is one where you buy the highest yielding stocks.... they might or might not be the 'best' or 'worst'...
When I say rank them, you have to rank according to expected total gain.. you might have all the Dogs in this group.. maybe not... what you are trying to do is 'pick' the one or two WORST stocks for expected return next year. Now, you might not actually pick the one number 30, but if it is in the bottom 10, then you buying all the others as a group, you beat the index...
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