Divorcing the Dow: Using Revolutionary Market Indicators to Profit from the Stealth Boom Ahead
Author: Jim Troup, Sharon Michalsky
List Price: $27.95
Our Price: Click to see the latest and low price
ISBN: 0471268704
Publisher: John Wiley & Sons (31 January, 2003)
Sales Rank: 352,986
Average Customer Rating: 4.25 out of 5
Customer Reviews
Rating: 2 out of 5
Better to read (or reread) a classic!
While Divorcing the Dow highlights some tried and true criteria for selecting individual equity investments, e.g. to focus on leading companies that dominate vital growing sectors of the economy, it also falls prey to a "new logic" approach that can be very misleading, especially to beginning investors. Worse, the authors don't understand a fundamental rule of financial arithmetic. On page 162 they discuss a hypothetical investment manager that turns a portfolio worth $100,000 into $200,000 in one year, and then loses half that value the next, resulting in an end year value of $100,000. The authors suggest that the "average return" from this is 25% (the arithmetic mean of +100% and -50%). Clearly, if we began and ended with the same dollar value, the average annual return is 0%, which is the result calculated by the geometric mean, the correct method to use in computing growth rates. A 25% average annual return on $100,000 would result in a portfolio value after two years of $100,000 X (1.25^2) = $156,250. The authors and their editors should know better. In my opinion readers would be far better served by such classics as The Intelligent Investor by Benjamin Graham, A Random Walk Down Wall Street by Burton Malkiel, or Contrarian Investment Strategies, by David Dremen.
Rating: 5 out of 5
Provoking Examination of the "Financial Markets"
Divorcing the Dow provided a provoking examination of how we have historically defined the financial "markets". This book challenges the reader to re-define how we have used outdated measurements to forcast future market conditions. The authors have presented a new and fresh approach to evaluating the next financial revolution! After a 3 year bear market, I feel more optimistic than ever before!
Rating: 5 out of 5
Wow, what a book!
Finally a positive outlook.The authors'extensive research and easy read format makes it hard to put down. Divorcing The Dow constitutes information from the past that can be used as a road map for future investing. The research alone is worth the price of the book.
Thank you for such a great book in these uncertain times.
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