Safehaven | Great Danes of the Dow | Printer Friendly Version

August 14, 2006

Great Danes of the Dow
by Adrian Burridge

TWIST ON THE DOGS OF THE DOW THEORY. I call it the GREAT DANES OF THE DOW based on those dogs that are just too big because they have the most shares outstanding. Those with the most shares outstanding in the DOW 30 have underperformed in 2006 while those with the fewest shares outstanding (POODLES) have outperformed. It does confirm however, that demand and supply still matter. I have not back tested it further than 2006 and I have yet to test it on the S&P 500. Here however are the results. Notice as well that the top 6 components represent 48% of the total shares outstanding of the DOW 30 while the bottom 6 components represent 4.8% of the total shares outstanding of the DOW 30. I showed you yesterday that total shares outstanding in the DOW 30 are more than 92 billion, not including share options et al. (not including dividends).


Top 6 DOW components by shares out. (Rounded)		Stock Price Dec. 30th, 2005	Stock Price July 6th, 2006	YTD Performance

GE	10,400,000,000.00	35.05	33.50	-4.42%
Microsoft	10,200,000,000.00	26.15	23.50	-10.13%
Pfizer	7,030,000,000.00	23.32	23.75	1.84%
Exxon	6,050,000,000.00	56.17	63.50	13.05%
Intel	5,820,000,000.00	24.96	18.90	-24.28%
Citigroup	4,970,000,000.00	48.53	49.21	1.40%

Average				-3.76%



Bottom 6 Dow Components by shares out.

Alcoa	870,000,000.00	29.57	33.50	13.29%
Honeywell	830,000,000.00	37.25	39.80	6.85%
Boeing	800,000,000.00	70.24	80.50	14.61%
MMM	750,000,000.00	77.50	81.25	4.84%
Caterpillar	670,000,000.00	47.77	73.50	53.86%
GM	570,000,000.00	19.42	29.25	50.62%

Average				24.01%

Conclusion
Sell all stocks with more than 1 billion shares outstanding and only buy stocks with under 1 billion shares outstanding.

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Adrian Burridge
CanadianInvestors.com

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