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
|Bottom 6 Dow Components by shares out.|
Sell all stocks with more than 1 billion shares outstanding and only buy stocks with under 1 billion shares outstanding.
Try your two week free trial today at www.canadianinvestors.com.