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Stockstips: stock advice, stock market, investing, finance, economics, bonds, brokerage, dow jones
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The backbone of any economy is the entrepreneur and his/her partner(s) who create products and ultimately supply their wares
to the public. What assists the entrepreneur in his/her continual desire to create a better product is the capital provided
by the private investor. That investor is you and me. Without our involvement in buying stocks, all the wonderful consumer
products we enjoy on a daily basis would not be available. The main problem for us investors, is determining the prudent
way to proceed. This problem is not one of our creation. The entire education process in which we Americans were raised
prepares us very little for our financial future. I found one book that makes the entire investing process so simplistic
that at first glance it appears impossible. This book is BEATING THE DOW by Michael B. O'Higgins and I will rely heavily
on his theories in explaining which stocks to purchase.
Again, I do not know the author nor will I profit in any way from offering this advice. I created this website to 1)
help my fellow Americans in their investment pursuits and 2) to bring more capital to companies who hopefully will use the
revenue to introduce better products to the market at large.
Firstly, I want to implore anyone who is interested in O'Higgins' theories to buy his book. There is a link on this
site to buy his book from Amazon. It costs as little as $2.00 used and it's a very easy read. I think I finished it in two
nights, and by itself it makes the dry knowledge of finance quite interesting. I will use quotes from his book to further
reinforce the theories on this site but these quotes will be snapshots form his book. It is possible to invest using just
the information on this site but when you're talking about investing $5,000 dollars, what's 5 or ten dollars more? AGAIN,
I DO NOT KNOW MR. O'HIGGINS NOR WILL I PROFIT PERSONALLY IN ANYWAY FOR SHARING THE FOLLOWING INFORMATION .
O'Higgins' theory to invest is simple. Using the stocks listed on the Dow Jones, the investor will utilize O'Higgins
High-yield/Low-price theory. It works like this. All stocks on the Dow Jones hand out dividends. Dividends are the portion
of the company's profit paid out to its shareholders. Now, dividing the dividend by the stock price will provide a dividend
yield. For example, a stock is trading for $100 dollars and gives out an annual dividend of $4 per year ($1 per quarter).
The yield for this stock would be 4%. A stock with a price of $50 with the same dividend amount would yield 8%. O'Higgins
theory is by using a spreadsheet, list all the stocks on the Dow Jones with the highest yields first. Then you make three
additional columns. The top ten highest yields are one column. The next column consists of these top ten with the highest
yields, you mark the five with the lowest prices. In the third and final column you choose the one stock of the ten highest
yielders which is the second-lowest price. O'Higgins explanations are on the following page. Below is a list of stocks I
will be using. Due to limitations on this free site, I was only able to list the top 19 high-yielders. The stocks on this
sheet are the prices as of 1/31/03. Once the stocks are chosen, you must wait one year and see how well you did. The true
brilliance behind this theory is that you can start anytime and you will always beat any gain or limit your loss compared
to the Dow's performance!
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SYMBOL
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DOW STOCK
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CLOSING PRICE
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DIVIDEND
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YIELD
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10 W/HI-LO
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5 W/LOWEST PRICE
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PPP
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MCD
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McDonald's
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$14.24
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0.40
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2.81
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X
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XX
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|
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MO
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Altria Group
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$37.87
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0.64
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1.69
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X
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GM
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General Motors
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$36.33
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0.50
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1.38
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X
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|
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SBC
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SBC Communications
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$24.44
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0.33
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1.35
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X
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XX
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|
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DIS
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Disney
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$17.50
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0.21
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1.20
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X
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XX
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PPP
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VZ
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Verizon
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$38.28
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0.39
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1.02
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X
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|
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DD
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EI DuPont de Nemours & Co.
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$37.87
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0.35
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0.92
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X
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GE
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General Electric
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$23.14
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0.19
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0.82
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X
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XX
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HON
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Honeywell Inc.
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$24.44
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0.19
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0.78
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X
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AA
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Alcoa Inc.
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$19.77
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0.15
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0.76
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X
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XX
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XOM
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Exxon Mobil Corp.
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$34.15
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0.23
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0.67
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MRK
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Merck
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$55.39
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0.36
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0.65
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|
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C
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Citigroup
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$34.35
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0.20
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0.58
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|
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KO
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Coca-Cola
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$40.46
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0.22
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0.54
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BA
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Boeing
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$31.59
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0.17
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0.54
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PFE
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Pfizer
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$30.36
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0.15
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0.49
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HPQ
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Hewlett-Packard
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$17.41
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0.08
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0.46
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CAT
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Caterpillar Inc.
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$43.98
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0.18
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0.41
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JNJ
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Johnson & Johnson
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$53.61
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0.21
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0.39
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