Winning
with the Dow's Losers
Beat
the Market with Underdog Stocks
By
Charles B. Carlson, CFA
From
Macro Economics 101:
1) In the long term, the market generally rises, and
2) don't risk money you can't afford to lose.
Mr. Carlson's approach is in concert
with these fundamentals. He stresses that taking advantage of mean
reversion and contrarian investing is a micro-strategy and should
be a component of a "diversified, balanced and varied approach
to investing," perhaps up to 30% of a 65% stock-weighted portfolio
for long term investors at age 50 (19.5% total).
The hook, on the back cover and in
early chapters, says that you can "start with as little as
$1000". This equates to a balanced portfolio of approximately
$5000 (page 170). The fallacy lies in equating "starting the
strategy" with "starting a portfolio", something
a novice investor may not understand until after buying the book.
Initial investment between $5000 and $10,000 (portfolios between
$25,000 and $50,000) is encouraged. Thus it appears there is a conundrum
in the publication and marketing of the book. According to Mr. Carlson's
asset allocation advice, if you only have $1000 to invest, this
is not the best way to do it, and if you have $5000-$50,000, what
is the likelihood that are you consulting a $14.95 paperback for
investment planning?
"Winning with the Dow's Losers"
is educational. Over 25% of the text is devoted to explaining what
the Dow Jones Industrial Average is, who are the members, why it
is significant, how it is calculated or manipulated, and how it
is used to analyze overall market trends. This was clearly presented,
and I enjoyed the way it brought this uninformed individual into
the light. This and the Dow Component Performance tables make the
book worth keeping in my library. |
The
Book |
HarperBusiness/HarperCollins
|
January 1, 2005 |
Paperback |
0-06057658-8
|
Business
& Investing |
More
at Amazon.com |
Excerpt
|
NOTE:
|
The
Reviewer |
Beth McKenzie |
Reviewed
2005 |
NOTE:
|
|