Unformatted text preview: n. A study by
Hirschey (Hirschey, M., 2000, The “Dogs of the Dow” Myth, Financial Review, v35, 1-15.) in 2000 also
indicates that there are no excess returns from this strategy after you adjust for risk. 22
2. Why would ten of the most highly followed stocks in the world be so seriously
misvalued by investors? In other words, why are other investors not seeing the same
opportunities that you do in these stocks?
3. Many of the stocks on this list have at least one big concern weighing them down –
Altria (the former Philip Morris) has tobacco lawsuits and J.P. Morgan Chase faced
legal problems associated with Enron. Will these companies continue to pay their
dividends if these concerns turn into financial liabilities?
You may very well conclude that the reward is worth the risk, but that should not be a
conclusion made in haste and without analysis.
In a different version of the dividend story, stocks that have increased their dividends
over time are viewed as better investments than stocks than stocks than stocks where
dividends have been stagnant or...
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- Spring '11