GE booted from DJIA does that change your Dogs of the Dow holding

[oldtom01]

Hi All.

I have a small part of my over all portfolio following a strict DoD program as an experiment.

Yesterday the DJIA de-listed GE meaning it can no longer, by definition, be on the Dogs of the Dow list. Normailly if a company falls off the list mid-year, you just sell it at the end of the year and rebalance accordingly.

In my mind this situation is no different. I'll continue to hold GE for good or for bad and then, assuming it's still not on the DoD at the end of the year, I'll sell and rebalance.

But I thought I'd poll the hive mind anyways.

[Seppia]

I just bought some more GE today, and I'm hoping it goes further down so I can buy more

[thegreatvoid]

it´s the oldest Dow component . truely a historic day.

I wouldn´t buy the stock . don't try to catch a falling knife !

[Sclass]

Agreed. I had some old timers saying the same thing to me back in 2007. It was “such a good deal.”

No thanks.

?

I just bought some more GE today, and I'm hoping it goes further down so I can buy more

Seriously? Listen to what you’re saying.

[jennypenny]

Yeah, I remember people trying to convince me to buy up Lucent shares in 2000. IIRC it was the most widely-held stock when it first started its plunge into the abyss, which added to the popular but misguided belief that it would regain its former glory in no time.

What's the over-under on former Dow companies? I have no idea.

[Jason]

Stock implications aside, does this mean its no longer appropriate to ask why the soldier saluted his refrigerator?

[BlueNote]

The DOW is a terrible index and dividends are sort of a dirty back door to value investing. Instead of the faddish DoD you can invest into the equally fadish ,yet more researched, value factor across the world stock markets which is in IMHO a better way to go about it. More diversification and more exposure to the value factor.

Or if you really want to do an awesome stock screen you should do something like trending value which was probably the best stock screen to come out of the book What Works On Wall street, and beat the hell out of DoD.

How's that for the hive mind.

[Farm_or]

It's a bit more complicated than buying low. In the case of GE, the significant fundamental of huge DEBT - my favorite four letter financial word.= Buyer beware.

I'm with blue note. Diversify better. It is convenient to track the Dow because it is publicized first and readily. But it is made out of beurocracy. A hodge podge bunch of financial experts who are trying to represent a broad and diverse market with 30 companies. It doesn't really mean anything when you see it as it is.

[jennypenny]

@BN--I know several people who use trending value strategies for some of their portfolio. Most are very happy with it. Some advisors have adopted allocating a portion of portfolios to trend-based strategies.

Anyone using one? Results?

[Lemur]

I have kept my eye on GE for a long time...still watching it drop. Would only buy after it starts climbing back up; well aware that I would miss out on a few "gains' but absolutely reduce the risk of catching a falling knife.

[cmonkey]

I decided to run DoD in my big IRA last year and avoided GE thankfully. So I don't need to worry about that one.

I would avoid GE for at least the mid-term as they are not even close to stable yet. Shedding businesses left and right and trying to stabalize their core business at that. The dividend will likely be eliminated at some point.

[oldtom01]

As I said it's a very small and experimental part of my over-all portfolio. A learn by doing thing.

I asked this question here because Jacob and others here seem to take the DoD seriously as an investment strategy for beginners.

The question about GE vis-a-vis DOD is not about whether or not GE is a stupid or non-stupid investment. Legalistically speaking, the whole point of DoD is to buy the 10 stocks and hold for 1 year regardless of an individual stock's moves, right?

GE however, by being dropped from the Dow itself presents a question since you are no longer holding a Dog of the *DOW*, you're just holding a dog .

Ultimately I plan to go ahead and hold until the end of the year and then sell.