The Single Best Investment: Creating Wealth with Dividend Growth by Lowell Miller

Author:Lowell Miller [Miller, Lowell]
Language: eng
Format: azw3, pdf
Publisher: Print Project
Published: 1999-04-29T16:00:00+00:00

Figure 7-2

Figure 7-3

Praxair, a producer of industrial gases, showed miserable relative performance from 1997 through 2000 (A), despite the fact the dividends (B) and earnings (C) rose steadily through the period. This extreme disconnect between fundamentals and stock price would have proved frustrating indeed to any investor who didn’t make use of a technical “road map,” for it took four years until value emerged victorious. By using technicals as a guide, though, you could wait for relative strength to change course (D)—in this case accompanied by the plus factor of healthy relative volume (E). After all, who wants to hold a stock whose notable momentum characteristic is relative weakness when there are so many qualifying candidates exhibiting relative strength?

The prior period of relative weakness almost seems to be a time of pressure buildup for many stocks, and when the pressure’s off they can substantially outperform. The weak period often represents a time of investor skepticism—much of PX’s business is “old economy” and investors were generally cautious regarding the real, the rational, the time-tested, the necessary, during that period of the late nineties. But when skepticism turns to love it can be passionate and symphonic.

While the “formula” of requiring at least six months of underperformance coupled with a present indication of higher relative strength is the single most preferred pattern for buying the kind of stock we’re after, reality is not always so neat that it will present you with ideal situations just when you’re ready to invest.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.