dogs of the Dow

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pages: 295 words: 66,824

A Mathematician Plays the Stock Market by John Allen Paulos

Alan Greenspan, AOL-Time Warner, Benoit Mandelbrot, Black-Scholes formula, book value, Brownian motion, business climate, business cycle, butter production in bangladesh, butterfly effect, capital asset pricing model, confounding variable, correlation coefficient, correlation does not imply causation, Daniel Kahneman / Amos Tversky, diversified portfolio, dogs of the Dow, Donald Trump, double entry bookkeeping, Elliott wave, endowment effect, equity risk premium, Erdős number, Eugene Fama: efficient market hypothesis, four colour theorem, George Gilder, global village, greed is good, index fund, intangible asset, invisible hand, Isaac Newton, it's over 9,000, John Bogle, John Nash: game theory, Larry Ellison, Long Term Capital Management, loss aversion, Louis Bachelier, mandelbrot fractal, margin call, mental accounting, Myron Scholes, Nash equilibrium, Network effects, passive investing, Paul Erdős, Paul Samuelson, Plato's cave, Ponzi scheme, power law, price anchoring, Ralph Nelson Elliott, random walk, Reminiscences of a Stock Operator, Richard Thaler, risk free rate, Robert Shiller, short selling, six sigma, Stephen Hawking, stocks for the long run, survivorship bias, transaction costs, two and twenty, ultimatum game, UUNET, Vanguard fund, Yogi Berra

Brian auditors Aumann, Robert availability error average values compared with distribution of incomes risk as variance from averages average return compared with median return average value compared with distribution of incomes buy-sell rules and outguessing average guess risk as variance from average value averaging down Bachelier, Louis Bak, Per Barabasi, Albert-Lazló Bartiromo, Maria bear markets investor self-descriptions and shorting and distorting strategy in Benford, Frank Benford’s Law applying to corporate fraud background of frequent occurrence of numbers governed by Bernoulli, Daniel Beta (B) values causes of variations in comparing market against individual stocks or funds strengths and weaknesses of technique for finding volatility and Big Bang billiards, as example of nonlinear system binary system biorhythm theory Black, Fischer Black-Scholes option formula blackjack strategies Blackledge, Todd “blow up,” investor blue chip companies, P/E ratio of Bogle, John bonds Greenspan’s impact on bond market history of stocks outperforming will not necessarily continue to be outperformed by stocks Bonds, Barry bookkeeping. see accounting practices bottom-line investing Brock, William brokers. see stock brokers Buffett, Warren bull markets investor self-descriptions and pump and dump strategy in Butterfly Economics (Ormerod) “butterfly effect,” of nonlinear systems buy-sell rules buying on the margin. see also margin investments calendar effects call options. see also stock options covering how they work selling strategies valuation tools campaign contributions Capital Asset Pricing Model capital gains vs. dividends Central Limit Theorem CEOs arrogance of benefits in manipulating stock prices remuneration compared with that of average employee volatility due to malfeasance of chain letters Chaitin, Gregory chance. see also whim trading strategies and as undeniable factor in market chaos theory. see also nonlinear systems charity Clayman, Michelle cognitive illusions availability error confirmation bias heuristics rules of thumb for saving time mental accounts status quo bias Cohen, Abby Joseph coin flipping common knowledge accounting scandals and definition and importance to investors dynamic with private knowledge insider trading and parable illustrating private information becoming companies/corporations adjusting results to meet expectations applying Benford’s Law to corporate fraud comparing corporate and personal accounting financial health and P/E ratio of blue chips competition vs. cooperation, prisoner’s dilemma complexity changing over time horizon of sequences (mathematics) of trading strategies compound interest as basis of wealth doubling time and formulas for future value and present value and confirmation bias definition of investments reflecting stock-picking and connectedness. see also networks European market causing reaction on Wall Street interactions based on whim interactions between technical traders and value traders irrational interactions between traders Wolfram model of interactions between traders Consumer Confidence Index (CCI) contrarian investing dogs of the Dow measures of excellence and rate of return and cooperation vs. competition, prisoner’s dilemma correlation coefficient. see also statistical correlations counter-intuitive investment counterproductive behavior, psychology of covariance calculation of portfolio diversification based on portfolio volatility and stock selection and Cramer, James crowd following or not herd-like nature of price movements dart throwing, stock-picking contest in the Wall Street Journal data mining illustrated by online chatrooms moving averages and survivorship bias and trading strategies and DeBondt, Werner Deciding What’s News (Gans) decimalization reforms decision making minimizing regret selling WCOM depression of derivatives trading, Enron despair and guilt over market losses deviation from the mean. see also mean value covariance standard deviation (d) variance dice, probability and Digex discounting process, present value of future money distribution of incomes distribution of wealth dynamic of concentration UN report on diversified portfolios. see stock portfolios, diversifying dividends earnings and proposals benefitting returns from Dodd, David dogs of the Dow strategy “dominance” principle, game theory dot com IPOs, as a pyramid scheme double-bottom trend reversal “double-dip” recession double entry bookkeeping doubling time, compound interest and Dow dogs of the Dow strategy percentages of gains and losses e (exponential growth) compound interest and higher mathematics and earnings anchoring effect and complications with determination of inflating (WCOM) P/E ratio and stock valuation and East, Steven H.

Investors sign on too quickly to the hype surrounding fast-growing companies and underestimate the prospects of solid, if humdrum companies of the type that Warren Buffett likes—Coca-Cola, for instance. (I write this in a study littered with empty cans of Diet Coke.) The appeal of value investing tends to be contrarian, and many of the strategies derived from fundamental analysis reflect this. The “dogs of the Dow” strategy counsels investors to buy the ten Dow stocks (among the thirty stocks that go into the Dow-Jones Industrial Average) whose price-to-dividend, P/D, ratios are the lowest. Dividends are not earnings, but the strategy corresponds very loosely to buying the ten stocks with the lowest P/E ratios.

Brian auditors Aumann, Robert availability error average values compared with distribution of incomes risk as variance from averages average return compared with median return average value compared with distribution of incomes buy-sell rules and outguessing average guess risk as variance from average value averaging down Bachelier, Louis Bak, Per Barabasi, Albert-Lazló Bartiromo, Maria bear markets investor self-descriptions and shorting and distorting strategy in Benford, Frank Benford’s Law applying to corporate fraud background of frequent occurrence of numbers governed by Bernoulli, Daniel Beta (B) values causes of variations in comparing market against individual stocks or funds strengths and weaknesses of technique for finding volatility and Big Bang billiards, as example of nonlinear system binary system biorhythm theory Black, Fischer Black-Scholes option formula blackjack strategies Blackledge, Todd “blow up,” investor blue chip companies, P/E ratio of Bogle, John bonds Greenspan’s impact on bond market history of stocks outperforming will not necessarily continue to be outperformed by stocks Bonds, Barry bookkeeping. see accounting practices bottom-line investing Brock, William brokers. see stock brokers Buffett, Warren bull markets investor self-descriptions and pump and dump strategy in Butterfly Economics (Ormerod) “butterfly effect,” of nonlinear systems buy-sell rules buying on the margin. see also margin investments calendar effects call options. see also stock options covering how they work selling strategies valuation tools campaign contributions Capital Asset Pricing Model capital gains vs. dividends Central Limit Theorem CEOs arrogance of benefits in manipulating stock prices remuneration compared with that of average employee volatility due to malfeasance of chain letters Chaitin, Gregory chance. see also whim trading strategies and as undeniable factor in market chaos theory. see also nonlinear systems charity Clayman, Michelle cognitive illusions availability error confirmation bias heuristics rules of thumb for saving time mental accounts status quo bias Cohen, Abby Joseph coin flipping common knowledge accounting scandals and definition and importance to investors dynamic with private knowledge insider trading and parable illustrating private information becoming companies/corporations adjusting results to meet expectations applying Benford’s Law to corporate fraud comparing corporate and personal accounting financial health and P/E ratio of blue chips competition vs. cooperation, prisoner’s dilemma complexity changing over time horizon of sequences (mathematics) of trading strategies compound interest as basis of wealth doubling time and formulas for future value and present value and confirmation bias definition of investments reflecting stock-picking and connectedness. see also networks European market causing reaction on Wall Street interactions based on whim interactions between technical traders and value traders irrational interactions between traders Wolfram model of interactions between traders Consumer Confidence Index (CCI) contrarian investing dogs of the Dow measures of excellence and rate of return and cooperation vs. competition, prisoner’s dilemma correlation coefficient. see also statistical correlations counter-intuitive investment counterproductive behavior, psychology of covariance calculation of portfolio diversification based on portfolio volatility and stock selection and Cramer, James crowd following or not herd-like nature of price movements dart throwing, stock-picking contest in the Wall Street Journal data mining illustrated by online chatrooms moving averages and survivorship bias and trading strategies and DeBondt, Werner Deciding What’s News (Gans) decimalization reforms decision making minimizing regret selling WCOM depression of derivatives trading, Enron despair and guilt over market losses deviation from the mean. see also mean value covariance standard deviation (d) variance dice, probability and Digex discounting process, present value of future money distribution of incomes distribution of wealth dynamic of concentration UN report on diversified portfolios. see stock portfolios, diversifying dividends earnings and proposals benefitting returns from Dodd, David dogs of the Dow strategy “dominance” principle, game theory dot com IPOs, as a pyramid scheme double-bottom trend reversal “double-dip” recession double entry bookkeeping doubling time, compound interest and Dow dogs of the Dow strategy percentages of gains and losses e (exponential growth) compound interest and higher mathematics and earnings anchoring effect and complications with determination of inflating (WCOM) P/E ratio and stock valuation and East, Steven H.


pages: 416 words: 118,592

A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing by Burton G. Malkiel

accounting loophole / creative accounting, Alan Greenspan, Albert Einstein, asset allocation, asset-backed security, backtesting, Bear Stearns, beat the dealer, Bernie Madoff, book value, BRICs, butter production in bangladesh, buy and hold, capital asset pricing model, compound rate of return, correlation coefficient, Credit Default Swap, Daniel Kahneman / Amos Tversky, diversification, diversified portfolio, dogs of the Dow, Edward Thorp, Elliott wave, Eugene Fama: efficient market hypothesis, experimental subject, feminist movement, financial engineering, financial innovation, fixed income, framing effect, hindsight bias, Home mortgage interest deduction, index fund, invisible hand, Isaac Newton, Japanese asset price bubble, John Bogle, junk bonds, Long Term Capital Management, loss aversion, low interest rates, margin call, market bubble, Mary Meeker, money market fund, mortgage tax deduction, new economy, Own Your Own Home, PalmPilot, passive investing, Paul Samuelson, pets.com, Ponzi scheme, price stability, profit maximization, publish or perish, purchasing power parity, RAND corporation, random walk, Richard Thaler, risk free rate, risk tolerance, risk-adjusted returns, risk/return, Robert Shiller, short selling, Silicon Valley, South Sea Bubble, stock buybacks, stocks for the long run, sugar pill, survivorship bias, The Myth of the Rational Market, the rule of 72, The Wisdom of Crowds, transaction costs, Vanguard fund, zero-coupon bond

James O’Shaughnessy tested the theory as far back as the 1920s; he found that the Dogs of the Dow had beaten the overall index by over 2 percentage points per year with no additional risk. The canine contingent of Wall Street analysts raised their ears and marketed many mutual funds based on the principle. By the mid-1990s, more than $20 billion of investment-fund dollars were placed in Dogs of the Dow funds sold by such prestigious firms as Morgan Stanley, Dean Witter, and Merrill Lynch. And then, just as might be expected, success bit the dogs. The Dogs of the Dow consistently underperformed the overall market. As the “Dogs” star Michael O’Higgins opined, “the strategy became too popular” and ultimately self-destructed.

POTSHOTS THAT COMPLETELY MISS THE TARGET Some attempts to discredit the unpredictability of the market are so ridiculous that perhaps they should earn the sobriquet of “greater fool” theories. Among these are the Super Bowl and the Hemline indicators, both described in chapter 6. Under close examination, other picturesque potshots also misfire completely. These include the Dogs of the Dow, the January Effect, the “Thank God It’s Monday Afternoon” Pattern, and the Hot News Response. Dogs of the Dow This interesting strategy capitalized on a general contrarian conviction that out-of-favor stocks eventually tend to reverse direction. The strategy entailed buying each year the ten stocks in the Dow Jones 30-Stock Industrial Average that had the highest dividend yields.

If You Do Trade: Sell Losers, Not Winners 4. Other Stupid Investor Tricks Does Behavioral Finance Teach Ways to Beat the Market? 11. POTSHOTS AT THE EFFICIENT-MARKET THEORY AND WHY THEY MISS What Do We Mean by Saying Markets Are Efficient? Potshots That Completely Miss the Target Dogs of the Dow January Effect “Thank God It’s Monday Afternoon” Pattern Hot News Response Why the Aim Is So Bad Potshots That Get Close but Still Miss the Target The Trend Is Your Friend (Otherwise Known as Short-Term Momentum) The Dividend Jackpot Approach The Initial P/E Predictor The “Back We Go Again” Strategy (Otherwise Known as Long-Run Return Reversals) The “Smaller Is Better” Effect The “Value Will Win” Record Stocks with Low Price-Earnings Multiples Outperform Those with High Multiples Stocks That Sell at Low Multiples of Their Book Values Tend to Produce Higher Subsequent Returns Does “Value” Really Trump Growth on a Consistent Basis?


pages: 482 words: 121,672

A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing (Eleventh Edition) by Burton G. Malkiel

accounting loophole / creative accounting, Alan Greenspan, Albert Einstein, asset allocation, asset-backed security, beat the dealer, Bernie Madoff, bitcoin, book value, butter production in bangladesh, buttonwood tree, buy and hold, capital asset pricing model, compound rate of return, correlation coefficient, Credit Default Swap, Daniel Kahneman / Amos Tversky, Detroit bankruptcy, diversification, diversified portfolio, dogs of the Dow, Edward Thorp, Elliott wave, equity risk premium, Eugene Fama: efficient market hypothesis, experimental subject, feminist movement, financial engineering, financial innovation, financial repression, fixed income, framing effect, George Santayana, hindsight bias, Home mortgage interest deduction, index fund, invisible hand, Isaac Newton, Japanese asset price bubble, John Bogle, junk bonds, Long Term Capital Management, loss aversion, low interest rates, margin call, market bubble, Mary Meeker, money market fund, mortgage tax deduction, new economy, Own Your Own Home, PalmPilot, passive investing, Paul Samuelson, pets.com, Ponzi scheme, price stability, profit maximization, publish or perish, purchasing power parity, RAND corporation, random walk, Richard Thaler, risk free rate, risk tolerance, risk-adjusted returns, risk/return, Robert Shiller, Salesforce, short selling, Silicon Valley, South Sea Bubble, stock buybacks, stocks for the long run, sugar pill, survivorship bias, Teledyne, the rule of 72, The Wisdom of Crowds, transaction costs, Vanguard fund, zero-coupon bond, zero-sum game

James O’Shaughnessy tested the theory as far back as the 1920s; he found that the Dogs of the Dow had beaten the overall index by over 2 percentage points per year with no additional risk. Members of the canine contingent of Wall Street analysts raised their ears and marketed billions of dollars of mutual funds on the basis of the principle. And then, just as might be expected, success bit the dogs. The Dogs of the Dow consistently underperformed the overall market. As the Dogs star O’Higgins opined, “the strategy became too popular” and ultimately self-destructed. The Dogs of the Dow no longer hunt. January Effect A number of researchers have found that January has been a very unusual month for stock-market returns.

Some More Elaborate Technical Systems The Filter System The Dow Theory The Relative-Strength System Price-Volume Systems Reading Chart Patterns Randomness Is Hard to Accept A Gaggle of Other Technical Theories to Help You Lose Money The Hemline Indicator The Super Bowl Indicator The Odd-Lot Theory Dogs of the Dow January Effect A Few More Systems Technical Market Gurus Why Are Technicians Still Hired? Appraising the Counterattack Implications for Investors 7. HOW GOOD IS FUNDAMENTAL ANALYSIS? THE EFFICIENT-MARKET HYPOTHESIS The Views from Wall Street and Academia Are Security Analysts Fundamentally Clairvoyant?

It turns out that the odd-lotter isn’t such a stupendous dodo after all. A little stupid? Maybe. There is some indication that the performance of odd-lotters might be slightly worse than the stock averages. However, the available evidence indicates that knowledge of odd-lotters’ actions is not useful for the formulation of investment strategies. Dogs of the Dow This interesting strategy capitalized on a general contrarian conviction that out-of-favor stocks eventually tend to reverse direction. The strategy entailed buying each year the ten stocks in the Dow Jones 30-Stock Industrial Average that had the highest dividend yields. The idea was that these ten stocks were the most out of favor, so they typically had low price-earnings multiples and low price-to-book-value ratios as well.


Stocks for the Long Run, 4th Edition: The Definitive Guide to Financial Market Returns & Long Term Investment Strategies by Jeremy J. Siegel

addicted to oil, Alan Greenspan, asset allocation, backtesting, behavioural economics, Black-Scholes formula, book value, Bretton Woods, business cycle, buy and hold, buy low sell high, California gold rush, capital asset pricing model, cognitive dissonance, compound rate of return, correlation coefficient, currency risk, Daniel Kahneman / Amos Tversky, diversification, diversified portfolio, dividend-yielding stocks, dogs of the Dow, equity premium, equity risk premium, Eugene Fama: efficient market hypothesis, Everybody Ought to Be Rich, fixed income, German hyperinflation, implied volatility, index arbitrage, index fund, Isaac Newton, it's over 9,000, John Bogle, joint-stock company, Long Term Capital Management, loss aversion, machine readable, market bubble, mental accounting, Money creation, Myron Scholes, new economy, oil shock, passive investing, Paul Samuelson, popular capitalism, prediction markets, price anchoring, price stability, proprietary trading, purchasing power parity, random walk, Richard Thaler, risk free rate, risk tolerance, risk/return, Robert Shiller, Ronald Reagan, shareholder value, short selling, South Sea Bubble, stock buybacks, stocks for the long run, subprime mortgage crisis, survivorship bias, technology bubble, The Great Moderation, The Wisdom of Crowds, transaction costs, tulip mania, uptick rule, Vanguard fund, vertical integration

CHAPTER 9 Outperforming the Market TABLE 147 9–2 S&P 500 Stocks Sorted by Dividend Yield Dividend Yield Geometric Return Highest High Middle Low Lowest S&P 500 14.22% 13.11% 10.55% 9.79% 9.69% 11.13% Arithmetic Return 15.71% 14.24% 11.71% 11.35% 12.20% 12.39% Standard Deviation Beta Excess Return over CAPM 18.81% 16.22% 16.02% 18.21% 23.17% 16.52% 0.9336 0.8559 0.9085 1.0460 1.2130 1.0000 3.78% 2.86% -0.04% -1.36% -1.68% 0.00% Other Dividend Yield Strategies There are other high-dividend-yield strategies that have outperformed the market. A well-known one is called the “Dogs of the Dow,” or the “Dow 10” strategy, and is chosen from high-yielding stocks in the Dow Jones Industrial Average. The Dow 10 strategy has been regarded by some as one of the simplest and most successful investment strategies of all time. James Glassman of the Washington Post claimed that John Slatter, a Cleveland investment advisor and writer, invented the Dow 10 system in the 1980s.13 Harvey Knowles and Damon Petty popularized the strategy in their book The Dividend Investor, written in 1992, as did Michael O’Higgins and John Downes in Beating the Dow.

The strategy calls for investors at year-end to buy the 10 highestyielding stocks in the Dow Jones Industrial Average and to hold them for the subsequent year and then repeat the process each December 31. These high-yielding stocks are often those that have fallen in price and are out of favor with investors. For this reason the Dow 10 strategy is often called the “Dogs of the Dow.” Another natural extension of the Dow 10 strategy is to choose the 10 highest-yielding stocks from among the 100 largest stocks in the S&P 500. The 100 largest stocks in the S&P 500 Index comprise a much higher percentage of the entire U.S. market than the 30 stocks in the Dow Jones Industrial Average. 13 John R.

People extrapolate recent trends in stock prices too far in the future. Although there is some evidence that short-term momentum is positive in stock returns, over the longer term many stocks that have done poorly outperform, and stocks that have done well underperform. Another strategy based on out-of-favor stocks is called the Dogs of the Dow or the Dow 10 strategy.32 Dave: There has been so much to absorb from today’s session. It seems like I fell into almost all of these behavioral traps. The comforting news is that I’m not alone and that your counseling has helped other investors. 32 This strategy is discussed in great detail in Chapter 9.


pages: 517 words: 139,477

Stocks for the Long Run 5/E: the Definitive Guide to Financial Market Returns & Long-Term Investment Strategies by Jeremy Siegel

Alan Greenspan, AOL-Time Warner, Asian financial crisis, asset allocation, backtesting, banking crisis, Bear Stearns, behavioural economics, Black Monday: stock market crash in 1987, Black-Scholes formula, book value, break the buck, Bretton Woods, business cycle, buy and hold, buy low sell high, California gold rush, capital asset pricing model, carried interest, central bank independence, cognitive dissonance, compound rate of return, computer age, computerized trading, corporate governance, correlation coefficient, Credit Default Swap, currency risk, Daniel Kahneman / Amos Tversky, Deng Xiaoping, discounted cash flows, diversification, diversified portfolio, dividend-yielding stocks, dogs of the Dow, equity premium, equity risk premium, Eugene Fama: efficient market hypothesis, eurozone crisis, Everybody Ought to Be Rich, Financial Instability Hypothesis, fixed income, Flash crash, forward guidance, fundamental attribution error, Glass-Steagall Act, housing crisis, Hyman Minsky, implied volatility, income inequality, index arbitrage, index fund, indoor plumbing, inflation targeting, invention of the printing press, Isaac Newton, it's over 9,000, John Bogle, joint-stock company, London Interbank Offered Rate, Long Term Capital Management, loss aversion, machine readable, market bubble, mental accounting, Minsky moment, Money creation, money market fund, mortgage debt, Myron Scholes, new economy, Northern Rock, oil shock, passive investing, Paul Samuelson, Peter Thiel, Ponzi scheme, prediction markets, price anchoring, price stability, proprietary trading, purchasing power parity, quantitative easing, random walk, Richard Thaler, risk free rate, risk tolerance, risk/return, Robert Gordon, Robert Shiller, Ronald Reagan, shareholder value, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, stocks for the long run, survivorship bias, technology bubble, The Great Moderation, the payments system, The Wisdom of Crowds, transaction costs, tulip mania, Tyler Cowen, Tyler Cowen: Great Stagnation, uptick rule, Vanguard fund

The annual return of the 100 highest dividend yielders in the S&P 500 Index since the index was founded in 1957 was 3.42 percentage points per year above what would have been predicted by the efficient market model, while the return of the 100 lowest dividend yielders would have had a return that was 2.58 percentage points per year lower. Other Dividend-Yield Strategies There are other high-dividend-yield strategies that have outperformed the market. A well-known one is called the “Dogs of the Dow,” or the “Dow 10” strategy, and is chosen from high-yielding stocks in the Dow Jones Industrial Average. The Dow 10 strategy has been regarded by some as one of the simplest and most successful investment strategies of all time. James Glassman of the Washington Post claimed that John Slatter, a Cleveland investment advisor and writer, invented the Dow 10 system in the 1980s.14 Harvey Knowles and Damon Petty popularized the strategy in their book The Dividend Investor, written in 1992, as did Michael O’Higgins and John Downes in Beating the Dow.

The strategy calls for investors at year-end to buy the 10 highest-yielding stocks in the Dow Jones Industrial Average and to hold them for the subsequent year and then repeat the process each December 31. These high-yielding stocks are often those that have fallen in price and are out of favor with investors—which is the reason the strategy is often called the Dogs of the Dow. Another natural extension of the Dow 10 strategy is to choose the 10 highest-yielding stocks from among the 100 largest stocks in the S&P 500. The 100 largest stocks in the S&P 500 Index compose a much higher percentage of the entire U.S. market than the 30 stocks in the Dow Jones Industrial Average.

People extrapolate recent trends in stock prices too far into the future. Although there is some evidence that short-term momentum is positive in stock returns, over the longer term many stocks that have done poorly outperform, and stocks that have done well underperform. Another strategy based on out-of-favor stocks is called the Dogs of the Dow or the Dow 10 strategy.34 Dave: There has been so much to absorb from today’s session. It seems like I fell into almost all of these behavioral traps. The comforting news is that I’m not alone and that your counseling has helped other investors. IC: Not only have they been helped, but they have also prospered.


pages: 348 words: 83,490

More Than You Know: Finding Financial Wisdom in Unconventional Places (Updated and Expanded) by Michael J. Mauboussin

Alan Greenspan, Albert Einstein, Andrei Shleifer, Atul Gawande, availability heuristic, beat the dealer, behavioural economics, Benoit Mandelbrot, Black Swan, Brownian motion, butter production in bangladesh, buy and hold, capital asset pricing model, Clayton Christensen, clockwork universe, complexity theory, corporate governance, creative destruction, Daniel Kahneman / Amos Tversky, deliberate practice, demographic transition, discounted cash flows, disruptive innovation, diversification, diversified portfolio, dogs of the Dow, Drosophila, Edward Thorp, en.wikipedia.org, equity premium, equity risk premium, Eugene Fama: efficient market hypothesis, fixed income, framing effect, functional fixedness, hindsight bias, hiring and firing, Howard Rheingold, index fund, information asymmetry, intangible asset, invisible hand, Isaac Newton, Jeff Bezos, John Bogle, Kenneth Arrow, Laplace demon, Long Term Capital Management, loss aversion, mandelbrot fractal, margin call, market bubble, Menlo Park, mental accounting, Milgram experiment, Murray Gell-Mann, Nash equilibrium, new economy, Paul Samuelson, Performance of Mutual Funds in the Period, Pierre-Simon Laplace, power law, quantitative trading / quantitative finance, random walk, Reminiscences of a Stock Operator, Richard Florida, Richard Thaler, Robert Shiller, shareholder value, statistical model, Steven Pinker, stocks for the long run, Stuart Kauffman, survivorship bias, systems thinking, The Wisdom of Crowds, transaction costs, traveling salesman, value at risk, wealth creators, women in the workforce, zero-sum game

Petersburg and Growth Stock Investing Integrating the Outliers Chapter 33 - The Janitor’s Dream Beyond Newton Sorting Systems The Stock Market as a Complex Adaptive System Using What You’ve Got Chapter 34 - Chasing Laplace’s Demon Evolution Made Me Do It Laplace’s Demon Interpreting the Market Investor Risks Chapter 35 - More Power to You Zipf It The More Things Change . . . Catch the Power Chapter 36 - The Pyramid of Numbers Firm Size, Growth Rates, and Valuation Why Big Fierce Animals Are Rare Find Your Niche Dear CEO: We’ve Made It to the Fortune 50! You’re Fired Extrapolative Expectations Chapter 37 - Turn Tale Hush Puppies and Dogs of the Dow Ah Choo Economists, Meet Mr. Market No Progress in Human Nature Maintain Perspective Chapter 38 - Stairway to Shareholder Heaven I Could Do That Stairway to Shareholder Heaven Making the Art Less Abstract Order and Disorder Conclusion NOTES References Further Reading INDEX Copyright Page A balanced perspective cannot be acquired by studying disciplines in pieces but through pursuit of the consilience among them.

Indeed, while mostly avoiding investments in more stocks, Mr. Flynn has been driving to a casino in nearby Connecticut every Monday to play blackjack and poker. “I do better there than I do in the market,” notes Mr. Flynn. —“At Cape Cod Barber Shop, Slumping Stocks Clip Buzz,” The Wall Street Journal, July 8, 2002 Hush Puppies and Dogs of the Dow Sales of Hush Puppies, the nerdish suede shoes with crepe soles, hovered around 30,000 pairs in 1994. Indeed, the manufacturer of the once-popular shoes was considering phasing them out. But then, something remarkable happened: Hush Puppies suddenly became hip in downtown Manhattan. Sales of classic Hush Puppies reached 430,000 pairs in 1995 and over 1.7 million in 1996.


pages: 303 words: 84,023

Heads I Win, Tails I Win by Spencer Jakab

Alan Greenspan, Asian financial crisis, asset allocation, backtesting, Bear Stearns, behavioural economics, Black Monday: stock market crash in 1987, book value, business cycle, buy and hold, collapse of Lehman Brothers, correlation coefficient, crowdsourcing, Daniel Kahneman / Amos Tversky, diversification, dividend-yielding stocks, dogs of the Dow, Elliott wave, equity risk premium, estate planning, Eugene Fama: efficient market hypothesis, eurozone crisis, Everybody Ought to Be Rich, fear index, fixed income, geopolitical risk, government statistician, index fund, Isaac Newton, John Bogle, John Meriwether, Long Term Capital Management, low interest rates, Market Wizards by Jack D. Schwager, Mexican peso crisis / tequila crisis, money market fund, Myron Scholes, PalmPilot, passive investing, Paul Samuelson, pets.com, price anchoring, proprietary trading, Ralph Nelson Elliott, random walk, Reminiscences of a Stock Operator, risk tolerance, risk-adjusted returns, Robert Shiller, robo advisor, Savings and loan crisis, Sharpe ratio, short selling, Silicon Valley, South Sea Bubble, statistical model, Steve Jobs, subprime mortgage crisis, survivorship bias, technology bubble, transaction costs, two and twenty, VA Linux, Vanguard fund, zero-coupon bond, zero-sum game

There are exchange-traded funds that buy spin-offs exclusively, and an index tracking their performance has existed since December 2006. As of this writing it has appreciated nearly 94 percent compared to just 50 percent for the broad stock market. Another long-running, well-known, yet still successful way to profit from what’s out of favor on Wall Street is to buy the “Dogs of the Dow” each January—the ten highest dividend-yielding stocks among the thirty Dow Jones Industrials. These were usually relatively poor performers in the previous year, allowing their dividend yields to rise (as price falls, yield rises as long as payouts are unchanged). Such a strategy pursued over forty-six years produced nearly three percentage points of excess return compared to the index alone.

See also alpha (excess return); returns market timing, 3, 30–31, 33, 39, 41–47, 50, 52–56, 58–61, 63, 85, 94, 111, 125 Marketocracy, 225 Markowitz, Harry, 81 Mauboussin, Andrew, 102 Mauboussin, Michael, 99, 101–2, 159–60, 222 McCann, Craig, 202–3 McCrum, Dan, 201–3 McKinsey study, 140 mean variance optimization, 81 media, 152, 186, 199, 229 contrarian articles of, 237–38 and fund managers, 109–10, 116 journalists, 29, 47, 58–60, 99–100, 117–18, 120, 140, 193, 211, 255 and market bloodbaths, 45–47, 60 and market forecasters, 121, 124 report on analysts, 118–20 report on economists, 143–44 scary headlines of, 45–47, 60, 62, 64, 135–36, 232, 234, 237–38, 240, 249 See also specific publications; television shows/stations Meriwether, John, 165, 168–69 Merrill Lynch, 88, 126, 145 Mexico, 86–87 Michaely, Roni, 134–35 Microsoft, 183–84 Miller, Bill, 97–101, 103–5, 109–12, 116, 160, 168, 172 money market funds, 80 Monte Carlo simulation, 77 Morgan Stanley, 131, 181 Morningstar, 78, 105, 150–53, 174–75 mortgage loans, 100–101. See also subprime mortgage loans mutual funds, 32, 69, 102, 112, 137, 149, 221 actively managed, 79, 149–57, 159–60, 174 and “Dogs of the Dow,” 192 and hedge funds, 170, 173–75, 235 and high fees, 149–50, 153, 155–56, 174, 188 high-performing, 111, 151–52, 154 lag the market, 26, 126, 159 losses in, 33, 115, 152 low-cost, 82 origins of, 156–57 passive, 151–53 poor performing, 13, 154–55, 159, 175 ranking of, 150–52 and stock purchases/sales, 60–61, 115–16 successful managers of, 99, 111 See also Vanguard Group MyPlanIQ, 79–80, 83 Nasdaq Composite, 37, 46 National Bureau of Economic Research, 49–50 Ned Davis Research, 89, 226–27 Nenner, Charles, 121–23, 143 Neuberger Berman, 233 Neuberger, Roy, 233 New Century Financial, 198–200 New York Stock Exchange, 182, 233 New York Times, 29, 154 Newsweek, 237 Newton, Isaac, 41 Niederhoffer, Victor, 168–69 Ninja Trading Service, 211 notes, 204–7.


Investment: A History by Norton Reamer, Jesse Downing

activist fund / activist shareholder / activist investor, Alan Greenspan, Albert Einstein, algorithmic trading, asset allocation, backtesting, banking crisis, Bear Stearns, behavioural economics, Berlin Wall, Bernie Madoff, book value, break the buck, Brownian motion, business cycle, buttonwood tree, buy and hold, California gold rush, capital asset pricing model, Carmen Reinhart, carried interest, colonial rule, Cornelius Vanderbilt, credit crunch, Credit Default Swap, Daniel Kahneman / Amos Tversky, debt deflation, discounted cash flows, diversified portfolio, dogs of the Dow, equity premium, estate planning, Eugene Fama: efficient market hypothesis, Fall of the Berlin Wall, family office, Fellow of the Royal Society, financial innovation, fixed income, flying shuttle, Glass-Steagall Act, Gordon Gekko, Henri Poincaré, Henry Singleton, high net worth, impact investing, index fund, information asymmetry, interest rate swap, invention of the telegraph, James Hargreaves, James Watt: steam engine, John Bogle, joint-stock company, Kenneth Rogoff, labor-force participation, land tenure, London Interbank Offered Rate, Long Term Capital Management, loss aversion, Louis Bachelier, low interest rates, managed futures, margin call, means of production, Menlo Park, merger arbitrage, Michael Milken, money market fund, moral hazard, mortgage debt, Myron Scholes, negative equity, Network effects, new economy, Nick Leeson, Own Your Own Home, Paul Samuelson, pension reform, Performance of Mutual Funds in the Period, Ponzi scheme, Post-Keynesian economics, price mechanism, principal–agent problem, profit maximization, proprietary trading, quantitative easing, RAND corporation, random walk, Renaissance Technologies, Richard Thaler, risk free rate, risk tolerance, risk-adjusted returns, risk/return, Robert Shiller, Sand Hill Road, Savings and loan crisis, seminal paper, Sharpe ratio, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, spinning jenny, statistical arbitrage, survivorship bias, tail risk, technology bubble, Teledyne, The Wealth of Nations by Adam Smith, time value of money, tontine, too big to fail, transaction costs, two and twenty, underbanked, Vanguard fund, working poor, yield curve

Other work that has sought to shake the foundations of the efficient market hypothesis has centered on predicting 254 Investment: A History returns using various stock characteristics, such as dividend yield and price-to-earnings ratio. The empirical evidence here is also mixed, with some studies advocating such strategies as “Dogs of the Dow” (or dividend-based yield strategies) as generating outsized returns followed by responses showing how this does not hold across all periods, how it may hold for only select aggregations of stocks, or again how one cannot predictably get excess returns by adhering to it. Where Drawer 3 Has Taken Us Perhaps the best way to characterize the effects of drawer 3 is to say it has produced monumentally powerful but often underutilized tools.

See also public debt decentralized management approaches, 7 deficit spending, 209–10 defined benefit plans: assets of, 113; liabilities and risks of, 122–23; regulations prohibiting too much stock ownership, 123; shift away from, 117, 295, 302 defined contribution plans, 113–14; growth of, 117, 122–23, 144, 295, 303; premature withdrawal fee for, 114 deflation, 198, 231 “Delta One,” 173 demand curve, 229–30 democratization of investment: accelerator of, 70; byproduct of, 291; definition of, 3; development of, 13, 318; impacts of, 139, 283, 296; links to, 120; manifestations of, 99, 116–17; origins of, 62–63; requirements of, 131; significance of, 7–8; story of, 97–98; success of, 147; theme of, 7, 98, 318; transition to, 61 420 Investment: A History Demosthenes, 24 Department of Labor, 275, 321 depository receipt, for government debt, 140 Depository Trust Company, 149 deregulation: of commission rate, 92; of savings and loan associations, 136 derivatives: leverage and, 214; opportunities with, 92; options pricing formula for, 235–36, 237; partial, 236; pricing, 230, 237; Samuelson on, 234–35; speculation in, 221 Deshima island, 48 Deutsche Börse, 95 Diamond Shamrock, 185–86 Diandang lending institution, 30 Dickens, Charles, 78 Dimmock, Stephen, 169–70 discounted cash flow models, 232–33 discovery, 332 Distilled Company, 181 Distilled Liquors, 164 distressed sales, 220 distressed turnaround operation, 19 diversification, 10; importance of, 229, 258, 319; risk and, 238–40 dividend discount model, of stock valuation, 232 Dodd, David, 250 Dodd-Frank Act, 194, 218, 220, 222 Dodson, James, 132 “Dogs of the Dow” strategies, 254 Dojima Rice Exchange, 45, 60 Donne, John, 121 Doriot, Georges, 274–75 doso (moneylenders), 31 dot-com bubble of 1999–2000, 213 Douglas, William, 166 Dow Jones UBS Commodity Index, 282 Drew, Daniel, 178–79 Drexel Burnham Lambert, 186 Duer, John, 175 Duer, William, 175–77 Dutch East India Company, 66, 85, 97 Dutch joint-stock companies, 64 dynamic hedging, 235–36 Easterlings, 65 East India Companies, 46–47, 49, 61, 69; British East India Company, 66, 326; Dutch East India Company, 66, 85, 97 Eccles, Marriner, 209 Ecclesiastes (Bible), 239 Ecloga laws, 52 economic expansion, 213–14 economies of scale, 75, 298 Economist, 302; Commodity-Price Index, 281 educational endowments, 124–25 Edward III (king of England), 44 Edward VI (king of England), 65 “Efficient Capital Markets: A Review of Theory and Empirical Work” (Fama), 249 efficient frontier, 241 efficient market hypothesis, 249–51, 253 Egypt: interest-free banking institutions in, 38; interest rates in, 23–24; lending in, 22–24 88888 account, 171 Einstein, Albert, 230 Eisenhower, Dwight D., 280 Elizabethan Act of 1571, 36 Employee Retirement Income Security Act (ERISA), 92, 112, 113, 282; impacts of, 292–93; rewriting of, 275 Index 421 endowments, 123–25, 145; educational, 124–25; in Greece and Rome, 56–57, 57; taxes and, 124; university, 257, 271, 296, 328 enforcement, improved, 147 England: Act of 1545, 36; banking in, 70, 73–75; joint-stock companies in, 64–66, 86; stock market in, 86–87; sugar consumption in, 75, 77 English Poor Law of 1601, 100 Enron, 68 Equitable Life Assurance Society, 132 equities markets, 114 equity index funds, 285 equity premium puzzle, 252–53 Erie Railway, 178–79 Erie War, 177–79 ERISA.


pages: 670 words: 194,502

The Intelligent Investor (Collins Business Essentials) by Benjamin Graham, Jason Zweig

3Com Palm IPO, accounting loophole / creative accounting, air freight, Alan Greenspan, Andrei Shleifer, AOL-Time Warner, asset allocation, book value, business cycle, buy and hold, buy low sell high, capital asset pricing model, corporate governance, corporate raider, Daniel Kahneman / Amos Tversky, diversified portfolio, dogs of the Dow, Eugene Fama: efficient market hypothesis, Everybody Ought to Be Rich, George Santayana, hiring and firing, index fund, intangible asset, Isaac Newton, John Bogle, junk bonds, Long Term Capital Management, low interest rates, market bubble, merger arbitrage, Michael Milken, money market fund, new economy, passive investing, price stability, Ralph Waldo Emerson, Richard Thaler, risk tolerance, Robert Shiller, Ronald Reagan, shareholder value, sharing economy, short selling, Silicon Valley, South Sea Bubble, Steve Jobs, stock buybacks, stocks for the long run, survivorship bias, the market place, the rule of 72, transaction costs, tulip mania, VA Linux, Vanguard fund, Y2K, Yogi Berra

See also specific company Dimson, Elroy direct purchase of stock directors discount brokerage houses Discover Brokerage diversification; and advice; and aggressive investors; and defensive investors; and delisted stocks; and formula trading; and; Graham’s disciples; importance of; and investment funds; and investments vs. speculation; and margin of safety; and market fluctuations; and security analysis dividends: academic criticism of; and advice; and bargains; cumulative or noncumulative; and earnings; and expectations for defensive investors; fixed; and formula trading; Graham’s comments about; and growth; and history and forecasting of stock market; inflation and; and investor-management relations; and margin of safety; and market fluctuations; overview about; and “payout ratio,”; and per-share earnings; and performance (1871–1970); and portfolio policy for aggressive investors; and portfolio policy for defensive investors; and price; proper stock; record of paying; reinvestment of; of secondary companies; and security analysis; special; and speculation; and stock selection for aggressive investors; and stock selection for defensive investors; stock split and; taxes on; total dollar amount of, by U.S. stocks; and volatility; who pays; Zweig’s comments about. See also yield; specific company or type of security Dixon, Richard Dodd, David; See also Security Analysis (Graham and Dodd) “Dogs of the Dow,” dollar-cost averaging, Dollar General stores Donaldson, Lufkin & Jenrette Donnelley (R.R.) & Sons dot.com stocks Double Click Inc. Dover Corp. Dow Chemical Co. Dow Jones Industrial Average (DJIA): aggressive investors and; and bargains; “best” stocks in; and comparison of four listed companies; defensive investors and; and dividend return on common stocks; in early 1970s; and expectations for investors; and formula trading; growth of; and growth stocks; and history and forecasting of stock market; inflation and; and investment funds; and market fluctuations; and per-share earnings; and Raskob’s prescription; rise of (1915–70); and security analysis; and selection of stocks; and unpopular large companies; yield of stocks (2003) on.

* Drexel Firestone, a Philadelphia investment bank, merged in 1973 with Burnham & Co. and later became Drexel Burnham Lambert, famous for its junk-bond financing of the 1980s takeover boom. † This strategy of buying the cheapest stocks in the Dow Jones Industrial Average is now nicknamed the “Dogs of the Dow” approach. Information on the “Dow 10” is available at www.djindexes.com/jsp/dow510Faq.jsp. * Among the steepest of the mountains recently made out of molehills: In May 1998, Pfizer Inc. and the U.S. Food and Drug Administration announced that six men taking Pfizer’s anti-impotence drug Viagra had died of heart attacks while having sex.


pages: 353 words: 88,376

The Investopedia Guide to Wall Speak: The Terms You Need to Know to Talk Like Cramer, Think Like Soros, and Buy Like Buffett by Jack (edited By) Guinan

Albert Einstein, asset allocation, asset-backed security, book value, Brownian motion, business cycle, business process, buy and hold, capital asset pricing model, clean water, collateralized debt obligation, computerized markets, correlation coefficient, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, discounted cash flows, diversification, diversified portfolio, dividend-yielding stocks, dogs of the Dow, equity premium, equity risk premium, fear index, financial engineering, fixed income, Glass-Steagall Act, implied volatility, index fund, intangible asset, interest rate swap, inventory management, inverted yield curve, junk bonds, London Interbank Offered Rate, low interest rates, margin call, money market fund, mortgage debt, Myron Scholes, passive investing, performance metric, risk free rate, risk tolerance, risk-adjusted returns, risk/return, shareholder value, Sharpe ratio, short selling, short squeeze, statistical model, time value of money, transaction costs, yield curve, zero-coupon bond

The Investopedia Guide to Wall Speak 315 Investopedia explains Value Stock A value investor believes that the stock market is often inefficient and that it is possible to find companies trading for less than what they actually may be worth. One popular way to identify value stocks is to check the “Dogs of the Dow” investing strategy: buying one of the 10 highest dividend-yielding stocks on the Dow Jones at the beginning of each year and adjusting it every year thereafter. Related Terms: • Earnings • Price-to-Book Ratio—P/B Ratio • Value Investing • Growth Stock • Style Variable Cost What Does Variable Cost Mean?


pages: 346 words: 102,625

Early Retirement Extreme by Jacob Lund Fisker

8-hour work day, active transport: walking or cycling, barriers to entry, book value, buy and hold, caloric restriction, caloric restriction, clean water, Community Supported Agriculture, delayed gratification, discounted cash flows, diversification, dogs of the Dow, don't be evil, dumpster diving, Easter island, fake it until you make it, financial engineering, financial independence, game design, index fund, invention of the steam engine, inventory management, junk bonds, lateral thinking, lifestyle creep, loose coupling, low interest rates, market bubble, McMansion, passive income, peak oil, place-making, planned obsolescence, Plato's cave, Ponzi scheme, power law, psychological pricing, retail therapy, risk free rate, sunk-cost fallacy, systems thinking, tacit knowledge, the scientific method, time value of money, Tragedy of the Commons, transaction costs, wage slave, working poor

Still, plotting for all possible historical periods shows how things have played out historically. This exercise can be repeated for different markets (domestic equity, international equity, commodities, real estate, timber, etc.) and for different investment methods (buy and hold, dividends, Dogs of the Dow, etc.). It will, however, quickly become clear that there are limits to how much the model can be fitted to the data. The objective of this exercise isn't to get a numerical value, but to get a sense of possible future scenarios, assuming that the future will likely repeat the past in one way or another.


Trade Your Way to Financial Freedom by van K. Tharp

asset allocation, backtesting, book value, Bretton Woods, buy and hold, buy the rumour, sell the news, capital asset pricing model, commodity trading advisor, compound rate of return, computer age, distributed generation, diversification, dogs of the Dow, Elliott wave, high net worth, index fund, locking in a profit, margin call, market fundamentalism, Market Wizards by Jack D. Schwager, passive income, prediction markets, price stability, proprietary trading, random walk, Reminiscences of a Stock Operator, reserve currency, risk tolerance, Ronald Reagan, Savings and loan crisis, Sharpe ratio, short selling, Tax Reform Act of 1986, transaction costs

That’s an example of using logic to determine when (and when not) to use a system.4 Furthermore, when the Motley Fool Web site introduced this simple technique to millions of investors, you can imagine what happened: many, many investors were focusing their efforts on just four stocks. But how can the “dogs of the Dow” remain a viable strategy if everyone is buying four specific stocks? The answer is that it can’t, and that’s probably why the strategy no longer works. Market Selection The second phase of entry is your selection of what markets you should trade. What qualities must a market have before you want to be a part of it?


pages: 918 words: 257,605

The Age of Surveillance Capitalism by Shoshana Zuboff

"World Economic Forum" Davos, algorithmic bias, Amazon Web Services, Andrew Keen, augmented reality, autonomous vehicles, barriers to entry, Bartolomé de las Casas, behavioural economics, Berlin Wall, Big Tech, bitcoin, blockchain, blue-collar work, book scanning, Broken windows theory, California gold rush, call centre, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, choice architecture, citizen journalism, Citizen Lab, classic study, cloud computing, collective bargaining, Computer Numeric Control, computer vision, connected car, context collapse, corporate governance, corporate personhood, creative destruction, cryptocurrency, data science, deep learning, digital capitalism, disinformation, dogs of the Dow, don't be evil, Donald Trump, Dr. Strangelove, driverless car, Easter island, Edward Snowden, en.wikipedia.org, Erik Brynjolfsson, Evgeny Morozov, facts on the ground, fake news, Ford Model T, Ford paid five dollars a day, future of work, game design, gamification, Google Earth, Google Glasses, Google X / Alphabet X, Herman Kahn, hive mind, Ian Bogost, impulse control, income inequality, information security, Internet of things, invention of the printing press, invisible hand, Jean Tirole, job automation, Johann Wolfgang von Goethe, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kevin Kelly, Kevin Roose, knowledge economy, Lewis Mumford, linked data, longitudinal study, low skilled workers, Mark Zuckerberg, market bubble, means of production, multi-sided market, Naomi Klein, natural language processing, Network effects, new economy, Occupy movement, off grid, off-the-grid, PageRank, Panopticon Jeremy Bentham, pattern recognition, Paul Buchheit, performance metric, Philip Mirowski, precision agriculture, price mechanism, profit maximization, profit motive, public intellectual, recommendation engine, refrigerator car, RFID, Richard Thaler, ride hailing / ride sharing, Robert Bork, Robert Mercer, Salesforce, Second Machine Age, self-driving car, sentiment analysis, shareholder value, Sheryl Sandberg, Shoshana Zuboff, Sidewalk Labs, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, slashdot, smart cities, Snapchat, social contagion, social distancing, social graph, social web, software as a service, speech recognition, statistical model, Steve Bannon, Steve Jobs, Steven Levy, structural adjustment programs, surveillance capitalism, technological determinism, TED Talk, The Future of Employment, The Wealth of Nations by Adam Smith, Tim Cook: Apple, two-sided market, union organizing, vertical integration, Watson beat the top human players on Jeopardy!, winner-take-all economy, Wolfgang Streeck, work culture , Yochai Benkler, you are the product

This translated into 76 percent of all desktop searches and 96 percent of mobile searches in the US and corresponding shares of 87 percent and 95 percent worldwide. 91. Roben Farzad, “Google at $400 Billion: A New No. 2 in Market Cap,” BusinessWeek, February 12, 2014, http://www.businessweek.com/articles/2014-02-12/google-at-400-billion-a-new-no-dot-2-in-market-cap. 92. “Largest Companies by Market Cap Today,” Dogs of the Dow, 2017, https://web.archive.org/web/20180701094340/http://dogsofthedow.com/largest-companies-by-market-cap.htm. 93. Jean-Charles Rochet and Jean Tirole, “Two-Sided Markets: A Progress Report,” RAND Journal of Economics 37, no. 3 (2006): 645–67. 94. For a discussion on this point and its relation to online target advertising, see Katherine J.