SBC - dog of dow

**yppsilence** Tue Apr 19, 2005 10:13 am

SBC - dog of dow
Before I got to know blastinvest, I bought some SBC, at $25.24 in last Sep. The advantages are:
1: A lot of insider buyers. I saw a huge of Acquisitions (Non Open Market)
, and the prices were exact the same with those in open market.
2: High yield: 5.21%
3: Lower P/E.
4: It's still hard for me to read the blance sheet, and I just started to studying investment almost one year ago. My major is Chemistry. I didn't went through all the blance sheets to learn more about the financial background of SBC.
4: When I bought some SBC stocks, I was studying the dogs of dow. SBC is a small dog. It is said that the average annual return of the small dogs is about 20% since 1973! It's attracting.

I wonder if blastinvest could give me some suggestions about SBC and dogs of dow? Thank you very much!

**blast_investor** Tue Apr 19, 2005 10:17 pm

yppsilence,

I never studied about dogs of dow theory before, so I do not know that much in detail.

Based on the desciption of dog of dow theory as "High dividend yield Dow stocks", it appears to be a conservative and value-oriented passive type investing. The idea is that investors would just passively invest into bunch of cheap and high dividend stocks without worrying too much about the detail of their business.

I think that kind of approach is fine as long as diversification rule is applied. With passive method of investment into many stocks, there got to be some bad apples there, there got to be some good apples there. With diversification, the end result should be fine because DOW stocks are big established company and high dividend most likely also means not too expensive stocks.

**blast_investor** Tue Apr 19, 2005 10:28 pm

On the SBC, I agree with you. I like this stock business model. It has pretty much monopoly on its phone business. The Cingular wireless business is also doing well.

SBC stock price is pretty cheap.

**yppsilence** Wed Apr 20, 2005 8:56 am

Dogs of the dow
Thanks for sharing your opinion.
The website of dogs of dow is: www.dogsofthedow.com
I got to know it form Peter Lynch's books.

**jeep** Wed Apr 20, 2005 7:41 pm

As blast said, SBC is pretty cheap.

The wireless market is a bit too competitive, which is good for the consumers but bad for business. The original advantage of customer lock-in is now pretty much gone, one can easily switch company (1 or 2 years minimum depending on contract length) but keep the same phone number.

**jeep** Wed Apr 20, 2005 7:43 pm

Re: SBC
I wonder how "dogs of dow" treats a company delisted from DOW during a certain year, since most likely such a company could be a dog.

yppsilence wrote: dogs of dow?

**yppsilence** Wed Apr 20, 2005 9:01 pm

Re: SBC
1:
Dog Steps
Investing in the Dogs of the Dow is relatively simple. After the stock market closes on the last day of the year, of the 30 stocks that make up the Dow Jones Industrial Average, select the ten stocks which have the highest dividend yield. Then simply get in touch with your broker and invest an equal dollar amount in each of these ten high yield stocks. Then hold these ten "Dogs of the Dow" for one year. Repeat these steps each and every year. That's it!

If simplicity is what you are looking for, this is about as simple as it gets. One telephone call to your broker per year and your Dogs of the Dow portfolio is ready to go. And to make it even simpler, just select your Dogs of the Dow bookmark on the last day of the calendar year and the official Dogs of the Dow will be listed for your convenience. If you would like to be notified the moment that the Dogs of the Dow are revised, sign up to our Mailing List. It's Free!

Small Dog Steps
Some of you may be interested in trying to outperform even the traditional Dogs of the Dow. Well, we have a way that historically has done just that. On the last day of any given year, select the ten highest yielding stocks as you normally would. Of these ten Dogs simply select the five Dogs with the lowest stock price and you will have what we call the Small Dogs of the Dow (Sometimes referred to as the Puppies of the Dow or the Flying Five). Then get in touch with your broker and invest an equal dollar amount in each of these 5 high yielding, low priced stocks. Then hold these five "Small Dogs of the Dow" for one year. Investing in the Puppies of the Dow would have resulted in a 20.9% average annual return since 1973! (As reported in U.S. News & World Report, July 8, 1996)

2:
From your last post, do you mean that it's not good to buy SBC? but, I already did it... Blast said that it was cheap. I hope I could make some money in the two or three years.

[quote="jeep"]I wonder how "dogs of dow" treats a company delisted from DOW during a certain year, since most likely such a company could be a dog.

**jeep** Wed Apr 20, 2005 9:07 pm

Re: SBC
I was just giving some thoughts about SBC's business, which may influence SBC's growth potential. Given the low PE and high dividend, it should be a fairly safe investment and you get peace of mind.