The Dick Davis Dividend

A pioneer in the financial media, Dick Davis has interacted with the investing public for over forty years. With his new book, he continues this trend. The first part of The Dick Davis Dividend contains an easy-to-read, yet profound discussion of the essentials of investing—focusing on the savvy veteran’s often unconventional, core beliefs. While the second part of this engaging guide makes a compelling case for combining both passive investing via index funds and active investing via stocks and mutual funds. Preface.

Acknowledgments.

About the Author.

Introduction.

Can 95 Million Investors Be Wrong?

A Challenge: Blunt Honesty without Turning Off the Investor.

Where I’m Coming From.

Housekeeping Notes.

Chapter 1: Personal Background.

Pre–Wall Street.

One-of-a-Kind Career on Wall Street.

Post–Wall Street.

Modesty Adds Credibility.

Part One: Deepest Convictions About Successful Investing After 40 Years On Wall Street.

Chapter 2: The Three Best Things to Have before Starting to Invest.

Luck.

Longevity.

Deep Pockets.

Chapter 3: Six Absolutes.

1. Nobody Knows the Answers.

2. There’s Always an Exact Opposite Opinion.

3. We’re Predisposed to Fail, But Not Predestined.

4. There Is Symmetry in the Market.

5. The Market Is King—News Is Mostly Irrelevant.

6. The Durability of Major Trends Is Underestimated.

Chapter 4: Seven Core Convictions.

1. Asset Allocation Is Key to Managing Risk.

2. Proper Entry Level Is Crucial.

3. Be Aware of the Negatives: There’s Always a Column A and a Column B.

4. The Best You Can Do Is Put the Odds in Your Favor.

5. The Worst You Can Do Is Be Totally and Instantly Informed (A Critique of CNBC).

6. Many Strategies Can Work—The Key Is Consistency.

7. Index Funds: The Answer for Most, But Not the Whole Answer.

Chapter 5: Thirty-Five Nuggets.

1. After You Buy, It’ll Always Go Lower.

2. CEOs on Their Own Stock.

3. Conventional Wisdom Is More Conventional than Wisdom.

4. Humility Is Sadly Lacking on Wall Street.

5. A Sure Thing If You Have the Patience.

6. No Single Stock Has to Be Bought.

7. The Sticky Question of When to Sell.

8. Mergers Are Good for Everyone Except Stockholders.

9. Get Children Started Early.

10. Don’t Rebuke Yourself.

11. Face It, It’s History; Put It Behind You.

12. Investigate, Then Invest—Hogwash.

13. Cramer versus Kirk.

14. How to Answer Questions about the Market.

15. Giving Advice to Relatives—Tread Lightly.

16. When Greed Paid Off.

17. Losses Are Inevitable—A Big Loss Unacceptable.

18. ETFs Are a Beautiful Thing.

19. Rising Dividends Are More Important than Big Dividends.

20. The Broker and the Case for Discretion.

21. All Investors Are Not Created Equal.

22. Low Commissions Make Online Trading Hard to Resist.

23. Understand Your Own Temperament.

24. The Upside-Down Stock Market.

25. Every Group Has Its Day.

26. “When” Is More Important than “What”.

27. No Place to Hide for the Investor.

28. The Rarity of Inside Information.

29. What’s a Reasonable Return?

30. The Market Is Typically Dull and Indecisive.

31. Interest Rates—The Most Difficult of All to Forecast.

32. The Brilliant Market Call.

33. Your Results Will Differ From Your Fund’s.

34. You Can Make Money in a Down Market.

35. No One Has a Monopoly on the Right Answers.

Part Two: Okay, So What Do I Do With My Money?

Chapter 6: Active versus Passive Investing.

The 80-20 Solution.

Passive Investing—An Overview.

Index Funds: What’s Most Important To Know.

Chapter 7: Passive Investing: Twenty-Eight Model Index Fund Portfolios.

Setting the Table.

Paul Farrell: Lazy Man Portfolios.

Twenty-Eight Model Index Fund Portfolios.

Chapter 8: Active Investing with Mutual Funds.

Ways for Do-It-Yourselfers to Outperform the Market: Introduction.

Life-Cycle/Target Retirement Funds.

Mutual Funds: 18 Key Points.

Chapter 9: Active Investing with Stocks.

Newsletters.

“My One Favorite Stock” Lists.

Piggybacking the Masters.

Virtual Investing.

Stock Screens.

Brokerage Focus Lists.

Stock-Picking Columnists.

The CAN SLIM Approach: William O’Neil.

The Magic Formula: Joel Greenblatt.

Jeremy Siegel’s Dividend Approach.

Private Money Managers.

Best Web Sites and Blogs.

Chapter 10: Conclusion.

Great Investment Books: The Right Kind of Homework.

Sayings and Quotations.

Wrap-Up: What I Hope You Take Away.

Index.

Dick Davis is one of the most widely known and highly respected market commentators of his time. He founded The Dick Davis Digest in 1982, one of the nation's largest investment news-letters, and pioneered stock market reporting via television and radio. Davis also wrote a stock market column for the Miami Herald—which was syndicated to over 100 newspapers—for over ten years. Born in Yonkers, New York, Davis lived in Miami for forty-five years and in Boca Raton since 1992. What can you say about how to make money in the stock market that hasn't been said before? How many different ways can you say buy good stocks cheap, diversify, hold on, and control your emotions?

The Dick Davis Dividend doesn't avoid these basic concepts but it spotlights others, which are seldom discussed, that the author believes will strongly tilt the odds toward investors and give them a valuable edge. These are passionately held convictions expressed with unusual candor and clarity.

A pioneer in the financial media, Dick Davis has interacted with the investment public as a radio and TV broadcaster, newsletter editor, columnist, lecturer, and teacher for over forty years. With The Dick Davis Dividend, he continues this trend. The first part of the book contains an easy-to-read, yet profound discussion of the essentials of investing—focusing on the savvy veteran's often unconventional, core beliefs. For example, Davis pounds the table about the over-exaggerated value of homework, the irrelevance of news, the underappreciated durability of major trends, the predisposition of investors to fail, the curse of being totally and instantly informed, and the rarely acknowledged role of pure luck.

Davis' bluntly honest approach is reflected in some of the chapter headings: "Absolutely Nobody Knows the Answers," "There's Always an Exact Opposite Opinion," "The Market Is Always King," and "After You Buy It'll Always Go Lower."

The second part of this engaging guide makes a compelling case for combining both passive investing via index funds and active investing via stocks and mutual funds. Davis focuses on twenty-eight buy and hold, diversified, index fund model portfolios. Each one is recommended by a leading authority in the world of indexing. Included are the favorite index portfolios of Burton Malkiel, John Bogle, Ben Stein, Jonathan Clements, and twenty-four others. The wide selection of models makes a passive/active strategy easy to implement.

The Dick Davis Dividend is filled with in-depth insight and straightforward, practical advice labeled "timeless wisdom" by bestselling author Andrew Tobias. It is an uncomplicated explanation of how today's investor can meet the challenge of an unpredictable market and come out a winner.

Praise for The Dick Davis Dividend

"The Dick Davis Dividend is a delightful read and is packed with useful advice for investors. The recommended strategy—index most of the portfolio and actively manage the rest—is likely to improve performance, lower risk, and still allow investment junkies to have fun picking individual stocks and funds. It's what I do myself."
—Burton G. Malkiel, author, A Random Walk Down Wall Street

"Dick Davis' new book is a gem...packed with wise, down-to-earth advice for the long-term investor. The investing public needs more Dutch Uncle advice like this. It is worthy of broad readership. I have a general policy of not giving book blurbs, which gives me the freedom to make an exception when a truly exceptional manuscript crosses my desk."
—Knight Kiplinger, Editor in Chief, The Kiplinger Letter and Kiplinger's Personal Finance magazine

"For forty years, Dick Davis has been dispensing the best investment advice from the best analysts in the world. He is a true national investment wisdom treasure. The Dick Davis Dividend is the highlight of a long and successful career guiding investors in their search for profits and security. Each page is jam-packed with the best that forty years of unmatched research and incredible contacts can offer. This is a book that you will read and re-read over and over again."
—John Mauldin, author, Bull's Eye Investing and Editor of Thoughts from the Frontline

"The great thing about Dick Davis' advice—with 90% of which I agree and about the other 10% of which I am likely just wrong—is that it's basically timeless."
—Andrew Tobias, author, The Only Investment Guide You'll Ever Need

"I have known Dick Davis for about thirty-five years. His new book, The Dick Davis Dividend, is straightforward, sound advice. I highly recommend reading it!"
—Marty Zweig, Partner, Zweig-DiMenna, LLC

"The Dick Davis Dividend is an amazingly complete book covering not only the major aspects of investing but also capturing the nuances and exceptions that are so important. As we would expect from Dick, the writing is bright, engaging, and exceptionally clear. I recommend the book to all individual investors and think it will also help broaden the view of investment professionals."
—James B. Cloonan, Chairman and founder, American Association of Individual Investors