This strategy is for lazy investors who want to put very little effort in making money.
- Select top 30 stocks
- Take 10 highest yealing stocks
- Invest equal amount in 5 shares with lowest share value
- Leave the money for a year. On first anniversary review your porfolio. Reinvest the capital plus dividend again.
- On second anniversy repeat the above steps again.
Even though the above strategy doesn't work every year but over the period it will be beat the index by atleast 5%.
A variant is select 5 stocks in step 2 and invest in the one with the second lowest share value. O'Higgins called this PPP: Penultimate profit prospect.
Following are the list of stocks for currently year.
ITV
BT
GKN
Logica
Royal Sun & Alliance.
3 comments:
Read the book. You have the PPP wrong. It is the second lowest priced stock of the ten (not 5) highest yield
Page 206, "A word about the (PPP), which I've defined as the second lowest-priced stock of the ten highest yielders."
Michchael B. O'Higgins
I think I have got it right by saying select the stocks from step 2 which does say top 10 stocks by yield. Isn't that correct?
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