by Ian L. Cooper Sure, it’s still too early to tell with 100% accuracy
which of the Dow 30 will be crowned the top Dogs
of the Dow. But we’re taking bets and making bold
predictions. And should they prove correct, well,
you’ll be one of the first in line to make some hand-
some profits come January 2004. We have a history of playing the Dogs of the
Dow and making some decent sized profits. And
that’s even before adding in the dividend payouts.
In January 2002, fellow Taipan guru Christian
DeHaemer recommended that you sink your teeth
into a diversified portfolio of Dow stocks that were
battered beyond recognition yet still paid out hefty
cash dividends. Known as the Dogs of the Dow in the bear mar-
ket of 2001, DeHaemer’s picks returned an average
gain of 8% in less than three months. Then, with the idea that 2003 would be a turn-
around year, we did it once again. In 2003, I recommended that you sink your teeth
into Altria Group (MO:NYSE), JP Morgan
(JPM:NYSE), Eastman Kodak (EK:NYSE), Honeywell
International (HON:NYSE) and SBC Communications
(SBC:NYSE). With the exception of SBC and HON,
we did extraordinarily well, with an average return
of 10%. Here’s how we did: The science of Dogs There really is no science to choosing the Dogs.
You buy the Dow stocks with the highest dividend
yields and watch them outperform the market. Dogs
of the Dow plays are a good buy for the following
reasons. - One: These companies most likely will not go out of business. - Two: They are financially sound and have enough gung-ho to keep them rolling. - Three: They pay dividends.
-Four: We’re buying them at low prices. The key to making good profits from the Dogs of the Dow is to hold the plays for a period of a year to
18 months. This gives management and the board
of directors enough time to bring the stock prices
up to market value. Plus, if you sell your investment
after 18 months, any gains you pull in will be treat-
ed as long-term rather than short-term. Check with
your financial advisor. Possible Dogs of
the Dow for 2003 Typically, investors wait until the last trading day
of the year to review the Dow 30 for the Dogs of the
Dow. But here at Red Zone we’re not known for fol-
lowing the herd mentality of Wall Street. We’re try-
ing to beat the rush of Dog news to set you up for
some nice returns. In fact, it’s that “beating the
news” plan that has made our publication Extreme
Volatility Speculator so successful. Instead of playing all ten Dogs of the Dow, we’ve Plus, there are more than 5.2 million students
enrolled in private schools, with about 2.84 million
students in the elementary and secondary level
schools. Better still, according to the Council on
American Private Education, secondary school
enrollment is expected to increase as much as 8%
between 2000 and 2006. That should add nicely to
VSTY’s bottom line. Last earnings report For Q3 2003, VSTY posted a net profit of US$3.8 million, a 78% upsurge from the US$2.1 million
recorded in Q3 2002. Revenue shot up 49% to
US$21.5 million from US$14.4 million. The company’s eduPartners division served
some 200 schools in the last back-to-school season
in September 2003. With the addition of more
schools to VSTY’s roster, the company expects to
deliver record earnings for the fiscal year ending
December 31, 2003. If it sounds like we’re excited about pulling in
profits for the fifth time with VSTY, that’s because
we are. Buy Varsity Group under US$4.10 (VSTY:OTCBB)
on the back-to-school trend that has paid off hand-
somely four times before. Contact: 1850 M Street,
Suite 1150, Washington, DC 20036, tel. 202-667-
3400, fax 202-332-5498. Visit: www.varsity-
group.com. 4 Hotline: 410 528 8228 TAIPAN Letting the Dogs out early Altria Group (MO) US$39.52 US$46.99 +19% JP Morgan (JPM) US$25.20 US$35.84 +42% Eastman Kodak (EK) US$36.58 US$30.71 -16% Honeywell (HON) US$24.50 US$30.20 +23% SBC Comms (SBC) US$28.51 US$24.29 -15% Stock / Symbol Entry Exit with Gain/Loss Dividends
