Customer Reviews

Relative Dividend Yield: Common Stock Investing for Income and Appreciation, 2nd Edition

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(edited June/2011) I have come to the conclusion that making larger bets on globally diversified titans is the only way to invest. Look at your greatest investors. Buffett owned six companies that made up 80% of his holdings for decades and trounced the market. Richard Rainwater loaded up on Ensco when oil was trading in the teens. His thesis was bet big to get rich, and diversify to stay rich. My father owned the company stock and reinvested for 30 years and retired in his late 50's. This is not the theory of Spare and Tengler, but taking the best ideas and refining them to ones situation. Funny how I came to this conclusion years ago, but I bought into the diworseification mantra. Spare and Tengler just defined and refined it for me. Certainly, there is due diligence required, but this is almost a foolproof plan. It requires a bit of Graham's due diligence, the patience of Buffett, and with RDY you certainly limit the downside risk. Determing an exit strategy will be the hardest choice you have to make. My copy was old and dated. The book itself and the timliness rates about 3 stars at best. The formula contained within rates 5 stars. I paid more for the shippong than I did for the book. Best $5 bucks I ever spent.

Anthony Spare and Paul Ciotti make a logical, but uninspired, case for making Relative Dividend Yield part of one's equity valuation and also one's buy/sell decisions. The book is clearly written and offers ample graphs to substantiate the notion of buying equities when dividend yields are high, and selling them once they are low.

Actually, the graphs may be too ample...readers of this rather expensive 248-page book will quickly learn that the text is a bit long on charts showing individual equity dividend yields relative to stock indexes over time, and a bit short on specifics concerning the avoidance of issues whose yields are high for good reason.

That's the book's essential deficiency: the authors devote a mere twelve overly general pages to "Pitfalls and Preventative Measures" (Chapter 6). Also, since investors will likely have a difficult time constructing the kinds of charts the Relative Dividend Yield methodology requires, it would have been helpful to offer tips on a cost-effective means to make this methodology applicable in real-time. The authors do, however, provide graphs with prior relative dividend yield histories, with room to continue plotting these yields, on several "blue chip" dividend-paying equities.