The Dogs of the Dow in Investing

The Dogs of the Dow is an investment strategy popularized by Michael B. O'Higgins in 1991 and the official Dogs of the Dow website, which proposes that an investor annually select for investment the ten Dow Jones Industrial Average (DJIA) stocks whose dividend is the highest fraction of their price. Under other analysis these stocks would be considered "dogs", or undesirable, but the Dogs of the Dow strategy proposes these same stocks have the potential for substantial increases in stock price plus relatively high dividend payouts.

History

Selecting some components of the DJIA is not a new idea. An article by H. G. Schneider was published in The Journal of Finance in 1951, based on selecting stocks by their price–earnings ratio.

Concept

Proponents of the Dogs of the Dow strategy argue that the blue-chip companies that make up the Dow Jones Industrial Average are better able to withstand market and economic downturns and maintain their high dividend yield due to their access to credit markets, ability to hire top level management, ability to acquire dynamic companies, etc. Since a high yield often occurs after a significant stock price decline, a high dividend relative to stock price for a blue-chip company tends to suggest that the stock may be a reasonable value with the potential for the stock price to...Read more

Direct-to-consumer (DTC) : an overview

Direct-to-consumer (DTC) refers to selling products directly to customers, bypassing any third-party retailers, wholesalers, or any other middlemen. DTC brands are usually sold online only and specialize in a specific product category: Casper, Warby Parker, Everlane, Harry’s, Outdoor Voices, AWAY, and Dollar Shave Club. Some direct-to-consumer brands have opened a limited number of physical retail spaces in adjunct to their main e-commerce platform in a clicks-and-mortar business model.

History of Direct-to-consumer

Direct-to-consumer became immensely popular during the dotcom boom of the late 1990s when it was mainly used to refer to online retailers who sold products and services to consumers through the Internet. But looking at physical exchange of goods/services, this model dates way back in time, when the modes of transportation we are using today were unknown and electricity was not yet discovered. People back then consumed mostly locally due to large geographical distances, which they could overcome either on foot or by horse, but both usually took them days. Therefore, they established relationships with closest goods and service providers and this is how Direct-to-consumer model first looked like. If we look, for instance, at the farmers as a business, it could be argued that they had a small but loyal pool of customers and operated on a small scale. The relationships were tight and healthy, because the switching costs for customers were pretty high, as said, due to geographical barriers and small number of competitors. Furthermore, there was much more space for personalization of business processes as farmers (among others, such as shoe repair master) knew exactly who their customers were and what they wanted. Read more...

Dilutive Security

Definition

A dilutive security is any type of investment security that has the potential to increase the number of common shares outstanding. In other words, it’s any securities that can be turned into common stock. The idea is that if a security increases the outstanding shares it will dilute the current shareholders stake in the company as well as their owner benefits like future dividends and voting power. Unless the existing shareholders have the right to maintain their ownership when dilutive securities are converted, their stock will become slightly less valuable.

What Does Dilutive Securities Mean?

Like most investments, dilutive securities can take a few different forms. Common stock is obviously the most common dilutive security because any additional issuances of common stock will automatically raise the number of outstanding shares.

Beyond that, some other examples include convertible preferred shares, stock options, rights to buy, and convertible bonds. Read more...

Digital Strategy

A digital strategy is a form of strategic management and a business answer or response to a digital question, often best addressed as part of an overall business strategy. A digital strategy is often characterized by the application of new technologies to existing business activity and/or a focus on the enablement of new digital capabilities to their business (such as those created by the Information Age and often as a result of advancements in digital technologies such as computers, data, telecommunications, Internet, etc.). As is the case with its business strategy parent, a digital strategy can be formulated and implemented through a variety of different approaches. Formulation often includes the process of specifying an organization's vision, goals, opportunities and related activities in order to maximize the business benefits of digital initiatives to an organization. These can range from an enterprise focus, which considers the broader opportunities and risks digital can create and often includes customer intelligence, collaboration, new product/market exploration, sales and service optimization, enterprise technology architectures and processes, innovation and governance; to more marketing and customer-focused efforts such as web sites, mobile, eCommerce, social, site and search engine optimization, and advertising. Read more on Wikipedia

Digital Invoice Customs Exchange (DICE)

Definition

The Digital Invoice Customs Exchange (DICE) is a revenue protection idea developed to prevent tax evasion methods such as sales suppression in domestic trade and missing trader fraud, transfer pricing in cross-border trade. As such, the implementation of this idea enables Revenue Authority to have advance notice of every commercial transaction.

How it works

A seller produces digital invoice containing minimum requirements as follows:

• Name of the seller with unique Taxpayer Identification Number;
• Name of the purchaser with unique Taxpayer Identification Number;
• Description of good/service;
• Unit price;
• Quantity;
• Tax rate;
• Total price with tax.

Such prepared invoice, along with proper authentication of the seller, is uploaded to the Revenue Authority server (seller's jurisdiction) using DICE protocol for safekeeping and signature processing. Based on the information provided by the seller, system will apply verifiable electronic signature and send it back in the same way as it was received. Seller will include electronic signature received in return to finalize invoice before dispatching it to customer who may verify the content of the invoice at any time by checking the signature using Revenue Authority's or DICE's web portal. Read more...

What is Desktop outsourcing?

Desktop outsourcing is the process in which an organization contracts a third party to maintain and manage parts of its IT infrastructure. Contracts vary in depth and can range from Computer hard- and software maintenance to Desktop virtualisation, SaaS-implementations and Helpdesk operation. It is estimated, that 32% of U.S. and Canadian IT organisations make use of desktop outsourcing in 2014. Recent market reports suggest the adoption of BYOD policies to allow the end-user a free choice of devices in their working environment may increase this market share.

Viability

Justification for desktop outsourcing could include shifting focus and energy to areas of core competency, reducing staffing costs, and the routine maintenance, upgrades, and repairs associated with managing multitudes of PC systems and servers. (Applegate et al. 2007). Managers may also seek desktop outsourcing as a method of simplifying organisational structures to cut costs associated with them. For smaller companies it might also be more viable financially to outsource their desktop at a set price per machine, rather than creating an entire internal IT department. Recent market growth can also be attributed to the decreasing price of hardware, making replacement more favourable than repairs. Possible risks when desktop outsourcing are ensuring continued support for old a unique systems the company depends on, specifically if any of the systems in question were internally developed. This may cause the contractor to be unable to fulfil their contractual obligations, as in the case of the US Navy outsourcing their IT systems to EDS in 2003.

Market situation

A 2012 TechNavio market report forecasts that the desktop outsourcing market will grow by 4.65% yearly, between 2012 and 2016. Atos, CSC, HP and IBM are considered the leading desktop outsourcing vendors for that time frame. A Gartner report from 2013, however, considers the desktop outsourcing market to be in decline, with growth only occurring on the Latin American and Asia/Pacific markets. Read more...

Design of experiments

The design of experiments (DOE, DOX, or experimental design) is the design of any task that aims to describe or explain the variation of information under conditions that are hypothesized to reflect the variation. The term is generally associated with true experiments in which the design introduces conditions that directly affect the variation, but may also refer to the design of quasi-experiments, in which natural conditions that influence the variation are selected for observation.

In its simplest form, an experiment aims at predicting the outcome by introducing a change of the preconditions, which is reflected in a variable called the predictor (independent). The change in the predictor is generally hypothesized to result in a change in the second variable, hence called the outcome (dependent) variable. Experimental design involves not only the selection of suitable predictors and outcomes, but planning the delivery of the experiment under statistically optimal conditions given the constraints of available resources.

Main concerns in experimental design include the establishment of validity, reliability, and replicability. For example, these concerns can be partially addressed by carefully choosing the predictor, reducing the risk of measurement error, and ensuring that the documentation of the method is sufficiently detailed. Related concerns include achieving appropriate levels of statistical power and sensitivity.

Correctly designed experiments advance knowledge in the natural and social sciences and engineering. Other applications include marketing and policy making. Read more...