ABSTRACT
The Dow Theory The record shows that an investor who had bought a representative group of stocks on every Major Bull Market signal according to the Dow Theory as outlined in Chapters 3, 4, and 5, and had sold all his stocks on every Major Bear Market signal, since the start of the Dow Averages, would have come out very well indeed over the years. (EN: see tables in Chapter 4.) Although this tabulation does not take short sales into account (EN9: now taken into account in the ninth edition), it would be perfectly consistent to add that a representative group of stocks might be sold short on every Major Bear Market signal and covered at the next Bull Market signal. And if the gures for such short sales, based on the level of the Industrial Average, were included, the total prots on these theoretical transactions, both long and short, would be enormous. (EN9: Buy and Hold to 2011: $25,952.72. Dow Theory, long only: $492,597.38. Dow Theory, long and short: $2,175,913.88.) (For illustrations in this chapter, see Figures 33.1 through 33.16.)
We believe that this record carries some weighty implications that have a bearing on the operations of every trader and investor. We will comment on these shortly.
