The Dick Davis Dividend: Straight Talk on Making Money from 40 Years on Wall Street

Great stuff!
Having read most everything by Bogle, Swensen, Bernstein, Swedroe, et. al., I found “Dividend” refreshing for it’s objective take on the financial industry and the media’s daily coverage of same. Yes, you’ve likely heard much of this elsewhere, yet not likely so well organized and presented. And yes, the book is long, but well worth a read – or two. I particularly enjoyed the broad coverage of passive portfolios. Dick Davis encourages exploration and critical questioning, to find what works for you.
Highly recommended.

I just finished the Dick Davis Dividend and I have to say it is one of the best investment books I have ever read. This book is perfect for anyone from a beginning investor to someone more advanced. Reading it now during tough econmic times and market uncertainty made it all the more valuable.

My absolute favorite section was when he outlined the top investors of the modern era’s portfolios. It shows that many of even the best investors stick to low cost index funds and ETFs.

This book is not for someone wanting to learn more about individual stocks and how to get rich quick. It is a perfect book for someone trying to find their own personal market strategy that will last through the Bulls and Bears. I highly recommend this book, even if you don’t fully believe in a index fund approach it gives everyone insight to another tool to have in your portfolio

Dick Davis has done a great service to both novice and experienced investors by providing his concentrated wisdom about markets in his book “Dick Davis Dividend.” The book is a veritable treasure. It cuts out false promises and hype endemic in most books on the type and deals with the subject in a comprehensive and intelligible manner.
The subject of investing is of utmost importance yet deplorably neglected in our educational system. Dick has taught the subject with ardent sincerity and great expertise over several decades. Do not buy the book if you are looking for making a fast buck or looking for individual stock tips. Dick goes beyond the patronizing lures set by the financial establishment and focuses on furnishing his readers with solid and useful advice that will stand in good stead to them for a lifetime.
I have read more than two hundred books on investing and have taught the subject at the college level. I have also been a long time investor. I find Dick’s book to be one of the best on the subject of investments and would recommend it without hesitation. I am not easily impressed and I have my differences with Dick in some areas, like market timing, for example. But that pales before the unimpeachable wisdom contained in Dick’s book. I am sure readers will find the book very beneficial for their financial prospects.

Dick Davis guides you through the ins and out of Wall Street in this highly informative yet easily readable book. You will be amazed at the wealth of investment information that is covered in a friendly and highly experienced voice.
This is a veritable gold mine of investment pearls for both the novice and the pro. You’ll be glad you read it and will find yourself coming back to use it as a reference and gateway to many other valuable investment sources.

I’m somewhat biased in this matter. More than 20 years ago,I was introduced to Dick Davis via an earlier publication of his. That reading jump-started my relative success in stock investment.This recent Dick Davis rendering is absolutely readable and solid from start to finish. At some point I’ll swipe some gems from this book for use on my Karl A Hoffman stock market website. I already have some Dick Davis quotes online.

I must confess that I had merely heard of Dick Davis, but did not know much about him until reading his book. I enjoyed his book, and think it is useful to new investors, and investors that have been unsuccessful in actively managing their own portfolios. I have read the whole book; this is not a review that comes from bullet points suggested by the publisher or author (sent to me and others, I have ignored them). I do have a minor criticism of the book; more on that later.

The Book

The first thing to appreciate about the book is its structure. After learning about the long career of the author, the book begins with a small amount of basic ideas per chapter, moves to progressively larger numbers of ideas per chapter that are less basic, and then returns the way it came, ending with progressively fewer ideas per chapter, but more basic ones.

The second thing to appreciate is the humility of Mr. Davis. His first answer to most investment questions is “I don’t know,” followed by reasons for and against the proposed course of action, after which he would indicate an opinion if he has one, and then say that he could be wrong, and that it would be good to do further study.

What does the book emphasize?

* Passive investing (ETFs and index funds)
* Careful selection of active managers.
* Imitating those carefully selected active managers if one decides to invest in common stocks directly.
* Avoiding too much trading, because the average investor tends to panic at bottoms, and get greedy at tops. Buying and selling have to be properly timed, because the average investor tends to do worse than the buy-and-hold investor.
* Be careful with costs on mutual funds. Most aren’t worthy of the fees, and with bond funds, cost advantages are the most durable.
* Invest for the long haul, realizing there will be bumps along the way, and keep enough excess liquidity on hand.
* There is no one right person or opinion. Things shift in the market, and trends often last longer than expected.
* Be wary of news flow; get a thick skin toward the multitude of opinions presented.
* Asset allocation is the key discipline to risk control; diversify broadly by asset class, country, style, etc.
* You can’t win every time, but you can tilt the odds in your favor.
* Use stop losses to limit losses. (I disagree. Use loss points to review your thesis, and if it is wrong, sell. Get a second opinion also. Otherwise, buy more.)
* Rising dividends beat high dividends
* Many strategies can work in the market; it’s more a question of when and how you apply them.
* Macro forecasting rarely works.
* Buying and holding the equity market tends to work over the long run, so have a core investment in the equity markets.
* Humility is a core character attribute of good investors. (Be more like Charles Kirk, and less like Jim Cramer… he spends several pages on this.)

Beyond that, Mr. Davis gives lists of good investment books, good investment blogs (I`m not on his list, so it goes), quotations, and active managers. I thought his favorite active managers to be a very good list for those looking for active mutual funds. The investment books were generally classics, though some are too new to tell. As for the blogs, well, we are here today and gone tomorrow. We are only as good as the last few things we publish, so good financial blogging is not something that a book can capture. We vary too much.

Now for my one criticism. The book has one long chapter on index fund portfolios that takes up 20% of the book, and gives 28 models (with sub-models) for “set it and forget it portfolios.” There are a couple of problems here: first, there are too many strategies here, and many don’t differ enough to deserve separate inclusion. Second, it would be better to spend more time on the factors behind why someone might choose one approach rather then another. What goes into creating a good asset allocation? How much should I have in bonds? Foreign bonds? Foreign equities? Cash? Obscure asset classes? I’m not asking for detailed math, but rules of thumb for average investors to follow, so that they could find a passive strategy that is among those strategies that would be more likely to meet their needs.

But with that one cavil, I can recommend this book to investors, particularly those that have not done well with active management. This book won’t teach you what to do, as much as how to think and discipline yourself. Most investors should limit their options in investing because their emotions and abilities aren’t suited to the violence of the markets.

For investors that do well with active management, you don’t need this book, but you might like it for the stories that he tells, or as a gift for relatives who need to follow a more passive style of investment management.

On the front of the book there is a quote by Larry King calling the author “the best stock commentator I have ever heard.” That is what this book is, a commentary about the stock market in general and the virtues of being a passive investor in low load mutual funds or ETFs.

The majority of the book consists of generalities about the market that based on his numerous years of following the market Davis feels are most important for investors to learn: the news follows the market action, news reporters try to explain the daily stock moves and may not be right about the real reasons, passive long term investors should not worry about the news since they are in it for the long haul, news is only important if its about a fundamental shift for your company, you more than likely can not beat the market so you should use a diversified portfolio of mutual funds or ETFs, you should buy for the long term but if the market fundamentals change you should rebalance the portfolio, invest in mutual funds or etfs when stocks are cheap, etc. You can guess from these subjects that the author is heavily biased in favor of being a passive investor. The book is filled with quotes from Peter Lynch, Warren Buffet, and a host of other investors to back up this point of view. For investors who want to follow this path, he includes a 28 model index giving examples of diversified portfolios of mutual funds and etfs so investors can get an idea of how to do this. Davis also touches on active investing, some generalities about that way of investing (like keep investing using a system as long as it works, etc.), and gives lists of 60+ books, sources, and newsletters that have proven to be good for active investors.

But again this is more of a commentary book about personal observations made by author and his pointing out how other investors have been successful in the market. Detailed discussions and use of market metrics (P/E, PEG, technical anaysis, etc.) are little to nonexistent; you can get the same level of detail from a tv interview with Warren Buffet or Bogle. His commentary on some subjects (such as why not to listen to the media because they focus on the short term is 30+ pages)is somewhat overdone (in fairness, Davis points this out in the first of the book). Davis really doesn’t give his own experiences in investing, he just points out what others have done and what statistics have shown. He also points out several times that in the courses he teaches most of his students are confused by him because he presents the whole story of a stock, both good and bad, and leaves it up to them to decide what to believe rather than giving a strong opinion; that pretty much sums up this book.

If you are an advanced to intermediate active investor in individual stocks (I consider myself intermediate), the book has good generalities to remember but if you are looking for something more like a Peter Lynch book with specifics you will be disappointed; the reason for two stars. If you are a beginning investor, an investor who doesn’t have time to follow the market but wants to participate in investing, or a stong advocate of the Bogle method of investing, you will find the book interesting and probably deserves 4 stars. Personally, I think you can get the same info in more detail from books by Ken Fisher, Peter Lynch, John Bogle, and about Warren Buffet.

This book is near 500 pages long and it could’ve been done with fewer than 50 pages. Mr. Davis simply repeats himself over and over and his writing style is so disorganized and redundant that I got lost from chapter to chapter and finally lost interest all together. If you are looking for good investment advice, don’t bother with this book. However, if you want to read a non-fiction novel, then this book might be of some entertainment value.