Another Tortoise and Hare story? The more conservative Dow Jones Utilities index beat the Industrials returns for one-month, year-to-date, 1-, 3-, 5-, and 10-year periods by their own measure. See DJINdex.com for this remarkable and overlooked little gem. Notice it is a significant difference.

I say conservatively, and remarkably, because the Utilities trade at a slightly lower price-to-earnings (P/E) ratio, lower price-to-book (P/B) ratio, lower price-to-cash flow (P/Cash) ratio. In addition they pay a higher dividend yield of 3.24% vs 2.36% -- BIG PLUS!

So what comes to mind? Warren Buffett of Berkshire Hathaway has been buying utility companies for the past five years. Are his purchases affecting the market, maybe a little. Is he a shrewd investor? Dumb question.

So you don't need to watch the Industrials all the time and you don't need to chase Google, Ebay, Yahoo or any other hyped company... just follow Warren and your Depression-era grandparents and you will be doing great, without a lot of trading and fees and taxes.

Continue reading Dow Jones Utilities BEAT Industrials with ease!

Dow Jones Utilities BEAT Industrials with ease! originally appeared on BloggingStocks on Thu, 14 Sep 2006 12:40:00 EST. Please see our terms for use of feeds.