Contrarian Strategies in Developing Asian Countries: Dogs of the Dow Theory (DoD) versus Puppies of the Dow Theory (PoD)
Journal Title: International Journal of Academic Research in Business and Social Sciences - Year 2018, Vol 8, Issue 12
Abstract
This paper tries to test the ability of Dogs of the Dow Theory (DoD) and Puppies of the Dow Theory (PoD) to outperform the market returns of the four developing Asian countries from 2000 until 2014. Although empirical findings indicate that these two strategies appear to outperform the individual markets respectively however the results of the t-test do not show them to be statistically significant. This paper further tests the capability of these trading strategies in beating the market return during economic crisis of 2002, 2008 and 2011. Empirical results across these developing Asian countries revealed that in long run, both DoD and PoD portfolios are still applicable despite of mixed performance throughout the economic crisis period. DoD and PoD trading strategies are able to beat the market returns in Malaysia and Thailand during those crises but not in the Chinese share market. In the case of the Indonesian share market, these two strategies outperform the market only during the year 2002 and 2008 crises. Results of the t-test between the abnormal returns of the two strategies appear to be insignificant. This implies that the effectiveness of two strategies remain inconclusive.
Authors and Affiliations
Siti Hajar Nadrah Mohamad Ghouse, Noryati Ahmad, Norhana Salamudin
Keywords
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- EP ID EP596946
- DOI 10.6007/IJARBSS/v8-i12/5373
- Views 59
- Downloads 0
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