Dogs of the Dow and Dead Cat Bounce

The speaker talks about the dogs of the dow and how they can result in a move higher the following year due to bargain hunting.  The dogs of the dow are the stocks in the Dow Jones Industrial Average that end up paying the highest dividend due to the fact that stock value has dropped while their dividend payment remains constant.  The yield for these stocks goes up as a result.  Many traders use the strategy to purchase these stocks in the beginning of the following year.

The next type of discount that a trader can purchase is a dead cat bounce.  The dead cat bounce comes from a stock which has been oversold due to some unforseen news price or other negative event.  Once the news settles, the stock goes back up as a reflex reaction and traders can purchase these to make quick cash but with alot of risk.