Classic Research: Dow Theory Long Dead?
November 4, 2005 - Technical Trading
We have selected for retrospective review a few all-time “best selling” research papers of the past few years from the General Financial Markets category of the Social Science Research Network (SSRN). Here we summarize the March 1998 paper entitled “The Dow Theory: William Peter Hamilton’s Track Record Re-Considered” (download count nearly 5,900) by Stephen Brown, William Goetzmann and Alok Kumar. This research applies risk adjustment and out-of-sample testing to re-examine Alfred Cowles’ 1934 debunking of the Dow Theory (as defined by the 255 editorials of William Peter Hamilton in The Wall Street Journal during 1902-1929). They conclude that: Keep Reading