This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Why High Quality Stocks Are Called 'blue Chip'

By Xavier Brenner

You hear the term "blue chip stock" used ubiquitously in the media to describe the equity of large companies whose profitability tends to be stable, regardless of swings in the business cycle. The Dow Jones Industrial Average is often described as an index of high quality, blue chip stocks. But do you know the origin of the term?

Oliver Gingold, one of the early employees at Wall Street Journal publisher Dow Jones, is widely credited with coining the term in the early 1920s. According to one account, Gingold was standing by a rolling stock ticker at a brokerage firm and noticed several trades of stocks valued at more than $200. He told those nearby that he planned to head back to the office and “write about these blue chips stocks.”

Gingold probably was a poker player. In poker, bets are made with white, red, and blue chips — and the blues are typically the highest in value.

poker chips

Circa 2013, the term "blue chip" is still in common currency. But given the more rapid rise and fall of companies in this age of disruptive technological change, market participants have come to question whether any stock can today be considered rock solid in the way blue chips once were. Consider the travails that visited the once bluest of the blue corporations like General Motors (GM), Lehman Brothers and Eastman Kodak (EK).

In today’s global economy, there are precious few sure bets.

Photo Credit: daveynin

null

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs