blue chip etymology

Etymology:

The term "blue chip" originated in the 19th century when it was used in the poker game. The blue chips were the most valuable chips, signifying a player's wealth and skill.

Meaning:

In the context of stocks, a "blue chip" stock refers to a highly reputable, financially stable, and established company that consistently produces strong earnings and dividends. These companies are typically large and well-known, with a long history of reliable performance.

Origin:

The term "blue chip" was first used in the stock market in 1928 by Oliver Gingold, a stockbroker at Merrill Lynch. He used it to describe a group of 20 stocks that were considered to be the most stable and reliable investments of the time.

Over time, the term "blue chip" became widely used to refer to any stock that met certain criteria, such as:

  • Large market capitalization
  • Long history of profitability
  • Consistent dividend payments
  • Strong balance sheet
  • Positive industry outlook

Examples of blue-chip companies include:

  • Apple (AAPL)
  • Microsoft (MSFT)
  • Amazon (AMZN)
  • Berkshire Hathaway (BRK.A)
  • Visa (V)

Blue chip stocks are generally considered to be safe investments, as they tend to hold their value well, even during market downturns. They are often included in portfolios of long-term investors seeking stable returns and dividend income.

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