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blue chip stockIn the investment world, a share of stock represents a share of ownership in a corporation ....
is the stock of a well-established
companyA corporation is a legal entity separate from the shareholders and employees. In British tradition it is the term designating a body corporate, where it can be either a corporation sole or a corporation aggregate...
having stable earnings and no extensive
liabilitiesIn financial accounting, a liability is defined as an obligation of an entity arising from past transactions or events, the settlement of which may result in the transfer or use of assets, provision of services or other yielding of economic benefits in the future.* All type of borrowing from...
. The term derives from casinos, where blue chips stand for counters of the highest value. For example, Blue Swiss is the stock of a well-established Swiss bank. Blue chip stocks pay regular
dividendDividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business , or it can be paid to the...
s, even when business is faring worse than usual.
The phrase was coined by Oliver Gingold of Dow Jones sometime in 1923 or 1924.
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A
blue chip stockIn the investment world, a share of stock represents a share of ownership in a corporation ....
is the stock of a well-established
companyA corporation is a legal entity separate from the shareholders and employees. In British tradition it is the term designating a body corporate, where it can be either a corporation sole or a corporation aggregate...
having stable earnings and no extensive
liabilitiesIn financial accounting, a liability is defined as an obligation of an entity arising from past transactions or events, the settlement of which may result in the transfer or use of assets, provision of services or other yielding of economic benefits in the future.* All type of borrowing from...
. The term derives from casinos, where blue chips stand for counters of the highest value. For example, Blue Swiss is the stock of a well-established Swiss bank. Blue chip stocks pay regular
dividendDividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business , or it can be paid to the...
s, even when business is faring worse than usual.
The phrase was coined by Oliver Gingold of Dow Jones sometime in 1923 or 1924. Company folklore recounts that the term apparently got its start when Gingold was standing by the stock ticker at the brokerage firm that later became
Merrill LynchMerrill Lynch & Co., Inc. was a global financial services firm acquired by Bank of America in 2009, today known as Bank of America Merrill Lynch. The firm was acquired by Bank of America under distressed circumstances during the 2008 Financial Crisis. This article describes both the historical...
. Noticing several trades at USD$200 or USD$250 a share or more, he said to Lucien Hooper of W.E. Hutton & Co. that he intended to return to the office to “write about these blue chip stocks.” Thus the phrase was born. It has been in use ever since, originally in reference to high-priced stocks, more commonly used today to refer to high-quality stocks. In contemporary media, Blue Chips and their daily performances are frequently mentioned alongside other economic averages like the
Dow Jones Industrial AverageThe Dow Jones Industrial Average also referred to as the Industrial Average, the Dow Jones, the Dow 30, or simply as the Dow; is one of several stock market indices, created by Wall Street Journal editor and Dow Jones & Company co-founder Charles Dow...
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