The system is based on dividend yields. The method is to take the 10 highest-yielding stocks in the Dow Jones index (or, in this case, the FT 30), and then invest an equal amount in the five that, at the time, have the lowest absolute share prices in dollars (or, in this case, pence). The selections are then left undisturbed for 12 months.
After a year has elapsed, the next job is to calculate the capital gains or losses, tot up the dividend income banked in the meantime, perform the exercise again, change the portfolio where necessary to reflect the new year's system selections and the need to reinvest the accumulated dividend income. Then sit back for another 364 days. It's bad news for private-client brokers, but good news for those who wish to get on with life.
The O'Higgins' system also works well as a means of selecting a single stock. Simply perform the selection as described above and then pick out the share with the second lowest absolute share price. Mr O'Higgins calls this selection the "penultimate profit prospect", or PPP for short.