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  • 11 Reasons To Be A Dividend Growth Investor [View article]
    Benjamin Graham - also known as The Dean of Wall Street and The Father of Value Investing - was a scholar and financial analyst who mentored legendary investors such as Warren Buffett, William J. Ruane, Irving Kahn and Walter J. Schloss.

    Warren Buffett once gave a speech at Columbia Business School explaining how Graham's record of creating exceptional investors (such as Buffett himself) is unquestionable, and how Graham's principles are everlasting. The speech is now known as "The Superinvestors of Graham-and-Doddsville".

    But most Graham analyses today only follow the quantitative part of Graham's recommendations (NCAV, Graham Number, etc.) without the supporting qualitative criteria, thus leading to the misconception that Graham only recommended inexpensive stocks.

    Here's a note on Value and Growth from Warren Buffett's 1992 letter to shareholders:
    "most analysts feel they must choose between two approaches customarily thought to be in opposition: "value" and "growth."
    "In our opinion, the two approaches are joined at the hip: Growth is always a component in the calculation of value, constituting a variable whose importance can range from negligible to enormous and whose impact can be negative as well as positive."

    Buffett describes Graham's book - The Intelligent Investor - as "by far the best book about investing ever written" (in its preface).

    Graham's first recommended strategy - for casual investors - was to invest in Index stocks.
    For more serious investors, Graham recommended three different categories of stocks - Defensive, Enterprising and NCAV - and 17 qualitative and quantitative rules for identifying them.
    For advanced investors, Graham described various special situations or "workouts".

    For example, given below are the actual Graham ratings for Wells Fargo & Co (WFC), with no adjustments other than those for inflation.

    Defensive Graham investment requires that all ratings be 100% or more.
    Enterprising Graham investment requires minimum ratings of - N/A, 75%, 90%, 50%, 5%, N/A and 137%.

    Wells Fargo & Co - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 16,664.00%
    Current Assets ÷ [2 x Current Liabilities]: 1.47%
    Net Current Assets ÷ Long Term Debt: 0.00%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 100.00%
    Earnings Growth (100% ⇒ 30% Growth): 123.42%
    Graham Number ÷ Previous Close: 93.73%

    Note: Stocks failing Graham's rules are not necessarily bad investments. They may fall under Graham's "special situations" category. Graham's rules are also extremely selective.

    Growth is very much a part of true Value Investing, and is checked for objectively - using past growth rates - in Graham's stock selection framework.
    May 30, 2015. 12:38 PM | Likes Like |Link to Comment
  • KLA-Tencor Corp. Is A Great Opportunity For Value Investors [View article]
    The ModernGraham website cites the following formula as one of the Graham methods applied:
    Intrinsic Value = EPS x (8.5 + 2xGrowth)

    Benjamin Graham actually gave several warnings with this formula and only mentioned it briefly to demonstrate why the market's growth rate expectations are rarely justified. But due to an omission in recent editions of The Intelligent Investor, this formula is often mistakenly used today instead of Graham's actual (and more thorough) methods of stock valuation.

    Article: Understanding The Benjamin Graham Formula Correctly (http://seekingalpha.co...) discusses the issue in detail.

    Another ModernGraham rule mentioned in the above article is:
    "Adequate Size of Enterprise - market capitalization of at least $2 billion"

    Graham actually recommended "Not less than $100 million of annual sales" for this rule. Checking for Market Capitalization instead of Sales will - all else being equal - rate overvalued stocks higher than undervalued ones.

    Graham's first recommended strategy - for casual investors - was to invest in Index stocks.
    For more serious investors, Graham recommended three different categories of stocks - Defensive, Enterprising and NCAV - and 17 qualitative and quantitative rules for identifying them.
    For advanced investors, Graham described various special situations or "workouts".

    For example, given below are the actual Graham ratings for KLA-Tencor Corp (KLAC), with no adjustments other than those for inflation.

    Defensive Graham investment requires that all ratings be 100% or more.
    Enterprising Graham investment requires minimum ratings of - N/A, 75%, 90%, 50%, 5%, N/A and 137%.

    KLA-Tencor Corp - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 558.00%
    Current Assets ÷ [2 x Current Liabilities]: 255.97%
    Net Current Assets ÷ Long Term Debt: 493.45%
    Earnings Stability (100% ⇒ 10 Years): 50.00%
    Dividend Record (100% ⇒ 20 Years): 55.00%
    Earnings Growth (100% ⇒ 30% Growth): 126.64%
    Graham Number ÷ Previous Close: 72.70%

    Note: Stocks failing Graham's rules are not necessarily bad investments. They may fall under Graham's "special situations" category. Graham's rules are also extremely selective.
    May 30, 2015. 11:55 AM | 1 Like Like |Link to Comment
  • Why Investing Is A Game Of Failure [View article]
    Incidentally, Graham's first recommended strategy - for casual investors - was to invest in Index stocks.
    For more serious investors, Graham recommended three different categories of stocks - Defensive, Enterprising and NCAV - and 17 qualitative and quantitative rules for identifying them.
    For advanced investors, Graham described various special situations or "workouts".

    The first requires almost no analysis, and is easily accomplished today with a good S&P500 Index fund.

    Also, the Graham formula used on the oldschoolvalue website is a variation of:
    Intrinsic Value = EPS x (8.5 + 2xGrowth)

    Benjamin Graham actually gave several warnings with this formula and only mentioned it briefly to demonstrate why the market's growth rate expectations are rarely justified. But due to an omission in recent editions of The Intelligent Investor, this formula is often mistakenly used today instead of Graham's actual (and more thorough) methods of stock valuation.

    Article: Understanding The Benjamin Graham Formula Correctly (http://seekingalpha.co...) discusses the issue in detail.

    Misquotes and misinterpretations of Value Investing are quite common these days.

    Here's another interesting one, involving Charlie Munger:
    http://seekingalpha.co...
    May 28, 2015. 04:00 PM | Likes Like |Link to Comment
  • The Blackstone Group L.P.: Still A Buy Close To Its 52-Week High? [View article]
    Benjamin Graham - also known as The Dean of Wall Street and The Father of Value Investing - was a scholar and financial analyst who mentored legendary investors such as Warren Buffett, William J. Ruane, Irving Kahn and Walter J. Schloss.

    Warren Buffett once gave a speech at Columbia Business School explaining how Graham's record of creating exceptional investors (such as Buffett himself) is unquestionable, and how Graham's principles are everlasting. The speech is now called as "The Superinvestors of Graham-and-Doddsville".

    Here's what Buffett said about momentum and one such "superinvestor":
    "He’s not looking at quarterly earnings projections, he’s not looking at next year’s earnings, he’s not thinking about what day of the week it is, he doesn’t care what investment research from any place says, he’s not interested in price momentum, volume, or anything. He’s simply asking: What is the business worth?"

    Buffett describes Graham's book - The Intelligent Investor - as "by far the best book about investing ever written" (in its preface).

    Given below are the Graham ratings for Blackstone Group LP (BX), with no adjustments other than those for inflation.

    Defensive Graham investment requires that all ratings be 100% or more.
    Enterprising Graham investment requires minimum ratings of - N/A, 75%, 90%, 50%, 5%, N/A and 137%.

    Blackstone Group LP - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 1,664.00%
    Current Assets ÷ [2 x Current Liabilities]: 264.06%
    Net Current Assets ÷ Long Term Debt: 251.00%
    Earnings Stability (100% ⇒ 10 Years): 30.00%
    Dividend Record (100% ⇒ 20 Years): 45.00%
    Earnings Growth (100% ⇒ 30% Growth): 28.27%
    Graham Number ÷ Previous Close: 44.67%

    Note: Stocks failing Graham's rules are not necessarily bad investments. They may fall under Graham's "special situations" category. Graham's rules are also extremely selective.
    May 27, 2015. 02:55 PM | 1 Like Like |Link to Comment
  • IBM: The Weakest Stock Out Of Buffett's Big 4 [View article]
    Benjamin Graham - also known as The Dean of Wall Street and The Father of Value Investing - was a scholar and financial analyst who mentored legendary investors such as Warren Buffett, William J. Ruane, Irving Kahn and Walter J. Schloss.

    Buffett describes Graham's book - The Intelligent Investor - as "by far the best book about investing ever written" (in its preface).

    Graham's first recommended strategy - for casual investors - was to invest in Index stocks.
    For more serious investors, Graham recommended three different categories of stocks - Defensive, Enterprising and NCAV - and 17 qualitative and quantitative rules for identifying them.
    For advanced investors, Graham described various special situations or "workouts".

    The first requires almost no analysis, and is easily accomplished today with a good S&P500 Index fund.
    The last requires more than the average level of ability and experience. Such stocks are also not amenable to impartial algorithmic analysis, and require a case-specific approach.

    But Defensive, Enterprising and NCAV stocks can be reliably detected by today's data-mining software, and offer a great avenue for accurate automated analysis and profitable investment.

    For example, given below are the actual Graham ratings for International Business Machines Corp (IBM), with no adjustments other than those for inflation.

    Defensive Graham investment requires that all ratings be 100% or more.
    Enterprising Graham investment requires minimum ratings of - N/A, 75%, 90%, 50%, 5%, N/A and 137%.

    International Business Machines Corp - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 18,030.00%
    Current Assets ÷ [2 x Current Liabilities]: 62.40%
    Net Current Assets ÷ Long Term Debt: 28.00%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 100.00%
    Earnings Growth (100% ⇒ 30% Growth): 172.99%
    Graham Number ÷ Previous Close: 35.50%

    Note: Stocks failing Graham's rules are not necessarily bad investments. They may fall under Graham's "special situations" category. Graham's rules are also extremely selective.
    May 26, 2015. 07:36 PM | 2 Likes Like |Link to Comment
  • Visa Is Trading At A Fair Value For Enterprising Investors [View article]
    The ModernGraham website cites the following formula as one of the Graham methods applied:
    Intrinsic Value = EPS x (8.5 + 2xGrowth)

    Benjamin Graham actually gave several warnings with this formula and only mentioned it briefly to demonstrate why the market's growth rate expectations are rarely justified. But due to an omission in recent editions of The Intelligent Investor, this formula is often mistakenly used today instead of Graham's actual (and more thorough) methods of stock valuation.

    Article: Understanding The Benjamin Graham Formula Correctly (http://seekingalpha.co...) discusses the issue in detail.

    Another ModernGraham rule mentioned in the above article is:
    "Adequate Size of Enterprise - market capitalization of at least $2 billion"

    Graham actually recommended "Not less than $100 million of annual sales" for this rule. Checking for Market Capitalization instead of Sales will - all else being equal - rate overvalued stocks higher than undervalued ones.

    Graham's first recommended strategy - for casual investors - was to invest in Index stocks.
    For more serious investors, Graham recommended three different categories of stocks - Defensive, Enterprising and NCAV - and 17 qualitative and quantitative rules for identifying them.
    For advanced investors, Graham described various special situations or "workouts".

    The first requires almost no analysis, and is easily accomplished today with a good S&P500 Index fund.
    The last requires more than the average level of ability and experience. Such stocks are also not amenable to impartial algorithmic analysis, and require a case-specific approach.

    But Defensive, Enterprising and NCAV stocks can be reliably detected by today's data-mining software, and offer a great avenue for accurate automated analysis and profitable investment.

    For example, given below are the actual Graham ratings for Visa Inc (V), with no adjustments other than those for inflation.

    Defensive Graham investment requires that all ratings be 100% or more.
    Enterprising Graham investment requires minimum ratings of - N/A, 75%, 90%, 50%, 5%, N/A and 137%.

    Visa Inc - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 2,586.00%
    Current Assets ÷ [2 x Current Liabilities]: 79.60%
    Net Current Assets ÷ Long Term Debt: 100.00%
    Earnings Stability (100% ⇒ 10 Years): 70.00%
    Dividend Record (100% ⇒ 20 Years): 40.00%
    Earnings Growth (100% ⇒ 30% Growth): 0.00%
    Graham Number ÷ Previous Close: 28.85%

    Note: Stocks failing Graham's rules are not necessarily bad investments. They may fall under Graham's "special situations" category. Graham's rules are also extremely selective.
    May 23, 2015. 04:32 PM | Likes Like |Link to Comment
  • Abbott Laboratories: The Future Is As Bright As The Past [View article]
    > When Benjamin Graham wrote The Intelligent Investor, he pointed to three stocks that would be excellent lifelong holdings. He cited Abbott Laboratories (NYSE:ABT),

    Could you please share a reference for this?
    The only references to Abbott Laboratories in The Intelligent Investor are on page 372, and in the index (pointing to page 372).

    That bit was not written by Graham.
    It's part of the commentary written by Jason Zweig a few years ago.

    Graham's first recommended strategy - for casual investors - was to invest in Index stocks.
    For more serious investors, Graham recommended three different categories of stocks - Defensive, Enterprising and NCAV - and 17 qualitative and quantitative rules for identifying them.
    For advanced investors, Graham described various special situations or "workouts".

    The first requires almost no analysis, and is easily accomplished today with a good S&P500 Index fund.
    The last requires more than the average level of ability and experience. Such stocks are also not amenable to impartial algorithmic analysis, and require a case-specific approach.

    But Defensive, Enterprising and NCAV stocks can be reliably detected by today's data-mining software, and offer a great avenue for accurate automated analysis and profitable investment.

    For example, given below are the actual Graham ratings for Abbott Laboratories (ABT), with no adjustments other than those for inflation.

    Defensive Graham investment requires that all ratings be 100% or more.
    Enterprising Graham investment requires minimum ratings of - N/A, 75%, 90%, 50%, 5%, N/A and 137%.

    Abbott Laboratories - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 4,078.00%
    Current Assets ÷ [2 x Current Liabilities]: 72.45%
    Net Current Assets ÷ Long Term Debt: 138.76%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 100.00%
    Earnings Growth (100% ⇒ 30% Growth): 94.28%
    Graham Number ÷ Previous Close: 55.13%

    Note: Stocks failing Graham's rules are not necessarily bad investments. They may fall under Graham's "special situations" category. Graham's rules are also extremely selective.
    May 22, 2015. 04:51 PM | 2 Likes Like |Link to Comment
  • Bed Bath & Beyond: An Attractive Opportunity For Value Investors [View article]
    The ModernGraham website cites the following formula as one of the Graham methods applied:
    Intrinsic Value = EPS x (8.5 + 2xGrowth)

    Benjamin Graham actually gave several warnings with this formula and only mentioned it briefly to demonstrate why the market's growth rate expectations are rarely justified. But due to an omission in recent editions of The Intelligent Investor, this formula is often mistakenly used today instead of Graham's actual (and more thorough) methods of stock valuation.

    Article: Understanding The Benjamin Graham Formula Correctly (http://seekingalpha.co...) discusses the issue in detail.

    Another ModernGraham rule mentioned in the above article is:
    "Adequate Size of Enterprise - market capitalization of at least $2 billion"

    Graham actually recommended "Not less than $100 million of annual sales" for this rule. Checking for Market Capitalization instead of Sales will - all else being equal - rate overvalued stocks higher than undervalued ones.

    Given below are the actual Graham ratings for Bed Bath & Beyond Inc (BBBY), with no adjustments other than those for inflation.

    Defensive Graham investment requires that all ratings be 100% or more.
    Enterprising Graham investment requires minimum ratings of - N/A, 75%, 90%, 50%, 5%, N/A and 137%.

    Bed Bath & Beyond Inc - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 2,376.00%
    Current Assets ÷ [2 x Current Liabilities]: 105.10%
    Net Current Assets ÷ Long Term Debt: 142.73%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 0.00%
    Earnings Growth (100% ⇒ 30% Growth): 181.14%
    Graham Number ÷ Previous Close: 57.93%

    Note: Stocks failing Graham's rules are not necessarily bad investments. They may fall under Graham's "special situations" category. Graham's rules are also extremely selective.

    Warren Buffett once wrote a detailed article explaining how Graham's record of creating exceptional investors (such as Buffett himself) is unquestionable, and how Graham's principles are everlasting. The article is called "The Superinvestors of Graham-and-Doddsville".
    May 22, 2015. 04:42 PM | Likes Like |Link to Comment
  • Friedman Industries: A Classic Graham & Schloss Play [View article]
    Friedman Industries, Inc (FRD) does seem to clear both of Benjamin Graham's rules for NCAV (Net Current Asset Value) investment.

    Benjamin Graham - also known as The Dean of Wall Street and The Father of Value Investing - was a scholar and financial analyst who mentored legendary investors such as Warren Buffett, William J. Ruane, Irving Kahn and Walter J. Schloss.

    Buffett describes Graham's book - The Intelligent Investor - as "by far the best book about investing ever written" (in its preface).

    Graham's first recommended strategy - for casual investors - was to invest in Index stocks.
    For more serious investors, Graham recommended three different categories of stocks - Defensive, Enterprising and NCAV - and 17 qualitative and quantitative rules for identifying them.
    For advanced investors, Graham described various special situations or "workouts".

    The first requires almost no analysis, and is easily accomplished today with a good S&P500 Index fund.
    The last requires more than the average level of ability and experience. Such stocks are also not amenable to impartial algorithmic analysis, and require a case-specific approach.

    But Defensive, Enterprising and NCAV stocks can be reliably detected by today's data-mining software, and offer a great avenue for accurate automated analysis and profitable investment.

    Graham recommended that an NCAV stock also have a positive EPS figure to be eligible for investment.

    The positive EPS requirement is the qualitative check for NCAV stocks; and is - if you think about it - a very logical rule. There's really not much point buying a stock for its current assets (cash equivalents), if the company's losing money.

    Warren Buffett once wrote a detailed article explaining how Graham's record of creating exceptional investors (such as Buffett himself) is unquestionable, and how Graham's principles are everlasting. The article is called "The Superinvestors of Graham-and-Doddsville".
    May 21, 2015. 06:07 PM | Likes Like |Link to Comment
  • Mattel Is A Strong Company But Needs To Show More Growth [View article]
    The ModernGraham website cites the following formula as one of the Graham methods applied:
    Intrinsic Value = EPS x (8.5 + 2xGrowth)

    Benjamin Graham actually gave several warnings with this formula and only mentioned it briefly to demonstrate why the market's growth rate expectations are rarely justified. But due to an omission in recent editions of The Intelligent Investor, this formula is often mistakenly used today instead of Graham's actual (and more thorough) methods of stock valuation.

    Article: Understanding The Benjamin Graham Formula Correctly (http://seekingalpha.co...) discusses the issue in detail.

    Another ModernGraham rule mentioned in the above article is:
    "Adequate Size of Enterprise - market capitalization of at least $2 billion"

    Graham actually recommended "Not less than $100 million of annual sales" for this rule. Checking for Market Capitalization instead of Sales will - all else being equal - rate overvalued stocks higher than undervalued ones.

    Given below are the actual Graham ratings for Mattel Inc (MAT), with no adjustments other than those for inflation.

    Defensive Graham investment requires that all ratings be 100% or more.
    Enterprising Graham investment requires minimum ratings of - N/A, 75%, 90%, 50%, 5%, N/A and 137%.

    Mattel Inc - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 1,200.00%
    Current Assets ÷ [2 x Current Liabilities]: 146.28%
    Net Current Assets ÷ Long Term Debt: 99.86%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 100.00%
    Earnings Growth (100% ⇒ 30% Growth): 117.71%
    Graham Number ÷ Previous Close: 78.92%

    Note: Stocks failing Graham's rules are not necessarily bad investments. They may fall under Graham's "special situations" category. Graham's rules are also extremely selective.

    Warren Buffett once wrote a detailed article explaining how Graham's record of creating exceptional investors (such as Buffett himself) is unquestionable, and how Graham's principles are everlasting. The article is called "The Superinvestors of Graham-and-Doddsville".
    May 21, 2015. 04:55 PM | 1 Like Like |Link to Comment
  • A ModernGraham Review Of The Auto Industry [View article]
    The ModernGraham website cites the following formula as one of the Graham methods applied:
    Intrinsic Value = EPS x (8.5 + 2xGrowth)

    Benjamin Graham actually gave several warnings with this formula and only mentioned it briefly to demonstrate why the market's growth rate expectations are rarely justified. But due to an omission in recent editions of The Intelligent Investor, this formula is often mistakenly used today instead of Graham's actual (and more thorough) methods of stock valuation.

    Article: Understanding The Benjamin Graham Formula Correctly (http://seekingalpha.co...) discusses the issue in detail.

    Another rule mentioned on the ModernGraham website is:
    "Adequate Size of Enterprise - market capitalization of at least $2 billion"

    Graham actually recommended "Not less than $100 million of annual sales" for this rule. Checking for Market Capitalization instead of Sales will - all else being equal - rate overvalued stocks higher than undervalued ones.

    For example, given below are the actual Graham ratings for PACCAR Inc (PCAR), with no adjustments other than those for inflation.

    Defensive Graham investment requires that all ratings be 100% or more.
    Enterprising Graham investment requires minimum ratings of - N/A, 75%, 90%, 50%, 5%, N/A and 137%.

    PACCAR Inc - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 3,890.00%
    Current Assets ÷ [2 x Current Liabilities]: 126.07%
    Net Current Assets ÷ Long Term Debt: 154.55%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 100.00%
    Earnings Growth (100% ⇒ 30% Growth): 77.22%
    Graham Number ÷ Previous Close: 58.58%

    Note: Stocks failing Graham's rules are not necessarily bad investments. They may fall under Graham's "special situations" category. Graham's rules are also extremely selective.

    Warren Buffett once wrote a detailed article explaining how Graham's record of creating exceptional investors (such as Buffett himself) is unquestionable, and how Graham's principles are everlasting. The article is called "The Superinvestors of Graham-and-Doddsville".
    May 21, 2015. 04:50 PM | Likes Like |Link to Comment
  • How Not To Beat The Market [View article]
    Nice points!
    But do note that excessive diversification can compromise quality of research too.

    Buffett once said:
    "Wide diversification is only required when investors do not understand what they are doing."

    Also, George Soros actually has an elaborate thesis called the "Theory of reflexivity" which he applies to financial markets.

    In fact, the theory of reflexivity is a direct refutation of Efficient Market Hypothesis (EMH); a theory that Buffett too derided in "The Superinvestors of Graham-and-Doddsville".

    Benjamin Graham - also known as The Dean of Wall Street and The Father of Value Investing - was a scholar and financial analyst who mentored legendary investors such as Warren Buffett, William J. Ruane, Irving Kahn and Walter J. Schloss.

    Warren Buffett once wrote a detailed article explaining how Benjamin Graham's record of creating exceptional investors (such as Buffett himself) is unquestionable, and how Graham's principles are everlasting. The article is called "The Superinvestors of Graham-and-Doddsville".

    Graham's Value Investing framework acknowledges the stock market's randomness and irrationality, and uses them to the investor's favor. This is why true Value Investing (not bargain hunting) consistently outperforms more impressive looking strategies that are based on the less tenable premise that the stock market can be predicted.

    Article: Value Investing Is Perfect For The Cynical (http://seekingalpha.co...) has more details.

    Thank you.
    May 21, 2015. 03:58 PM | Likes Like |Link to Comment
  • Progressive Corporation Is A Fair Value For Investors [View article]
    The ModernGraham website cites the following formula as one of the Graham methods applied:
    Intrinsic Value = EPS x (8.5 + 2xGrowth)

    Benjamin Graham actually gave several warnings with this formula and only mentioned it briefly to demonstrate why the market's growth rate expectations are rarely justified. But due to an omission in recent editions of The Intelligent Investor, this formula is often mistakenly used today instead of Graham's actual (and more thorough) methods of stock valuation.

    Article: Understanding The Benjamin Graham Formula Correctly (http://seekingalpha.co...) discusses the issue in detail.

    Another ModernGraham rule mentioned in the above article is:
    "Adequate Size of Enterprise - market capitalization of at least $2 billion"

    Graham actually recommended "Not less than $100 million of annual sales" for this rule. Checking for Market Capitalization instead of Sales will - all else being equal - rate overvalued stocks higher than undervalued ones.

    Given below are the actual Graham ratings for Progressive Corp (PGR), with no adjustments other than those for inflation.

    Defensive Graham investment requires that all ratings be 100% or more.
    Enterprising Graham investment requires minimum ratings of - N/A, 75%, 90%, 50%, 5%, N/A and 137%.

    Progressive Corp - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 3,912.00%
    Current Assets ÷ [2 x Current Liabilities]: 0.00%
    Net Current Assets ÷ Long Term Debt: 0.00%
    Earnings Stability (100% ⇒ 10 Years): 60.00%
    Dividend Record (100% ⇒ 20 Years): 30.00%
    Earnings Growth (100% ⇒ 30% Growth): 77.75%
    Graham Number ÷ Previous Close: 81.49%

    Note: Stocks failing Graham's rules are not necessarily bad investments. They may fall under Graham's "special situations" category. Graham's rules are also extremely selective.

    Warren Buffett once wrote a detailed article explaining how Graham's record of creating exceptional investors (such as Buffett himself) is unquestionable, and how Graham's principles are everlasting. The article is called "The Superinvestors of Graham-and-Doddsville".
    May 21, 2015. 03:45 PM | Likes Like |Link to Comment
  • Learning From The Masters: Q&A Session With Chris DeMuth Jr. [View article]
    When Warren Buffett advises investors to own a low cost S&P 500 tracking index fund, he is simply outlining another application of Benjamin Graham's Value Investing principles.

    Benjamin Graham - also known as The Dean of Wall Street and The Father of Value Investing - was a scholar and financial analyst who mentored legendary investors such as Warren Buffett, William J. Ruane, Irving Kahn and Walter J. Schloss.

    Buffett describes Graham's book - The Intelligent Investor - as "by far the best book about investing ever written" (in its preface).

    Graham's first recommended strategy - for casual investors - was to invest in Index stocks.
    For more serious investors, Graham recommended three different categories of stocks - Defensive, Enterprising and NCAV - and 17 qualitative and quantitative rules for identifying them.
    For advanced investors, Graham described various special situations or "workouts".

    Serenity's own 2+ year old article - "How To Build A Complete Benjamin Graham Portfolio" (http://seekingalpha.co...) - recommends a Vanguard S&P500 index fund as a good application of Graham's first strategy for investors.
    May 21, 2015. 03:29 PM | Likes Like |Link to Comment
  • Value Investing Is Perfect For The Cynical [View article]
    Thank you, Hardog
    May 21, 2015. 01:49 PM | Likes Like |Link to Comment
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