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  • Creating A Performance Tailwind [View article]
    You're correct, CraigLazzara. Graham was referring to stocks of lower quality picked at random from the entire market, not just the S&P 500.

    Thank you for your insightful article and comments!
    Jul 2 01:59 AM | Likes Like |Link to Comment
  • Creating A Performance Tailwind [View article]
    Thank you, CraigLazzara!

    Do you mean that they outperform when the "market" is up?
    Graham actually wrote very favorably about a cap-weighted indices such as the S&P 500, saying they outperformed random stock lists and even actively managed funds in the long run.

    Any thoughts on Graham's observation that inferior issues picked at random underperform and also "delay their full recovery—in many cases indefinitely"?
    Jul 1 01:59 PM | Likes Like |Link to Comment
  • Creating A Performance Tailwind [View article]
    Thank you for an insightful article!

    Isn't an equal-weighted portfolio more prone to fluctuations in either direction than a cap-weighted one? Would the former not underperform the latter under unfavorable market conditions?

    Benjamin Graham himself mentions this tendency of randomly selected stocks in Chapter 15 of The Intelligent Investor - Stock Selection for the Enterprising Investor:

    "The most important fact that emerges from our various tests relates to the performance of stocks bought at random........ These comparative results undoubtedly reflect the tendency of smaller issues of inferior quality to be relatively overvalued in bull markets, and not only to suffer more serious declines than the stronger issues in the ensuing price collapse, but also to delay their full recovery—in many cases indefinitely. "

    "Evidently the larger emphasis given to giant enterprises by the S&P method made a significant difference in the results, and points up once again their greater price stability as compared with “run-of-the-mine” companies."
    Jun 30 05:28 PM | Likes Like |Link to Comment
  • 5 Companies With Low PE Ratios For Defensive Investors [View article]
    Given below are the Defensive Graham ratings for the above stocks.

    Defensive Graham investment requires all the ratings to be at least 100%.
    Enterprising Graham investment requires the ratings to be at least - CA/CL : 75%, CA/LTD : 90%, EPS Stability: 50%, Div Record: 5% and GN/Price: 137%.

    Unum Group - Defensive Graham Ratings
    Sales | Size: 2,070.00%
    Current Assets / Current Liabilities: 0.00%
    Current Assets / Long Term Debt: 0.00%
    Earnings Stability: 90.00%
    Dividend Record: 100.00%
    Earnings Growth: 95.28%
    Graham Number / Current Price: 142.46%

    Chevron Corporation - Defensive Graham Ratings
    Sales | Size: 45,770.00%
    Current Assets / Current Liabilities: 76.09%
    Current Assets / Long Term Debt: 86.33%
    Earnings Stability: 100.00%
    Dividend Record: 100.00%
    Earnings Growth: 128.96%
    Graham Number / Current Price: 101.32%

    Jpmorgan Chase & Co - Defensive Graham Ratings
    Sales | Size: 19,322.00%
    Current Assets / Current Liabilities: 0.00%
    Current Assets / Long Term Debt: 0.00%
    Earnings Stability: 100.00%
    Dividend Record: 100.00%
    Earnings Growth: 118.08%
    Graham Number / Current Price: 105.38%

    Ace Limited - Defensive Graham Ratings
    Sales | Size: 3,852.00%
    Current Assets / Current Liabilities: 0.00%
    Current Assets / Long Term Debt: 0.00%
    Earnings Stability: 100.00%
    Dividend Record: 100.00%
    Earnings Growth: 121.70%
    Graham Number / Current Price: 135.55%

    Joy Global Inc - Defensive Graham Ratings
    Sales | Size: 1,002.00%
    Current Assets / Current Liabilities: 103.72%
    Current Assets / Long Term Debt: 116.30%
    Earnings Stability: 100.00%
    Dividend Record: 55.00%
    Earnings Growth: 196.39%
    Graham Number / Current Price: 50.00%

    The final Assessment for the stocks is also given below.
    The Quantitative Result for a stock has to be 100% for true Graham investment (Quantitative Result = Graham Price / Previous Close).

    Unum Group - Final Graham Assessment
    Defensive Price (Graham Number): $49.87
    Enterprising Price (Serenity Number): $36.42
    NCAV Price: $-195.16
    Qualitative Result: OK / NCAV
    Graham Price: $0.00
    Previous Close: $35.01
    Quantitative Result: 0.00%

    Chevron Corporation - Final Graham Assessment
    Defensive Price (Graham Number): $132.08
    Enterprising Price (Serenity Number): $96.46
    NCAV Price: $-28.42
    Qualitative Result: OK / NCAV
    Graham Price: $0.00
    Previous Close: $130.36
    Quantitative Result: 0.00%

    Jpmorgan Chase & Co - Final Graham Assessment
    Defensive Price (Graham Number): $60.62
    Enterprising Price (Serenity Number): $44.27
    NCAV Price: $-589.88
    Qualitative Result: OK / NCAV
    Graham Price: $0.00
    Previous Close: $57.53
    Quantitative Result: 0.00%

    Ace Limited - Final Graham Assessment
    Defensive Price (Graham Number): $140.14
    Enterprising Price (Serenity Number): $102.35
    NCAV Price: $-193.31
    Qualitative Result: OK / NCAV
    Graham Price: $0.00
    Previous Close: $103.39
    Quantitative Result: 0.00%

    Joy Global Inc - Final Graham Assessment
    Defensive Price (Graham Number): $30.94
    Enterprising Price (Serenity Number): $22.60
    NCAV Price: $-1.06
    Qualitative Result: OK / NCAV
    Graham Price: $0.00
    Previous Close: $61.89
    Quantitative Result: 0.00%

    These figures are not meant to imply that stocks that don't clear the Graham criteria are bad investments.
    The Graham criteria are just extremely selective. Only stocks of very high investment quality selling at very attractive price ratios clear them.

    http://seekingalpha.co... given a detailed tutorial on finding stocks that meet Graham's criteria as closely as possible today.
    Jun 29 03:54 AM | Likes Like |Link to Comment
  • 5 Undervalued Companies With A High Dividend Yield For The Enterprising Investor [View article]
    Given below are the Defensive Graham ratings for the above stocks.

    Defensive Graham investment requires all the ratings to be at least 100%.
    Enterprising Graham investment requires the ratings to be at least - Assets / Liabilities: 75%, Assets / Debt: 90%, Earnings Stability: 50%, Dividend Record: 5% and Graham Number / Price: 137%.

    Ford Motor Company - Defensive Graham Ratings
    Sales: 29,384.00%
    Assets / Liabilities: 102.23%
    Assets / Debt: 101.06%
    Earnings Stability: 50.00%
    Dividend Record: 10.00%
    Earnings Growth: 83.46%
    Graham Number / Price: 91.25%

    International Paper Co - Defensive Graham Ratings
    Sales: 5,816.00%
    Assets / Liabilities: 88.01%
    Assets / Debt: 44.16%
    Earnings Stability: 50.00%
    Dividend Record: 100.00%
    Earnings Growth: 87.09%
    Graham Number / Price: 44.63%

    Gannett Co. Inc - Defensive Graham Ratings
    Sales: 1,032.00%
    Assets / Liabilities: 95.49%
    Assets / Debt: 24.72%
    Earnings Stability: 50.00%
    Dividend Record: 100.00%
    Earnings Growth: 25.93%
    Graham Number / Price: 0.00%

    Kla-tencor Corp - Defensive Graham Ratings
    Sales: 568.00%
    Assets / Liabilities: 252.55%
    Assets / Debt: 466.95%
    Earnings Stability: 40.00%
    Dividend Record: 45.00%
    Earnings Growth: 170.82%
    Graham Number / Price: 55.51%

    Fifth Third Bancorp - Defensive Graham Ratings
    Sales: 1,358.00%
    Assets / Liabilities: 0.00%
    Assets / Debt: 0.00%
    Earnings Stability: 50.00%
    Dividend Record: 100.00%
    Earnings Growth: 52.55%
    Graham Number / Price: 110.73%

    The final Assessment for the stocks is also given below.
    The Quantitative Result for a stock has to be 100% for true Graham investment (Quantitative Result = Graham Price / Previous Close).

    Ford Motor Company - Final Graham Assessment
    Defensive Price (Graham Number): $15.49
    Enterprising Price (Serenity Number): $11.31
    NCAV Price: -$6.04
    Qualitative Result: Good / Enterprising
    Graham Price: $11.31
    Previous Close: $16.97
    Quantitative Result: 66.65%

    International Paper Co - Final Graham Assessment
    Defensive Price (Graham Number): $21.67
    Enterprising Price (Serenity Number): $15.82
    NCAV Price: -$33.00
    Qualitative Result: OK / NCAV
    Graham Price: $0.00
    Previous Close: $48.55
    Quantitative Result: 0.00%

    Gannett Co. Inc - Final Graham Assessment
    Defensive Price (Graham Number): $0.00
    Enterprising Price (Serenity Number): $0.00
    NCAV Price: -$20.32
    Qualitative Result: OK / NCAV
    Graham Price: $0.00
    Previous Close: $29.19
    Quantitative Result: 0.00%

    Kla-tencor Corp - Final Graham Assessment
    Defensive Price (Graham Number): $38.55
    Enterprising Price (Serenity Number): $28.15
    NCAV Price: $15.39
    Qualitative Result: OK / NCAV
    Graham Price: $15.39
    Previous Close: $69.44
    Quantitative Result: 22.16%

    Fifth Third Bancorp - Final Graham Assessment
    Defensive Price (Graham Number): $23.76
    Enterprising Price (Serenity Number): $17.35
    NCAV Price: -$136.66
    Qualitative Result: OK / NCAV
    Graham Price: $0.00
    Previous Close: $21.46
    Quantitative Result: 0.00%

    http://seekingalpha.co... given a detailed tutorial on finding stocks meeting Graham's actual criteria today.
    Jun 25 10:50 AM | 1 Like Like |Link to Comment
  • 5 Undervalued Companies For Defensive Investors With High Dividend Yields [View article]
    Given below are the Defensive Graham ratings for the above stocks.

    Defensive Graham investment requires all the ratings to be at least 100%.
    Enterprising Graham investment requires the ratings to be at least - Assets / Liabilities: 75%, Assets / Debt: 90%, Earnings Stability: 50%, Dividend Record: 5% and Graham Number / Price: 137%.

    Aflac Inc (AFL) - Defensive Graham Ratings
    Sales: 4,788.00%
    Assets / Liabilities: 0.00%
    Assets / Debt: 0.00%
    Earnings Stability: 100.00%
    Dividend Record: 100.00%
    Earnings Growth: 157.16%
    Graham Number / Price: 108.03%

    Deere & Company (DE) - Defensive Graham Ratings
    Sales: 7,560.00%
    Assets / Liabilities: 102.61%
    Assets / Debt: 107.17%
    Earnings Stability: 100.00%
    Dividend Record: 100.00%
    Earnings Growth: 210.83%
    Graham Number / Price: 78.50%

    National Oilwell Varco Inc (NOV) - Defensive Graham Ratings
    Sales: 4,574.00%
    Assets / Liabilities: 122.96%
    Assets / Debt: 309.46%
    Earnings Stability: 100.00%
    Dividend Record: 25.00%
    Earnings Growth: 310.11%
    Graham Number / Price: 61.05%

    Wells Fargo & Co (WFC) - Defensive Graham Ratings
    Sales: 16,756.00%
    Assets / Liabilities: 0.00%
    Assets / Debt: 0.00%
    Earnings Stability: 100.00%
    Dividend Record: 100.00%
    Earnings Growth: 117.87%
    Graham Number / Price: 86.45%

    Whirlpool Corp (WHR) - Defensive Graham Ratings
    Sales: 3,754.00%
    Assets / Liabilities: 51.68%
    Assets / Debt: 12.35%
    Earnings Stability: 100.00%
    Dividend Record: 100.00%
    Earnings Growth: 88.01%
    Graham Number / Price: 45.42%

    Of the above companies, only DE and NOV have a positive Graham price. Their final Graham Assessment is as follows.

    Deere & Company - Final Graham Assessment
    Defensive Price (Graham Number): $71.74
    Enterprising Price (Serenity Number): $52.39
    NCAV Price: -$11.11
    Qualitative Result: Excellent / Defensive
    Graham Price: $71.74
    Previous Close: $91.39
    Quantitative Result: 78.50%

    National Oilwell Varco Inc - Final Graham Assessment
    Defensive Price (Graham Number): $49.06
    Enterprising Price (Serenity Number): $35.83
    NCAV Price: $8.97
    Qualitative Result: Good / Enterprising
    Graham Price: $35.83
    Previous Close: $80.37
    Quantitative Result: 44.58%

    http://seekingalpha.co... shows how to find stocks that meet Benjamin Graham's seventeen stock selection criteria today.
    Jun 24 05:45 PM | Likes Like |Link to Comment
  • 5 More Undervalued Companies For Enterprising Investors [View article]
    You're not missing anything, JMajoris!
    Of the above stocks, AAPL alone passes any complete set of Graham criteria.

    But note that the Qualitative Result for AAPL is "Good / Enterprising". AAPL does not meet qualitative Defensive criteria specified by Graham.

    So that gives AAPL:
    Qualitative Result: Good / Enterprising
    Graham Price: $256.12
    Jun 23 02:41 PM | Likes Like |Link to Comment
  • The 'Real Story' Behind Orexigen Therapeutics, Inc. [View article]
    Hello rufusthrat,

    As quoted in the comment above, Graham actually did not recommend short selling for retail investors.
    Jun 23 02:37 PM | Likes Like |Link to Comment
  • What Would Benjamin Graham And John Neff Pay For Realty Income? [View article]
    Again, thank you for the comment, 7716391.
    Nothing wrong with a healthy discussion.

    But 1% up today. Really?
    In the words of Zoe (from the Serenity movie) - "at last, we can retire and give up this life of crime".

    No one is saying Realty Income Corporation is a bad stock.
    In fact, it scores 100% in 3 of the 7 Defensive Graham ratings above and that's better than a lot of stocks out there.

    But it seems to fare very poorly in the financial condition department, hardly seems to have grown earnings at all in the last 10 years, and is selling for a lot more than Graham recommends paying.

    There are just a lot of better stocks out there for your money, at least according to Graham.
    http://seekingalpha.co... will show you how to find them.
    Jun 18 11:23 PM | Likes Like |Link to Comment
  • 5 More Undervalued Companies For Enterprising Investors [View article]
    Given below are the inflation-adjusted Graham Defensive ratings for the above stocks.
    For stocks with a positive NCAV, the NCAV and current price are also mentioned.

    Defensive Graham investment requires all the ratings to be at least 100%.
    Enterprising Graham investment requires the ratings to be at least:
    Assets / Liabilities: 75%
    Assets / Debt: 90%
    Earnings Stability: 50%
    Dividend Record: 5%
    Graham Number / Price: 137%

    APPLE Inc - Defensive Graham Ratings
    Sales: 34,182.00%
    Assets / Liabilities: 83.93%
    Assets / Debt: 174.69%
    Earnings Stability: 100.00%
    Dividend Record: 10.00%
    Earnings Growth: 1,849.13%
    Graham Number / Price: 380.88%

    COACH Inc - Defensive Graham Ratings
    Sales: 1,016.00%
    Assets / Liabilities: 143.31%
    Assets / Debt: 269,680.00%
    Earnings Stability: 100.00%
    Dividend Record: 25.00%
    Earnings Growth: 237.15%
    Graham Number / Price: 56.84%

    D.R HORTON Inc - Defensive Graham Ratings
    Sales: 1,252.00%
    Assets / Liabilities: 303.20%
    Assets / Debt: 185.59%
    Earnings Stability: 40.00%
    Dividend Record: 0.00%
    Earnings Growth: 29.73%
    Graham Number / Price: 88.74%
    NCAV Price: $9.29
    Previous Close: $23.48

    KLA-TENCOR CORP - Defensive Graham Ratings
    Sales: 568.00%
    Assets / Liabilities: 252.55%
    Assets / Debt: 466.95%
    Earnings Stability: 40.00%
    Dividend Record: 45.00%
    Earnings Growth: 170.82%
    Graham Number / Price: 55.75%
    NCAV Price: $15.39
    Previous Close: $69.14

    VIACOM Inc CLASS B - Defensive Graham Ratings
    Sales: 2,758.00%
    Assets / Liabilities: 88.73%
    Assets / Debt: 24.74%
    Earnings Stability: 80.00%
    Dividend Record: 20.00%
    Earnings Growth: 146.98%
    Graham Number / Price: 0.00%

    Of the above stocks, AAPL alone passes any complete set of Graham criteria.
    The details are given below.

    APPLE Inc - Final Graham Assessment
    Defensive Price (Graham Number): $350.71
    Enterprising Price (Serenity Number): $256.12
    NCAV Price: $-11.30
    Qualitative Result: Good / Enterprising
    Graham Price: $256.12
    Previous Close: $92.08
    Quantitative Result: 100.00%

    COACH Inc passes Graham's Enterprising qualitative criteria.

    COACH Inc - Final Graham Assessment
    Defensive Price (Graham Number): $23.19
    Enterprising Price (Serenity Number): $16.94
    NCAV Price: $3.36
    Qualitative Result: Good / Enterprising
    Graham Price: $16.94
    Previous Close: $40.81
    Quantitative Result: 41.51%

    http://seekingalpha.co... lists all seventeen of the criteria Graham recommended in The Intelligent Investor, and gives step-by-step instructions on how to find stocks that meet them.
    Jun 18 11:28 AM | Likes Like |Link to Comment
  • What Would Benjamin Graham And John Neff Pay For Realty Income? [View article]
    Hello mbkelly75,

    Graham says in that interview that his recommendation was:
    "To try to buy groups of stocks that meet some simple criterion for being undervalued-regardless of the industry and with very little attention to the individual company."

    He was essentially referring to moving away from analyzing individual securities in extreme detail as taught in Security Analysis, to applying common criteria to all stocks as taught in The Intelligent Investor.

    The Graham analysis given above is based on those common criteria in The Intelligent Investor.

    He revised The Intelligent Investor for 25 years and wrote the last edition in 1973, just 3 years before he passed away.

    Thank you!
    Jun 18 10:29 AM | Likes Like |Link to Comment
  • What Would Benjamin Graham And John Neff Pay For Realty Income? [View article]
    Sarcasm noted, 7716391.

    It's not that stocks that don't clear the Graham criteria are bad investments.
    It's about finding the ones that will perform the best.

    The extreme selectivity of the Graham criteria is their biggest strength.
    That's also why the most successful investors are almost all Graham's students.

    Please see Warren Buffett's article "The Superinvestors of Graham-and-Doddsville" for a detailed explanation.
    http://bit.ly/TwFlS8

    Thanks!
    Jun 18 01:04 AM | Likes Like |Link to Comment
  • Investing For Beginners With Benjamin Graham [View article]
    Glad to be of help, tealone!

    Most professionals - doctors, lawyers, accountants etc - can be held accountable for their mistakes. But in finance - since stock markets are considered unpredictable and since the professionals are working with your money - they can take risks with it, lose it, and still get paid. This ability to take risks with no fear of loss to oneself is called Moral Hazard.

    You'd be surprised how many amateurs do admirably in investing, and how many professionals lose sight of the forest for the trees.

    Don't let your unfamiliarity with the field discourage you.
    Having less to disregard and unlearn could be your biggest advantage.
    Jun 17 03:14 PM | 3 Likes Like |Link to Comment
  • What Would Benjamin Graham And John Neff Pay For Realty Income? [View article]
    Hello AaronFunding,

    From the Graham perspective:
    Investment=Forest.
    REITs=Trees.

    Graham's 16 qualitative and quantitative criteria are specifically designed to be able to analyze any stock.

    Thanks!
    Jun 17 02:55 PM | Likes Like |Link to Comment
  • What Would Benjamin Graham And John Neff Pay For Realty Income? [View article]
    Thank you for your comment.

    The intent was not to dispute the validity of the conclusion drawn.
    The intent was only to demonstrate that the analysis wasn't done using Graham's methods (as the title implies), and how it could be done so.

    Also - according to Graham - if two investments have the same growth rates, stability and returns (qualitative and quantitative metrics), whether they derive from services or real estate is irrelevant.
    Jun 16 05:05 PM | Likes Like |Link to Comment
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