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  • Strategic Dividend Reinvestor ETN Packs A Dividend Wallop - With A Twist [View article]
    Nice article!
    Very informative.

    There's a small typo though:
    "An ETF is, instead, a contractual debt arrangement"

    That should probably be "An ETN is"
    Just in case you want to have it corrected, but it's quite inconsequential.

    But please note that Graham's methods of stock selection are still extremely relevant and applicable even today.

    Warren Buffett once wrote an article explaining how Benjamin Graham's principles are everlasting, their results irrefutable, and his students consistently exceptional. It's called "The Superinvestors of Graham-and-Doddsville".

    But most of what Graham actually taught has been forgotten today, and things he warned against are often attributed to him instead.

    Even when Graham's recommended methods are used, they are heavily modified - often beyond recognition - to clear the stocks, rather than having stocks clear them.

    Graham recommended various categories of stocks - Index, Defensive, Enterprising and NCAV. He emphasized that the secret of sound investment was the "Margin of Safety", and specified precise qualitative and quantitative rules for each category.

    http://seekingalpha.co... shows how to do a true 17-point Benjamin Graham assessment for 5000+ NYSE and NASDAQ stocks; with no modifications other than adjustments for inflation.
    Oct 18, 2014. 09:57 AM | Likes Like |Link to Comment
  • 5 More Undervalued Companies For The Enterprising Investor Near 52-Week Lows [View article]
    Dear Readers,

    Benjamin Graham gave the following warnings with this formula:
    1. "Warning: This material is supplied for illustrative purposes only".
    2. "Let the reader not be misled into thinking that such projections have any high degree of reliability".
    3. "Note that we do not suggest that this formula gives the “true value” of a growth stock".

    On the other hand, he distinctly recommends the methods in the unmistakably named "Stock Selection" chapters.

    The two articles mentioned in the earlier comment have references, page numbers and scans of the relevant pages.

    Thank you!
    Oct 17, 2014. 01:23 PM | Likes Like |Link to Comment
  • 5 More Undervalued Companies For The Enterprising Investor Near 52-Week Lows [View article]
    Intrinsic Value = EPS x (8.5 + 2xGrowth)

    Benjamin Graham actually gave several warnings about this formula and only used it to show why such oversimplified growth estimates are unreliable. This formula is popular only due to a printing omission in recent editions of The Intelligent Investor.

    Article 1: http://seekingalpha.co... discusses the issue in detail.

    Warren Buffett once wrote an article explaining how Benjamin Graham's principles are everlasting, their results irrefutable, and his students consistently exceptional. It's called "The Superinvestors of Graham-and-Doddsville".

    But most of what Graham actually taught has been forgotten today, and things he warned against are often attributed to him instead.
    The above formula is just one example.

    Even when Graham's recommended methods are used, they are heavily modified - often beyond recognition - to clear the stocks, rather than having stocks clear them.

    For example:
    "Adequate Size of Enterprise - market capitalization of at least $2 billion."

    Graham actually recommended "Not less than $100 million of annual sales" for ensuring adequate size of a company for Defensive investment. Checking for market capitalization instead of sales will - all other things being equal - rate overvalued stocks better than undervalued ones.

    Even the other rules mentioned here - such as dividend requirements, and PE & PB ratios - are all very different from what Graham actually recommended.

    For example, given below are the actual Graham ratings for Ford Motor Company (F).

    Defensive Graham investment requires all the ratings to be at least 100%.
    Enterprising Graham investment requires the ratings to be at least - CA/2CL : 75%, NCA/LTD : 90%, EPS Stability: 50%, Div Record: 5% and GN/PC: 137%.

    Ford Motor Company - Defensive Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 652.00%
    Current Assets ÷ [2 x Current Liabilities]: 150.39%
    Net Current Assets ÷ Long Term Debt: 199.64%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 0.00%
    Earnings Growth (100% ⇒ 30% Growth): 378.09%
    Graham Number ÷ Previous Close: 50.08%

    The Final Graham Assessment for Ford Motor Company is also given below.
    The Quantitative Result (Graham Price ÷ Previous Close) for a stock has to be 100% for true Graham investment.

    Ford Motor Company - Final Graham Assessment
    Defensive Price (Graham Number): $48.92
    Enterprising Price (Serenity Number): $32.87
    NCAV Price: $5.81
    Qualitative Result: Bargain / NCAV
    Graham Price: $5.81
    Previous Close: $97.68
    Quantitative Result: 5.95%

    Graham recommended various categories of stocks - Index, Defensive, Enterprising and NCAV. He emphasized that the secret of sound investment was the "Margin of Safety", and specified precise qualitative and quantitative rules for each category.

    He also spent nearly 50 years developing and backtesting the 17 rules in his investment framework; a framework that has been repeatedly endorsed by some of the world's most successful investors.

    Article 2: http://seekingalpha.co... shows how to do a true 17-point Benjamin Graham assessment for 5000+ NYSE and NASDAQ stocks; with no modifications other than adjustments for inflation.
    Oct 17, 2014. 08:30 AM | Likes Like |Link to Comment
  • Verizon Communications Inc. Is Focused On Generating Cash And Lowering Debt [View article]
    Before being checked against the Graham Number, Benjamin Graham required that a stock first meet six other qualitative criteria.

    For example, given below are the actual Graham ratings for Verizon Communications (VZ).

    Defensive Graham investment requires all the ratings to be at least 100%.
    Enterprising Graham investment requires the ratings to be at least - CA/2CL : 75%, NCA/LTD : 90%, EPS Stability: 50%, Div Record: 5% and GN/PC: 137%.

    Verizon Communications - Defensive Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 24,110.00%
    Current Assets ÷ [2 x Current Liabilities]: 131.23%
    Net Current Assets ÷ Long Term Debt: 49.01%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 100.00%
    Earnings Growth (100% ⇒ 30% Growth): 60.93%
    Graham Number ÷ Previous Close: 5.95%

    Warren Buffett once wrote an article explaining how Benjamin Graham's principles are everlasting, their results irrefutable, and his students consistently exceptional. It's called "The Superinvestors of Graham-and-Doddsville".

    But most of what Graham actually taught has been forgotten today, or is applied wrongly.
    The Graham Number is just one example.

    Even when Graham's recommended methods are used, they are heavily modified - often beyond recognition - to clear the stocks, rather than having stocks clear them.

    http://seekingalpha.co... shows how to do an exact 17-point Benjamin Graham assessment for 5000+ NYSE and NASDAQ stocks; with no alterations other than adjustments for inflation.
    Oct 16, 2014. 11:23 AM | Likes Like |Link to Comment
  • Interpublic Group Of Companies: An Attractive Opportunity [View article]
    Intrinsic Value = EPS x (8.5 + 2xGrowth)

    Benjamin Graham actually gave several warnings about this formula and only used it to show why such oversimplified growth estimates are unreliable. This formula is popular only due to a printing omission in recent editions of The Intelligent Investor.

    Article 1: http://seekingalpha.co... discusses the issue in detail.

    Warren Buffett once wrote an article explaining how Benjamin Graham's principles are everlasting, their results irrefutable, and his followers consistently exceptional. It's called "The Superinvestors of Graham-and-Doddsville".

    But most of what Graham actually taught has been forgotten today, and things he warned against are often attributed to him instead.
    The above formula is just one example.

    Even when Graham's recommended methods are used, they are heavily modified - often beyond recognition - to clear the stocks, rather than having stocks clear them.

    Given below are the actual Graham ratings for Interpublic Group Of Companies (IPG).

    Defensive Graham investment requires all the ratings to be at least 100%.
    Enterprising Graham investment requires the ratings to be at least - CA/2CL : 75%, NCA/LTD : 90%, EPS Stability: 50%, Div Record: 5% and GN/PC: 137%.

    Interpublic Group Of Companies - Defensive Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 1,424.00%
    Current Assets ÷ [2 x Current Liabilities]: 49.50%
    Net Current Assets ÷ Long Term Debt: 0.00%
    Earnings Stability (100% ⇒ 10 Years): 70.00%
    Dividend Record (100% ⇒ 20 Years): 15.00%
    Earnings Growth (100% ⇒ 30% Growth): 0.00%
    Graham Number ÷ Previous Close: 57.71%

    Graham recommended various categories of stocks - Index, Defensive, Enterprising and NCAV. He emphasized that the secret of sound investment was the "Margin of Safety", and specified precise qualitative and quantitative rules for each category.

    Article 2: http://seekingalpha.co... shows how to do an actual 17-point Benjamin Graham assessment for 5000+ NYSE and NASDAQ stocks; with no modifications other than adjustments for inflation.
    Oct 16, 2014. 11:17 AM | Likes Like |Link to Comment
  • For Buy-And-Hold Investors, It's Really Hard To Lose Money In The Stock Market (Part I) [View article]
    Absolutely, Minutemen.

    Nice work on the article!
    Oct 15, 2014. 01:35 PM | 1 Like Like |Link to Comment
  • Benjamin Graham Would Like Qualcomm Inc. Today [View article]
    Unfortunately, fendermon, you're not alone.
    That's a very common misconception about Graham.

    As mentioned earlier, most of what Graham actually taught has been forgotten today.

    NCAV stocks (or Net-Net stocks / cigar butt stocks) are simply the most well-known of Graham's strategies, and the source of the general misconception that Graham only recommended cheap stocks.

    But Graham actually recommended Index, Defensive and Enterprising stocks before NCAV stocks; and all were allowed higher Quantitative valuations and required greater Qualitative checks.
    Oct 15, 2014. 01:34 PM | Likes Like |Link to Comment
  • Benjamin Graham Would Like Qualcomm Inc. Today [View article]
    She amassed $22 million over a 50 year period by investing carefully and living frugally.

    Definitely an achievement but not quite in the same league as Graham's students - Warren Buffett, Irving Kahn, Walter Schloss... the list is quite long.
    Oct 15, 2014. 08:02 AM | Likes Like |Link to Comment
  • For Buy-And-Hold Investors, It's Really Hard To Lose Money In The Stock Market (Part I) [View article]
    The idea is "buy and hold", not "hold forever".

    The stock market took 25 years to recover from the crash of 1929.
    To have held on to all equity investments at such market levels would have been foolhardy.

    Graham advocated varying one's holdings between 25% and 75% depending on market levels.
    75% in stocks in undervalued markets.
    75% in bonds in overvalued ones.

    The idea of "buy and hold" is to buy stocks for investment, not speculation.
    That includes selling them once they exceed their calculated worth.
    Oct 15, 2014. 07:51 AM | 1 Like Like |Link to Comment
  • How To Know When A REIT Is Worth Buying [View article]
    Nice article, especially the Benjamin Graham references.

    In fact, regarding the importance of the conservation of principal, Graham himself specified:
    "An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return. Operations not meeting these requirements are speculative."

    Warren Buffett once wrote an article explaining how Benjamin Graham's principles are everlasting, their results irrefutable, and his followers consistently exceptional. It's called "The Superinvestors of Graham-and-Doddsville".

    Graham recommended various categories of stocks - Index, Defensive, Enterprising and NCAV. He emphasized that the secret of sound investment was the "Margin of Safety", and specified precise qualitative and quantitative rules for each category.

    For example, given below are the actual Graham ratings for Washington Real Estate Investment Trust (WRE).

    Defensive Graham investment requires all the ratings to be at least 100%.
    Enterprising Graham investment requires the ratings to be at least - CA/2CL : 75%, NCA/LTD : 90%, EPS Stability: 50%, Div Record: 5% and GN/PC: 137%.

    Washington Real Estate Investment Trust - Defensive Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 4,974.00%
    Current Assets ÷ [2 x Current Liabilities]: 187.56%
    Net Current Assets ÷ Long Term Debt: 100.00%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 55.00%
    Earnings Growth (100% ⇒ 30% Growth): 201.07%
    Graham Number ÷ Previous Close: 57.61%

    http://seekingalpha.co... shows how to do an exact 17-point Benjamin Graham assessment for 5000+ NYSE and NASDAQ stocks; with no modifications other than adjustments for inflation.
    Oct 14, 2014. 05:24 PM | Likes Like |Link to Comment
  • For Buy-And-Hold Investors, It's Really Hard To Lose Money In The Stock Market (Part I) [View article]
    Great topic and very nicely covered!

    In a 2012 article, Serenity too had recommended VFINX as one of the investments Benjamin Graham might have recommended:

    Article 1: How To Build A Complete Benjamin Graham Portfolio
    http://seekingalpha.co...
    (see "Strategy 1: Zero Effort - Index Funds")

    Graham often emphasized that most mutual funds did not beat the market average, as measured by the indices. He thus recommended that the first strategy for any investor - one that required nearly no effort - was to proportionally invest in stocks listed in the indices. This is something that can be done a lot more easily today, by simply investing in an index fund.

    Warren Buffett once wrote an article explaining how Benjamin Graham's principles are everlasting, their results irrefutable, and his followers consistently exceptional. It's called "The Superinvestors of Graham-and-Doddsville".

    But most of what Graham actually taught has been forgotten today, and things he warned against are often attributed to him instead.
    Even when Graham's recommended methods are used, they are heavily modified - often beyond recognition - to fit the stocks, rather than having stocks clear them.

    Graham recommended various categories of stocks - Index, Defensive, Enterprising and NCAV. He emphasized that the secret of sound investment was the "Margin of Safety", and specified precise qualitative and quantitative rules for each category.

    He also spent nearly 50 years developing and backtesting the 17 rules in his investment framework; a framework that has been repeatedly endorsed by some of the world's most successful investors.

    Article 2: http://seekingalpha.co... shows how to do an exact 17-point Benjamin Graham assessment for 5000+ NYSE and NASDAQ stocks; with no modifications other than adjustments for inflation.
    Oct 14, 2014. 04:53 PM | 1 Like Like |Link to Comment
  • Benjamin Graham Would Like Qualcomm Inc. Today [View article]
    Warren Buffett once wrote an article explaining how Benjamin Graham's principles are everlasting, their results irrefutable, and his followers consistently exceptional. It's called "The Superinvestors of Graham-and-Doddsville".

    But most of what Graham actually taught has been forgotten today, and things he warned against are often attributed to him instead.
    Even when Graham's recommended methods are used, they are heavily modified - often beyond recognition - to fit the stocks, rather than having stocks clear them.

    For example:
    "Adequate Size of Enterprise - market capitalization of at least $2 billion."

    Graham actually recommended "Not less than $100 million of annual sales" for ensuring adequate size of a company for Defensive investment ($500 million today, when adjusted for inflation). Checking for market capitalization instead of sales will - all other things being equal - rate overvalued stocks higher than undervalued ones.

    Even the other rules mentioned here - such as dividend requirements, and PE & PB ratios - are all very different from what Graham actually recommended.

    Given below are the actual Graham ratings for Qualcomm Inc (QCOM).

    Defensive Graham investment requires all the ratings to be at least 100%.
    Enterprising Graham investment requires the ratings to be at least - CA/2CL : 75%, NCA/LTD : 90%, EPS Stability: 50%, Div Record: 5% and GN/PC: 137%.

    Qualcomm Inc - Defensive Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 4,974.00%
    Current Assets ÷ [2 x Current Liabilities]: 187.56%
    Net Current Assets ÷ Long Term Debt: 100.00%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 55.00%
    Earnings Growth (100% ⇒ 30% Growth): 201.07%
    Graham Number ÷ Previous Close: 57.61%

    The Final Graham Assessment for Qualcomm Inc is also given below.
    The Quantitative Result (Graham Price ÷ Previous Close) for a stock has to be 100% for true Graham investment.

    Qualcomm Inc - Final Graham Assessment
    Defensive Price (Graham Number): $40.73
    Enterprising Price (Serenity Number): $30.21
    NCAV Price: $6.01
    Qualitative Result: Good / Enterprising
    Graham Price: $30.21
    Previous Close: $70.71
    Quantitative Result: 42.72%

    Graham recommended various categories of stocks - Index, Defensive, Enterprising and NCAV. He emphasized that the secret of sound investment was the "Margin of Safety", and specified precise qualitative and quantitative rules for each category.

    He also spent nearly 50 years developing and backtesting the 17 rules in his investment framework; a framework that has been repeatedly endorsed by some of the world's most successful investors.

    http://seekingalpha.co... shows how to do an exact 17-point Benjamin Graham assessment for 5000+ NYSE and NASDAQ stocks; with no modifications other than adjustments for inflation.
    Oct 14, 2014. 04:35 PM | 2 Likes Like |Link to Comment
  • Vanguard Natural Resources: Valuation Targets Price At $20 [View article]
    Hello Bryce_in_TX,

    This article was not published by Serenity Stocks.

    The numbers applied on Serenity Stocks are all the same ones Graham recommends - EPS, BVPS, TVBPS etc.

    Graham spent nearly 50 years developing and backtesting the 17 rules in his investment framework; a framework that has been repeatedly endorsed by some of the world's most successful investors, especially Warren Buffett.

    The article, however, applies only a very small part of his framework and applies that very wrongly.

    VNR may or may not be a good investment. It just doesn't clear Graham's rules.
    Oct 10, 2014. 04:44 PM | 1 Like Like |Link to Comment
  • Splunk: Price Matters [View article]
    Benjamin Graham recommended various categories of stocks - Index, Defensive, Enterprising and NCAV. He emphasized that the secret of sound investment was the "Margin of Safety", and specified precise Qualitative and Quantitative rules for each type of stock in his investment framework.

    For example, given below are the actual Graham ratings for Splunk Inc (SPLK).

    Defensive Graham investment requires all the ratings to be at least 100%.
    Enterprising Graham investment requires the ratings to be at least - CA/2CL : 75%, NCA/LTD : 90%, EPS Stability: 50%, Div Record: 5% and GN/PC: 137%.

    Splunk Inc - Defensive Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 60.52%
    Current Assets ÷ [2 x Current Liabilities]: 238.77%
    Net Current Assets ÷ Long Term Debt: 100.00%
    Earnings Stability (100% ⇒ 10 Years): 0.00%
    Dividend Record (100% ⇒ 20 Years): 0.00%
    Earnings Growth (100% ⇒ 30% Growth): 0.00%
    Graham Number ÷ Previous Close: 0.00%

    Warren Buffett himself once wrote an article explaining how Benjamin Graham's principles are everlasting, their results irrefutable, and his followers consistently exceptional. It's called "The Superinvestors of Graham-and-Doddsville".

    But most of what Graham actually taught has been forgotten today, and things he warned against are often attributed to him instead.

    Even when Graham's recommended methods are used, they are modified - often beyond recognition - to fit the stocks, rather than having stocks clear them.

    Article 1: http://seekingalpha.co... shows how to do an exact 17-point Benjamin Graham assessment for 5000+ NYSE and NASDAQ stocks; with no alterations other than adjustments for inflation.
    Oct 10, 2014. 10:14 AM | 1 Like Like |Link to Comment
  • Vanguard Natural Resources: Valuation Targets Price At $20 [View article]
    Benjamin Graham did recommend NCAV (or Net Current Asset Value) stocks and Vanguard Natural Resources (VNR) does have a negative NCAV.

    But for a stock to be eligible for NCAV investment, it has to be selling BELOW Graham's calculated price (among other things).

    Having a negative NCAV value means that the stock has more liabilities than current assets, i.e. the stock is overvalued.

    But the simplistic NCAV stocks (or Net-Net stocks as they are often referred to) are only the most well-known of Graham's strategies, and the source of the general misconception that Graham only recommended cheap stocks.

    Graham recommended various categories of stocks - Index, Defensive, Enterprising and NCAV. He emphasized that the secret of sound investment was the "Margin of Safety", and specified precise Qualitative and Quantitative rules for each type of stock in his investment framework.

    For example, given below are the actual Graham ratings for Vanguard Natural Resources.

    Defensive Graham investment requires all the ratings to be at least 100%.
    Enterprising Graham investment requires the ratings to be at least - CA/2CL : 75%, NCA/LTD : 90%, EPS Stability: 50%, Div Record: 5% and GN/PC: 137%.

    Sales | Size (100% ⇒ $500 Million): 90.90%
    Current Assets ÷ [2 x Current Liabilities]: 42.34%
    Net Current Assets ÷ Long Term Debt: 0.00%
    Earnings Stability (100% ⇒ 10 Years): 10.00%
    Dividend Record (100% ⇒ 20 Years): 30.00%
    Earnings Growth (100% ⇒ 30% Growth): 0.00%
    Graham Number ÷ Previous Close: 77.46%

    Warren Buffett himself once wrote an article explaining how Benjamin Graham's principles are everlasting, their results irrefutable, and his followers consistently exceptional. It's called "The Superinvestors of Graham-and-Doddsville".

    But most of what Graham actually taught has been forgotten today, and things he warned against are often attributed to him instead.
    Article 1: http://seekingalpha.co... is a great example.

    Even when Graham's recommended methods are used, they are modified - often beyond recognition - to fit the stocks, rather than having stocks clear them.

    Article 2: http://seekingalpha.co... shows how to do an exact 17-point Benjamin Graham assessment for 5000+ NYSE and NASDAQ stocks; with no alterations other than adjustments for inflation.
    Oct 10, 2014. 12:30 AM | Likes Like |Link to Comment
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