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  • The Importance Of How To Invest, Not What To Invest [View article]
    Buffett actually gives very clear actionable advice for ordinary investors.

    Benjamin Graham 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, which Buffett wrote).

    Buffett also writes in the preface:
    "To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What's needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework. This book precisely and clearly prescribes the proper framework. You must supply the emotional discipline."

    Buffett also explains - in the "Legacy of Benjamin Graham" video - how Graham was completely focussed on refining methods that ordinary investors could apply to achieve results similar to his own (Grahams's).

    Graham recommends various categories of stocks in The Intelligent Investor, and specifies precise qualitative and quantitative rules for each category.

    Article 1: High-Quality Value Investing With Benjamin Graham (http://seekingalpha.co...) has more details.

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

    Buffett concluded "The Superinvestors of Graham-and-Doddsville" writing:
    "Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace, and those who read their Graham & Dodd will continue to prosper."

    Article 2: Analysts Continue To Use Wrong Benjamin Graham Formula (http://seekingalpha.co...) shows one example of how well the Flat Earth Society flourishes to this day.

    And those who read their Graham & Dodd, continue to prosper.

    Thank you.
    Mar 13, 2015. 04:36 PM | Likes Like |Link to Comment
  • ModernGraham Quarterly Valuation Of Texas Instruments [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 about this formula and only mentions it briefly to demonstrate why growth-based valuations are unreliable. But due to a printing omission in recent editions of The Intelligent Investor, this formula is sometimes mistakenly used today instead of Graham's actual (and more thorough) methods.

    Article 1: Analysts Continue To Use Wrong Benjamin Graham Formula (http://seekingalpha.co...) discusses the issue in detail.

    In fact, most of what Graham actually taught has been forgotten today, or is applied inaccurately.

    Another example from 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 criterion. Checking for Market Capitalization instead of Sales will - all else being equal - rate overvalued stocks higher than undervalued ones.

    Other rules mentioned here too - such as dividend record, and PE & PB ratios - are very different from what Graham actually recommended.

    Given below are the actual Graham ratings for Texas Instruments Inc (TXN), 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%.

    Texas Instruments Inc - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 2,609.00%
    Current Assets ÷ [2 x Current Liabilities]: 145.91%
    Net Current Assets ÷ Long Term Debt: 140.24%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 100.00%
    Earnings Growth (100% ⇒ 30% Growth): 76.92%
    Graham Number ÷ Previous Close: 37.20%

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

    Texas Instruments Inc - Final Graham Assessment
    Defensive Price (Graham Number): $21.29
    Enterprising Price (Serenity Number): $11.08
    NCAV Price: $0.40
    Qualitative Result: Good / Enterprising
    Intrinsic Value: $11.08
    Previous Close: $57.22
    Quantitative Result: 19.36%

    Please note that not all stocks failing Graham's rules are necessarily bad investments. Graham's rules are just extremely selective. Graham designed and backtested his framework for over 50 years, to deliver the best possible long-term results.

    Even when stocks don't clear them completely, Graham's rules give a clear and quantifiable frame of reference for measuring a stock's margin of safety.

    Benjamin Graham is rightly considered the father of value investing. But the term "Value" is often misunderstood to refer to only quantity, and not quality. Most of Graham's actual stock selection rules were concerned with the qualitative assessment of a stock.

    Article 2: High-Quality Value Investing With Benjamin Graham (http://seekingalpha.co...) has more details.

    Thank you.
    Mar 13, 2015. 04:17 PM | 2 Likes Like |Link to Comment
  • The Millennial Portfolio: Tracking A Virtual Portfolio 'Invested In What We Know' [View article]
    Benjamin Graham 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 lengthy article explaining how Graham's principles are everlasting, and how Graham's record of creating exceptional investors (such as Buffett himself) is unquestionable. The article is called "The Superinvestors of Graham-and-Doddsville".

    Two of Graham's quotes come to mind here:
    1. "While enthusiasm may be necessary for great accomplishments elsewhere, on Wall Street it almost invariably leads to disaster."
    2. "Operations for profit should be based, not on optimism, but on arithmetic."

    An analysis of a stock should therefore include at least cursory look at the company's underlying numbers.

    Buffett describes Graham's book - The Intelligent Investor - as "by far the best book about investing ever written" (in its preface, which Buffett wrote). In The Intelligent Investor, Graham recommended various categories of stocks and specified precise qualitative and quantitative rules for each category.

    For example, given below are the actual Graham ratings for Apple Inc (AAPL), 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%.

    Apple Inc (AAPL) - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 39,960.00%
    Current Assets ÷ [2 x Current Liabilities]: 54.01%
    Net Current Assets ÷ Long Term Debt: 17.54%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 20.00%
    Earnings Growth (100% ⇒ 30% Growth): 1,243.48%
    Graham Number ÷ Previous Close: 41.36%

    Please note that not all stocks failing Graham's rules are necessarily bad investments. Graham's rules are just extremely selective. Graham designed and backtested his framework for over 50 years, to deliver the best possible long-term results.

    Even when stocks don't clear them completely, Graham's rules give a clear and quantifiable frame of reference for measuring a stock's margin of safety.

    Benjamin Graham is rightly considered the father of value investing. But the term "Value" is often misunderstood to refer to only quantity, and not quality. Most of Graham's actual stock selection rules were concerned with the qualitative assessment of a stock.

    Article: High-Quality Value Investing With Benjamin Graham (http://seekingalpha.co...) has more details.

    Thank you.
    Mar 11, 2015. 10:13 AM | 2 Likes Like |Link to Comment
  • Time To Look At Emerging Markets Again [View article]
    Benjamin Graham 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 lengthy article explaining how Graham's principles are everlasting, and how Graham's record of creating exceptional investors (such as Buffett himself) is unquestionable. The article is called "The Superinvestors of Graham-and-Doddsville".

    Buffett describes Graham's book - The Intelligent Investor - as "by far the best book about investing ever written" (in its preface, which Buffett wrote). In The Intelligent Investor, Graham recommended various categories of stocks and specified precise qualitative and quantitative rules for each category.

    Given below are the actual Graham ratings for Itau Unibanco Holding SA (ITUB), 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%.

    Itau Unibanco Holding SA - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 5,281.80%
    Current Assets ÷ [2 x Current Liabilities]: 0.39%
    Net Current Assets ÷ Long Term Debt: 0.00%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 70.00%
    Earnings Growth (100% ⇒ 30% Growth): 111.37%
    Graham Number ÷ Previous Close: 13.59%

    Please note that not all stocks failing Graham's rules are necessarily bad investments. Graham's rules are just extremely selective. Graham designed and backtested his framework for over 50 years, to deliver the best possible long-term results.

    Even when stocks don't clear them completely, Graham's rules give a clear and quantifiable frame of reference for measuring a stock's margin of safety.

    Benjamin Graham is rightly considered the father of value investing. But the term "Value" is often misunderstood to refer to only quantity, and not quality. Most of Graham's actual stock selection rules were concerned with the qualitative assessment of a stock.

    Article: High-Quality Value Investing With Benjamin Graham (http://seekingalpha.co...) has more details.

    Thank you.
    Mar 11, 2015. 09:56 AM | Likes Like |Link to Comment
  • General Motors: What More Do Investors Want? [View article]
    Benjamin Graham 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 lengthy article explaining how Graham's principles are everlasting, and how Graham's record of creating exceptional investors (such as Buffett himself) is unquestionable. The article is called "The Superinvestors of Graham-and-Doddsville".

    Buffett describes Graham's book - The Intelligent Investor - as "by far the best book about investing ever written" (in its preface, which Buffett wrote). In The Intelligent Investor, Graham recommended various categories of stocks and specified precise qualitative and quantitative rules for each category.

    The last of Graham's strategies is "Special Situations". But Graham did not recommend it for the ordinary investor as it supposedly required a high degree of skill, experience and resources.

    Buffett's transactions usually fall in this "Special Situations" category. His holdings are thus not necessarily a good indication of what's good for the rest of us.

    Buffett himself explains - in the "Legacy of Benjamin Graham" video - how Graham was completely focussed on refining methods that ordinary investors could apply to achieve results similar to his own (Grahams's).

    Given below are the actual Graham ratings for General Motors Co (GM), 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%.

    General Motors Co - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 31,180.00%
    Current Assets ÷ [2 x Current Liabilities]: 63.67%
    Net Current Assets ÷ Long Term Debt: 56.41%
    Earnings Stability (100% ⇒ 10 Years): 60.00%
    Dividend Record (100% ⇒ 20 Years): 5.00%
    Earnings Growth (100% ⇒ 30% Growth): 0.00%
    Graham Number ÷ Previous Close: 94.12%

    Please note that not all stocks failing Graham's rules are necessarily bad investments. Graham's rules are just extremely selective. Graham designed and backtested his framework for over 50 years, to deliver the best possible long-term results.

    Even when stocks don't clear them completely, Graham's rules give a clear and quantifiable frame of reference for measuring a stock's margin of safety.

    Benjamin Graham is rightly considered the father of value investing. But the term "Value" is often misunderstood to refer to only quantity, and not quality. Most of Graham's actual stock selection rules were concerned with the qualitative assessment of a stock.

    Article: High-Quality Value Investing With Benjamin Graham (http://seekingalpha.co...) has more details.

    Thank you.
    Mar 10, 2015. 04:30 PM | Likes Like |Link to Comment
  • Valuable Lessons From Warren Buffett's 2014 Letter To Shareholders [View article]
    Sad but true, six!
    In fact, the misuse goes beyond just quotes.

    How many times have we seen someone recommend the "latest Benjamin Graham stocks" with this formula?

    Intrinsic Value = EPS x (8.5 + 2xGrowth)

    Graham actually gave several warnings about this formula and only mentioned it briefly to demonstrate why growth-based valuations are unreliable. But due to a printing omission in recent editions of The Intelligent Investor, this formula is now used more often than Graham's actual (and more thorough) methods.

    Article: Analysts Continue To Use Wrong Benjamin Graham Formula (http://seekingalpha.co...) discusses the issue in detail.
    Mar 10, 2015. 02:00 PM | Likes Like |Link to Comment
  • Valuable Lessons From Warren Buffett's 2014 Letter To Shareholders [View article]
    Warren Buffett once wrote a lengthy article explaining how Benjamin Graham's principles are everlasting, and how Graham's record of creating exceptional investors (such as Buffett himself) is unquestionable. The article is called "The Superinvestors of Graham-and-Doddsville".

    On the subject of being one's own worst enemy, Graham wrote:

    "We shall say quite a bit about the psychology of investors. For indeed, the investor’s chief problem—and even his worst enemy—is likely to be himself."
    Introduction, The Intelligent Investor

    "We have seen much more money made and kept by “ordinary people” who were temperamentally well suited for the investment process than by those who lacked this quality, even though they had an extensive knowledge of finance, accounting, and stock-market lore."
    Introduction, The Intelligent Investor

    There's good reason why Buffett calls The Intelligent Investor "by far the best book about investing ever written". Graham doesn't miss anything.

    In The Intelligent Investor, Graham recommended various categories of stocks and specified precise qualitative and quantitative rules for each category.

    Benjamin Graham is rightly considered the father of value investing. But the term "Value" is often misunderstood to refer to only quantity, and not quality. Most of Graham's actual stock selection rules were concerned with the qualitative assessment of a stock.

    Article: High-Quality Value Investing With Benjamin Graham (http://seekingalpha.co...) has more details.

    Thank you.
    Mar 8, 2015. 05:51 PM | Likes Like |Link to Comment
  • ModernGraham Quarterly Valuation Of V.F. Corporation [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 about this formula and only mentions it briefly to demonstrate why growth-based valuations are unreliable. But due to a printing omission in recent editions of The Intelligent Investor, this formula is sometimes mistakenly used today instead of Graham's actual (and more thorough) methods.

    Article 1: Analysts Continue To Use Wrong Benjamin Graham Formula (http://seekingalpha.co...) discusses the issue in detail.

    In fact, most of what Graham actually taught has been forgotten today, or is applied inaccurately.

    Another example from 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 criterion. Checking for Market Capitalization instead of Sales will - all else being equal - rate overvalued stocks higher than undervalued ones.

    Other rules mentioned here too - such as dividend record, and PE & PB ratios - are very different from what Graham actually recommended.

    Given below are the actual Graham ratings for VF Corp (VFC), 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%.

    VF Corp - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 2,456.40%
    Current Assets ÷ [2 x Current Liabilities]: 123.82%
    Net Current Assets ÷ Long Term Debt: 162.23%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 95.00%
    Earnings Growth (100% ⇒ 30% Growth): 162.82%
    Graham Number ÷ Previous Close: 36.80%

    The Final Graham Assessment for VF Corp is also given below.
    The Quantitative Result (Intrinsic Value ÷ Previous Close) for a stock has to be 100% for true Graham investment.

    VF Corp - Final Graham Assessment
    Defensive Price (Graham Number): $27.41
    Enterprising Price (Serenity Number): $8.56
    NCAV Price: $-0.79
    Qualitative Result: Good / Enterprising
    Intrinsic Value: $8.56
    Previous Close: $74.49
    Quantitative Result: 11.49%

    Please note that not all stocks failing Graham's rules are necessarily bad investments. Graham's rules are just extremely selective. Graham designed and backtested his framework for over 50 years, to deliver the best possible long-term results.

    Even when stocks don't clear them completely, Graham's rules give a clear and quantifiable frame of reference for measuring a stock's margin of safety.

    Benjamin Graham is rightly considered the father of value investing. But the term "Value" is often misunderstood to refer to only quantity, and not quality. Most of Graham's actual stock selection rules were concerned with the qualitative assessment of a stock.

    Article 2: High-Quality Value Investing With Benjamin Graham (http://seekingalpha.co...) has more details.

    Thank you.
    Mar 8, 2015. 04:26 PM | Likes Like |Link to Comment
  • ModernGraham Quarterly Valuation Of Wynn Resorts Limited [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 about this formula and only mentions it briefly to demonstrate why growth-based valuations are unreliable. But due to a printing omission in recent editions of The Intelligent Investor, this formula is sometimes mistakenly used today instead of Graham's actual (and more thorough) methods.

    Article 1: Analysts Continue To Use Wrong Benjamin Graham Formula (http://seekingalpha.co...) discusses the issue in detail.

    In fact, most of what Graham actually taught has been forgotten today, or is applied inaccurately.

    Another example from 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 criterion. Checking for Market Capitalization instead of Sales will - all else being equal - rate overvalued stocks higher than undervalued ones.

    Other rules mentioned here too - such as dividend record, and PE & PB ratios - are very different from what Graham actually recommended.

    Given below are the actual Graham ratings for Wynn Resorts Ltd (WYNN), 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%.

    Wynn Resorts Ltd - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 1,086.80%
    Current Assets ÷ [2 x Current Liabilities]: 0.00%
    Net Current Assets ÷ Long Term Debt: 0.00%
    Earnings Stability (100% ⇒ 10 Years): 90.00%
    Dividend Record (100% ⇒ 20 Years): 35.00%
    Earnings Growth (100% ⇒ 30% Growth): 113.91%
    Graham Number ÷ Previous Close: 0.00%

    Please note that not all stocks failing Graham's rules are necessarily bad investments. Graham's rules are just extremely selective. Graham designed and backtested his framework for over 50 years, to deliver the best possible long-term results.

    Even when stocks don't clear them completely, Graham's rules give a clear and quantifiable frame of reference for measuring a stock's margin of safety.

    Benjamin Graham is rightly considered the father of value investing. But the term "Value" is often misunderstood to refer to only quantity, and not quality. Most of Graham's actual stock selection rules were concerned with the qualitative assessment of a stock.

    Article 2: High-Quality Value Investing With Benjamin Graham (http://seekingalpha.co...) has more details.

    Thank you.
    Mar 8, 2015. 04:22 PM | 2 Likes Like |Link to Comment
  • ModernGraham Annual Valuation Of Coca-Cola [View article]
    Thank you, jimklawyer!
    Mar 5, 2015. 02:28 PM | Likes Like |Link to Comment
  • ModernGraham Annual Valuation Of Coca-Cola [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 about this formula and only mentions it briefly to demonstrate why growth-based valuations are unreliable. But due to a printing omission in recent editions of The Intelligent Investor, this formula is sometimes mistakenly used today instead of Graham's actual (and more thorough) methods.

    Article 1: Analysts Continue To Use Wrong Benjamin Graham Formula (http://seekingalpha.co...) discusses the issue in detail.

    In fact, most of what Graham actually taught has been forgotten today, or is applied inaccurately.

    Another example from 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 criterion. Checking for Market Capitalization instead of Sales will - all else being equal - rate overvalued stocks higher than undervalued ones.

    Other rules mentioned here too - such as dividend record, and PE & PB ratios - are very different from what Graham actually recommended.

    Given below are the actual Graham ratings for Coca-Cola Co (KO), 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%.

    Coca-Cola Co - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 9,199.60%
    Current Assets ÷ [2 x Current Liabilities]: 50.95%
    Net Current Assets ÷ Long Term Debt: 3.21%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 95.00%
    Earnings Growth (100% ⇒ 30% Growth): 125.79%
    Graham Number ÷ Previous Close: 39.97%

    Please note that not all stocks failing Graham's rules are necessarily bad investments. Graham's rules are just extremely selective. Graham designed and backtested his framework for over 50 years, to deliver the best possible long-term results.

    Even when stocks don't clear them completely, Graham's rules give a clear and quantifiable frame of reference for measuring a stock's margin of safety.

    Benjamin Graham is rightly considered the father of value investing. But the term "Value" is often misunderstood to refer to only quantity, and not quality. Most of Graham's actual stock selection rules were concerned with the qualitative assessment of a stock.

    Article 2: High-Quality Value Investing With Benjamin Graham (http://seekingalpha.co...) has more details.

    Thank you.
    Mar 5, 2015. 07:13 AM | 3 Likes Like |Link to Comment
  • Why Unilever Can Still Be Put In Every Retirement Portfolio, Close To Double-Digit Returns Ahead [View article]
    From Chapter 14 of The Intelligent Investor - Stock Selection for the Defensive Investor:
    "6. Current price should not be more than 15 times average earnings.
    7. Current price should not be more than 1-1⁄2 times the book value.
    As a rule of thumb, we suggest that the product of the multiplier times the ratio of price to book value should not exceed 22.5."

    The maximum Graham price for Defensive quality stocks is derived from the above as:
    The square root of [22.5 x EPS x BVPS]

    This price is known as the Graham Number today.
    Graham was OK with a PE of above 15, if the stock had enough assets to compensate.

    But before being checked against the Graham Number, Benjamin Graham required that a stock first meet six other qualitative criteria (#2 has two sub criteria).

    For example, given below are all Graham ratings for Unilever (UL).

    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%.

    Unilever - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 11,045.80%
    Current Assets ÷ [2 x Current Liabilities]: 31.43%
    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): 89.68%
    Graham Number ÷ Previous Close: 38.92%

    Please note that not all stocks failing Graham's rules are necessarily bad investments. Graham's rules are just extremely selective. Graham designed and backtested his framework for over 50 years, to deliver the best possible long-term results.

    Even when stocks don't clear them completely, Graham's rules give a clear and quantifiable frame of reference for measuring a stock's margin of safety.

    Benjamin Graham is rightly considered the father of value investing. But the term "Value" is often misunderstood to refer to only quantity, and not quality. Most of Graham's actual stock selection rules were concerned with the qualitative assessment of a stock.

    High-Quality Value Investing With Benjamin Graham (http://seekingalpha.co...) has more details.

    Thank you.
    Mar 5, 2015. 07:06 AM | Likes Like |Link to Comment
  • Raytheon Company Dividend Stock Analysis [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 all Graham ratings for Raytheon Co (RTN).

    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%.

    Raytheon Co - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 4,565.20%
    Current Assets ÷ [2 x Current Liabilities]: 86.78%
    Net Current Assets ÷ Long Term Debt: 81.84%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 70.00%
    Earnings Growth (100% ⇒ 30% Growth): 135.54%
    Graham Number ÷ Previous Close: 62.19%

    Please note that not all stocks failing Graham's rules are necessarily bad investments. Graham's rules are just extremely selective. Graham designed and backtested his framework for over 50 years, to deliver the best possible long-term results.

    Even when stocks don't clear them completely, Graham's rules give a clear and quantifiable frame of reference for measuring a stock's margin of safety.

    Benjamin Graham is rightly considered the father of value investing. But the term "Value" is often misunderstood to refer to only quantity, and not quality. Most of Graham's actual stock selection rules were concerned with the qualitative assessment of a stock.

    High-Quality Value Investing With Benjamin Graham (http://seekingalpha.co...) has more details.

    Thank you.
    Mar 5, 2015. 06:58 AM | Likes Like |Link to Comment
  • 3 Unloved High Growth Plays To Add To Your Watchlist [View article]
    We often forget that the purpose of an investment framework is to deliver the best results, and not to deliver the largest list of stocks.

    Graham's framework does clear very few stocks, and that's exactly what it's designed to do - be highly selective and deliver the best results.

    Most 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 cheap stocks.

    The Graham Number has "six" explicit supporting qualitative criteria which are almost always completely ignored today.

    http://seekingalpha.co... discusses some of these common misconceptions about Value Investing and Graham.
    Mar 3, 2015. 03:18 PM | Likes Like |Link to Comment
  • Did Warren Buffett Move The Goalposts In The Latest Letter? [View article]
    As others have pointed out above, additional information is not a bad thing and not the same as moving the goalposts.

    In any case, this preoccupation over Book Value and Assets in Value Investing is actually quite unwarranted.

    Benjamin Graham was a scholar and financial analyst who mentored legendary investors such as Warren Buffett, William J. Ruane, Irving Kahn and Walter J. Schloss.

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

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

    Graham is rightly considered the father of value investing. But the term "Value" is often misunderstood to refer to only quantity (Assets/Earnings), and not quality. Most of Graham's stock selection rules were actually concerned with the qualitative assessment of a stock.

    http://seekingalpha.co... discusses some of these common misconceptions about Value Investing as taught by Graham, and practiced by Buffett.
    Mar 2, 2015. 04:10 PM | Likes Like |Link to Comment
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