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  • Teradata Corporation Is A Great Company At A Fair Price [View article]
    Hello DRIPN',

    The Graham Ratings in the previous comment did not clear Teradata Corp for investment.
    Aug 7, 2015. 10:07 AM | Likes Like |Link to Comment
  • Like Exxon, Top Canadian Oil Sands Companies Offer Tremendous Value [View article]
    Benjamin Graham was a scholar and professional investor who mentored investing legends such as Warren Buffett, William J. Ruane, Irving Kahn and Walter J. Schloss.

    Warren Buffett wrote the preface to Graham's book - The Intelligent Investor - in which he calls it "by far the best book about investing ever written."

    Graham's first recommended strategy - for novice 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 professional investors, Graham described various special situations or "workouts".

    For example, given below are the Graham ratings for Suncor Energy Inc (SU), with no adjustments other than those for inflation.

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

    Suncor Energy Inc (SU) - Defensive Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 5,974.00%
    Current Assets ÷ [2 x Current Liabilities]: 83.29%
    Net Current Assets ÷ Long Term Debt: 44.53%
    Equity ÷ Debt (for Utilities and Financials): 109.28%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 100.00%
    Earnings Growth (100% ⇒ 30% Growth): 63.09%
    Graham Number ÷ Previous Close: 118.13%

    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.

    Most of Buffett's investments are what Graham defined as Special Situations.
    Aug 5, 2015. 07:09 PM | Likes Like |Link to Comment
  • Autohome: Garage Sale [View article]
    Benjamin Graham was a scholar and professional investor who mentored investing legends such as Warren Buffett, William J. Ruane, Irving Kahn and Walter J. Schloss.

    Warren Buffett once gave a speech at Columbia Business School describing 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".

    Graham's first recommended strategy - for novice 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 professional investors, Graham described various special situations or "workouts".

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

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

    Autohome Inc (ATHM) - Defensive Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 68.82%
    Current Assets ÷ [2 x Current Liabilities]: 168.47%
    Net Current Assets ÷ Long Term Debt: 100.00%
    Equity ÷ Debt (for Utilities and Financials): 227.16%
    Earnings Stability (100% ⇒ 10 Years): 40.00%
    Dividend Record (100% ⇒ 20 Years): 0.00%
    Earnings Growth (100% ⇒ 30% Growth): 0.00%
    Graham Number ÷ Previous Close: 24.54%

    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.

    Most of Buffett's investments are what Graham defined as Special Situations.
    Jul 31, 2015. 04:27 PM | Likes Like |Link to Comment
  • Express Scripts Is Fairly Valued But Speculative [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 used it to demonstrate that the market's growth rate expectations were never reliable. But due to an omission in recent editions of The Intelligent Investor, this formula is often mistakenly used today to value stocks instead of Graham's actual (and more thorough) methods.

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

    Graham's first recommended strategy - for novice 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 professional investors, Graham described various special situations or "workouts".

    For example, given below are the actual Graham ratings for Express Scripts Holding Co (ESRX), with no adjustments other than those for inflation.

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

    Express Scripts Holding Co (ESRX) - Defensive Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 20,178.00%
    Current Assets ÷ [2 x Current Liabilities]: 31.05%
    Net Current Assets ÷ Long Term Debt: 0.00%
    Equity ÷ Debt (for Utilities and Financials): 59.43%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 0.00%
    Earnings Growth (100% ⇒ 30% Growth): 198.47%
    Graham Number ÷ Previous Close: 41.46%

    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.
    Jul 31, 2015. 04:22 PM | 1 Like Like |Link to Comment
  • 'Buffett's Alpha': Lessons In Crafting Your Portfolio Strategy [View article]
    The "strategy" Buffett uses is actually an elaborate investment framework devised by Benjamin Graham.

    Warren Buffett wrote the preface to Graham's book - The Intelligent Investor - in which he calls it "by far the best book about investing ever written."

    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."

    Graham's first recommended strategy - for novice 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 professional investors, Graham described various special situations or "workouts".

    For example, given below are the Graham ratings for Cisco Systems Inc (CSCO), with no adjustments other than those for inflation.

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

    Cisco Systems Inc (CSCO) - Defensive Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 9,616.00%
    Current Assets ÷ [2 x Current Liabilities]: 169.40%
    Net Current Assets ÷ Long Term Debt: 231.88%
    Equity ÷ Debt (for Utilities and Financials): 116.86%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 25.00%
    Earnings Growth (100% ⇒ 30% Growth): 124.87%
    Graham Number ÷ Previous Close: 71.34%

    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.

    Most of Buffett's investments are what Graham defined as Special Situations.
    Jul 29, 2015. 02:31 PM | 2 Likes Like |Link to Comment
  • 5 Speculative And Overvalued Companies To Avoid - July 2015 [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 used it to demonstrate that the market's growth rate expectations were never reliable. But due to an omission in recent editions of The Intelligent Investor, this formula is often mistakenly used today to value stocks instead of Graham's actual (and more thorough) methods.

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

    Graham's first recommended strategy - for novice 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 professional investors, Graham described various special situations or "workouts".

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

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

    Waste Management Inc (WM) - Defensive Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 2,800.00%
    Current Assets ÷ [2 x Current Liabilities]: 52.24%
    Net Current Assets ÷ Long Term Debt: 1.87%
    Equity ÷ Debt (for Utilities and Financials): 37.73%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 90.00%
    Earnings Growth (100% ⇒ 30% Growth): 56.54%
    Graham Number ÷ Previous Close: 43.81%

    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.
    Jul 27, 2015. 05:40 PM | 1 Like Like |Link to Comment
  • How Many Stocks Should Be In My Portfolio? [View article]
    Thank you for your comment, vinyl1.

    Buffett does have advantages specific to institutional investors - controlling interests, preferential treatment, fewer protective regulations, lower commissions etc.

    But in his speech "The Superinvestors of Graham-and-Doddsville", Buffett also explains how size is an anchor on performance. The closer one's portfolio comes in size to the market itself, the harder it becomes to beat the market average (by definition).

    So Buffett may do bigger numbers but the rest of us can actually do better percentages.

    Article: Is Warren Buffett A Value Investor? (http://seekingalpha.co...) discusses the topic in more detail.
    Jul 26, 2015. 11:02 AM | Likes Like |Link to Comment
  • Why Warren Buffett Bought Suncor [View article]
    Absolutely, Michael Munro!

    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."
    Jul 26, 2015. 10:52 AM | 1 Like Like |Link to Comment
  • Why Warren Buffett Bought Suncor [View article]
    Benjamin Graham - once known as The Dean of Wall Street - 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 wrote the preface for Graham's book - The Intelligent Investor - in which he calls it "by far the best book about investing ever written."

    Graham's first recommended strategy - for novice 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 professional investors, Graham described various special situations or "workouts".

    For example, given below are the Graham ratings for Suncor Energy Inc (SU), with no adjustments other than those for inflation.

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

    Suncor Energy Inc (SU) - Defensive Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 5,974.00%
    Current Assets ÷ [2 x Current Liabilities]: 83.29%
    Net Current Assets ÷ Long Term Debt: 44.53%
    Equity ÷ Debt (for Utilities and Financials): 109.28%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 100.00%
    Earnings Growth (100% ⇒ 30% Growth): 63.09%
    Graham Number ÷ Previous Close: 130.43%

    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.

    Most of Buffett's investments are what Graham defined as Special Situations.
    Jul 25, 2015. 10:09 AM | 3 Likes Like |Link to Comment
  • MetLife Inc. Is Significantly Undervalued [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 used it to demonstrate that the market's growth rate expectations were never reliable. But due to an omission in recent editions of The Intelligent Investor, this formula is often mistakenly used today to value stocks instead of Graham's actual (and more thorough) methods.

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

    Graham's first recommended strategy - for novice 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 professional investors, Graham described various special situations or "workouts".

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

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

    MetLife, Inc. (MET) - Defensive Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 14,658.00%
    Current Assets ÷ [2 x Current Liabilities]: 0.00%
    Net Current Assets ÷ Long Term Debt: 0.00%
    Equity ÷ Debt (for Utilities and Financials): 8.68%
    Earnings Stability (100% ⇒ 10 Years): 50.00%
    Dividend Record (100% ⇒ 20 Years): 80.00%
    Earnings Growth (100% ⇒ 30% Growth): 36.84%
    Graham Number ÷ Previous Close: 118.92%

    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.
    Jul 24, 2015. 12:06 PM | 2 Likes Like |Link to Comment
  • Wide Moat Investing: Is This ETF Delivering On Its Promise? [View article]
    Thank you, Ibex Investor!
    Jul 24, 2015. 11:52 AM | 1 Like Like |Link to Comment
  • How Many Stocks Should Be In My Portfolio? [View article]
    Hamdy Sadek is correct, Correctamundo.

    The Net Current Asset Value (or NCAV/Net-Net) valuation method was indeed developed and recommended by Benjamin Graham. But Graham also recommended in The Intelligent Investor that an NCAV stock 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.

    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.

    It's a capital mistake to invest based on quantitative valuations alone, often leading to what are referred to as a value traps. But such problems are not the result of following Graham, but rather the result of following Graham incompletely.
    Jul 23, 2015. 09:57 AM | 2 Likes Like |Link to Comment
  • Investing For Beginners With Benjamin Graham [View article]
    Thank you, IAS research!
    Jul 23, 2015. 09:00 AM | Likes Like |Link to Comment
  • How Many Stocks Should Be In My Portfolio? [View article]
    Warren Buffett once said:
    "Wide diversification is only required when investors do not understand what they are doing."

    That one line explains the principle of diversification perfectly.

    Concentration improves performance but is best employed by those with exceptional skill and experience.
    Diversification protects the average investor from excessive losses.

    Buffett further elaborated:
    "diversification is protection against ignorance. It makes little sense if you know what you are doing."

    Benjamin Graham - also known as The Dean of Wall Street - 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 wrote the preface for Graham's book - The Intelligent Investor - in which he calls it "by far the best book about investing ever written."

    Graham's first recommended strategy - for novice 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 professional investors, Graham described various special situations or "workouts".

    Graham recommended a minimum portfolio size of 10 for Defensive quality stocks; or in other words, not more than 10% of one's portfolio per Defensive quality stock.

    Since NCAV stocks undergo the least qualitative tests of all of Graham's categories, they also require the most diversification. Graham recommended a portfolio size of 30 for NCAV stocks; or in other words, not more than 3.3% of one's portfolio per NCAV stock.

    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".
    Jul 23, 2015. 07:20 AM | 2 Likes Like |Link to Comment
  • Benjamin Graham's Defensive Versus Enterprising Investor Performance Over The Dismal Decade Of 2000-2009 [View article]
    Of course!

    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.

    Buffett's concluded the speech, saying:
    "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."

    But modifications in newer editions of The Intelligent Investor have caused severe misunderstandings.

    For example:
    Intrinsic Value = EPS x (8.5 + 2xGrowth)

    Benjamin Graham actually gave several warnings with this formula and only used it to demonstrate that the market's growth rate expectations were never reliable. But due to an omission in recent editions of The Intelligent Investor, this formula is often mistakenly used today to value stocks instead of Graham's actual (and more thorough) methods.

    The article mentioned in the previous comment discusses the issue in detail.
    Jul 23, 2015. 07:07 AM | Likes Like |Link to Comment
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