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  • This Benjamin Graham Rule Encourages More Disciplined Investing [View article]
    Hi,

    Could you please give the source for this rule?

    In the Intelligent Investor, Graham recommends 3 different grades of stocks for investment, and 16 different criteria for finding them; including different PE criteria for different grades.

    Given below is the link to detailed article on seekingalpha

    "How To Build A Complete Benjamin Graham Portfolio"
    http://seekingalpha.co...

    --
    Serenity
    Dec 31, 2012. 10:12 AM | 2 Likes Like |Link to Comment
  • 10 Non Financial Stocks Trading Below Their Graham Number [View article]
    Serenity's Graham Number screener lists nearly a 1000 NYSE and NASDAQ stocks selling under their Graham Number.
    Link: http://bit.ly/RryASs

    But to use the Graham Number, a stock must first have uninterrupted earnings for the last 10 years, uninterrupted dividends for the last 20 years, and meet 4 other Defensive criteria.

    Cliffs Natural Resources Inc fails all Defensive criteria other than Sales and Earnings growth.
    Xerox Corp fails the liabilities, debt and dividend criteria.
    Hess Corp fails the liabilities, debt and earnings stability.
    And so on...

    Serenity gives a detailed Defensive breakup, as well as a complete Graham analysis, for all 4000 NYSE and NASDAQ stocks.

    --
    Serenity Stocks
    Dec 31, 2012. 09:54 AM | 2 Likes Like |Link to Comment
  • How To Build A Complete Benjamin Graham Portfolio [View article]
    A lot of people are probably already doing so, freeman8201.
    Maybe that's exactly why it meets Graham's criteria.

    Again, the reason Graham - and his followers like Buffett - do better than others is that they follow strategies that others don't.
    They would buy stocks like DMND when others would be afraid to.

    As Buffett said:
    "Be fearful when others are greedy, and be greedy when others are fearful"

    --
    Serenity Stocks
    Nov 30, 2012. 02:36 AM | 2 Likes Like |Link to Comment
  • A Complete Benjamin Graham Analysis For LinkedIn [View article]
    There is a popular joke that goes:

    A businessman interviewing job applications for the position of manager asked each applicant only one question, "What is two plus two?"
    The first interviewee was a journalist. His answer was, "Twenty-two".
    The second was a social worker. She said, "I don't know the answer but I'm very glad that we had the opportunity to discuss it."
    The third applicant was an engineer. He pulled out a slide rule and came up with an answer "somewhere between 3.999 and 4.001."
    Next came an attorney. He stated that "in the case of Jenkins vs. the Department of the Treasury, two plus two was proven to be four."
    Finally, the businessman interviewed an accountant. The accountant went over to the door, closed it and said in a low voice, "How much do you want it to be?"

    The point being, The Market Flash, is that there is a reason GAAP exists.
    If one were to do accounting according to one's own rules, almost any number can be shown for any metric. The only constraint would be how much sounds believable.

    Quoting here from investopedia:
    Link: http://bit.ly/XkmvRP

    "It is important as a savvy investor to ensure that the information you are using for comparison follows the GAAP rules and is not the (often more publicized) non-GAAP earnings number."
    Nov 17, 2012. 04:11 AM | 2 Likes Like |Link to Comment
  • A Unique List Of Fully Defensive Graham Stocks [View article]
    Thank you Vorgriff!

    If you need more stocks , please use Graham's Enterprising and NCAV grade stocks instead of partially Defensive stocks.
    Link: http://bit.ly/QYCMaj

    A stock should completely meet one of the sets of Graham's criteria to be eligible for investment.
    Oct 14, 2012. 12:33 AM | 2 Likes Like |Link to Comment
  • Ben Graham's Stock Valuing Formula: It Really Works [View article]
    In his book, Graham uses this formula to replicate other forecasting methods, while retrospectively showing how stocks never behave according to any such forecasts.
    In fact, he gives multiple warnings to never use any such formula.

    So if it's working for you, that's actually surprising.
    Sep 6, 2012. 09:48 AM | 2 Likes Like |Link to Comment
  • Ben Graham's Stock Valuing Formula: It Really Works [View article]
    Graham never intended this growth formula to actually be used to evaluate stocks. This is a very common but dangerous misconception.
    Sep 6, 2012. 03:00 AM | 2 Likes Like |Link to Comment
  • How Graham, Lynch, And Other Gurus' Strategies Have Quadrupled The Market Since '03 [View article]
    Can you share some more details on how you were implementing these strategies?
    Especially Graham?
    Aug 9, 2012. 09:40 AM | 2 Likes Like |Link to Comment
  • ModernGraham Quarterly Valuation Of Automatic Data Processing [View article]
    Hello DeJagen,

    ADP does not clear any one set of Graham's investment criteria completely; i.e., it's overvalued.

    The Final Graham Assessment for Automatic Data Processing (ADP) is given below.
    Defensive Price (Graham Number): $29.31
    Enterprising Price (Serenity Number): $13.64
    NCAV Price: $0.25
    Qualitative Result: Bargain / NCAV
    Intrinsic Value: $0.25
    Previous Close: $84.71
    Quantitative Result: 0.30%

    The Intrinsic Value for a Defensive quality stock equals its Defensive Price (Graham Number), the Intrinsic Value of an Enterprising quality stock equals its Enterprising Price and the Intrinsic Value for an NCAV quality stock equals its NCAV Price.

    According to Graham, a stock is undervalued below its Intrinsic Value and overvalued above its Intrinsic Value.

    But please note that this does not imply that all stocks not clearing Graham's rules are bad investments. Graham's rules are just extremely selective. It's more a question of how to get the "best" long-term results.

    Thank you.
    Dec 22, 2014. 04:09 PM | 1 Like Like |Link to Comment
  • ModernGraham Quarterly Valuation Of Automatic Data Processing [View article]
    The ModernGraham website lists the following formula as one of the evaluation methods it uses:

    Intrinsic Value = EPS x (8.5 + 2xGrowth)

    Benjamin Graham actually gave several warnings about this formula and only used it to demonstrate why oversimplified growth estimates are unreliable. But due to a printing omission in recent editions of The Intelligent Investor, this formula is used often today instead of Graham's actual (and more thorough) methods.

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

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

    Another example, again 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 other things being equal - rate overvalued stocks higher than undervalued ones. Other rules mentioned here too - such as dividend record, and PE & PB ratios - are all very different from what Graham actually recommended.

    Graham spent nearly 50 years developing, backtesting and refining an investment framework that has withstood the test of time, and has been endorsed by some of the world's most successful investors. Modifying Graham's rules so heavily seems very ill-advised.

    Given below are the actual Graham ratings for Automatic Data Processing (ADP), with no adjustments other than those for inflation.

    Defensive Graham investment requires all the ratings to be at least 100%.
    Enterprising Graham investment requires the ratings to be at least - N/A, 75%, 90%, 50%, 5%, N/A and 137%.

    Automatic Data Processing - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 2,262.00%
    Current Assets ÷ [2 x Current Liabilities]: 52.97%
    Net Current Assets ÷ Long Term Debt: 9,987.76%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 100.00%
    Earnings Growth (100% ⇒ 30% Growth): 123.37%
    Graham Number ÷ Previous Close: 34.60%

    Article 2: http://seekingalpha.co... shows how one can assess 5000+ NYSE and NASDAQ stocks by a similar exact Benjamin Graham assessment, with no adjustments other than those for inflation.
    Dec 21, 2014. 01:01 PM | 1 Like Like |Link to Comment
  • Investing For Beginners With Benjamin Graham [View article]
    Hello MacKay Dave,

    Thank you for asking!

    You will probably notice such a trend in a lot of stocks that clear Graham's criteria.

    Graham's principles directly contradict most of the common practices in Technical Analysis. The fact that the stock has been on a downtrend is probably a good indication that you're applying Graham correctly.

    Given below is a relevant excerpt from the Introduction to The Intelligent Investor:

    "Since our book is not addressed to speculators, it is not meant for those who trade in the market. Most of these people are guided by charts or other largely mechanical means of determining the right moments to buy and sell. The one principle that applies to nearly all these so-called “technical approaches” is that one should buy because a stock or the market has gone up and one should sell because it has declined. This is the exact opposite of sound business sense everywhere else, and it is most unlikely that it can lead to lasting success on Wall Street. In our own stock-market experience and observation, extending over 50 years, we have not known a single person who has consistently or lastingly made money by thus “following the market.” We do not hesitate to declare that this approach is as fallacious as it is popular. "

    Graham's recommendation is, essentially, to ignore such trends.
    Nov 27, 2014. 08:00 AM | 1 Like Like |Link to Comment
  • Fluor: Industrial Construction Company Getting Rave Reviews [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.

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

    For example, given below are the actual Graham ratings for Fluor Corporation (FLR).

    Defensive Graham investment requires all the ratings to be at least 100%.
    Enterprising Graham investment requires the ratings to be at least - N/A, 75%, 90%, 50%, 5%, N/A and 137%.

    Fluor Corporation - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 5,470.00%
    Current Assets ÷ [2 x Current Liabilities]: 88.10%
    Net Current Assets ÷ Long Term Debt: 522.86%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 65.00%
    Earnings Growth (100% ⇒ 30% Growth): 197.61%
    Graham Number ÷ Previous Close: 60.42%

    Fluor Corporation ranks well by Graham's qualitative rules, but exceeds Graham's quantitative limits.

    Warren Buffett once wrote an article describing how Benjamin Graham's long record of tutoring exceptional investors (such as Buffett himself) is irrefutable. The article is called "The Superinvestors of Graham-and-Doddsville".

    http://seekingalpha.co... shows how anyone can screen 5000+ NYSE and NASDAQ stocks today, by an exact 17-point Benjamin Graham assessment.
    Nov 24, 2014. 03:26 PM | 1 Like Like |Link to Comment
  • Dividend Aristocrats In Focus Part 41: Abbott Laboratories [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.

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

    For example, given below are the actual Graham ratings for Abbott Laboratories (ABT).

    Defensive Graham investment requires all the ratings to be at least 100%.
    Enterprising Graham investment requires the ratings to be at least - N/A, 75%, 90%, 50%, 5%, N/A and 137%.

    Abbott Laboratories - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 4,370.00%
    Current Assets ÷ [2 x Current Liabilities]: 101.23%
    Net Current Assets ÷ Long Term Debt: 287.49%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 100.00%
    Earnings Growth (100% ⇒ 30% Growth): 120.46%
    Graham Number ÷ Previous Close: 71.06%

    Abbott Laboratories ranks very highly by Graham's qualitative rules, but exceeds Graham's quantitative limits.

    Warren Buffett once wrote an article describing how Benjamin Graham's long record of tutoring exceptional investors (such as Buffett himself) is irrefutable. The article is called "The Superinvestors of Graham-and-Doddsville".

    http://seekingalpha.co... shows how one can screen 5000+ NYSE and NASDAQ stocks today by an exact 17-point Benjamin Graham assessment.
    Nov 24, 2014. 03:16 PM | 1 Like Like |Link to Comment
  • ModernGraham Annual Valuation Of American Electric Power Company Inc. [View article]
    The ModernGraham website lists the following formula as one of the evaluation methods it uses:
    Intrinsic Value = EPS x (8.5 + 2xGrowth)

    Benjamin Graham actually gave the following warnings about 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".

    Graham only used this formula to demonstrate why oversimplified growth estimates are unreliable. But due to a printing omission in recent editions of The Intelligent Investor, this formula is often used today instead of Graham's actual (and more thorough) methods.

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

    Warren Buffett once wrote an article describing how Benjamin Graham's principles are everlasting, and his students consistently exceptional. The article is 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 this criterion. Checking for market capitalization instead will - all other things being equal - rate overvalued stocks higher than undervalued ones.

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

    Given below are the actual Graham ratings for American Electric Power (AEP).

    Defensive Graham investment requires all the ratings to be at least 100%.
    Enterprising Graham investment requires the ratings to be at least - N/A, 75%, 90%, 50%, 5%, N/A and 137%.

    American Electric Power - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 3,072.00%
    Current Assets ÷ [2 x Current Liabilities]: 35.26%
    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): 96.97%
    Graham Number ÷ Previous Close: 88.02%

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

    Article 2: http://seekingalpha.co... shows how anyone can do a true 17-point Benjamin Graham assessment for 5000+ NYSE and NASDAQ stocks; with no adjustments other than those for inflation.
    Nov 21, 2014. 03:30 PM | 1 Like Like |Link to Comment
  • Universal Corporation Is Set To Outperform [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.

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

    For example, given below are all Graham ratings for Universal Corporation (UVV).

    Defensive Graham investment requires all the ratings to be at least 100%.
    Enterprising Graham investment requires the ratings to be at least - N/A, 75%, 90%, 50%, 5%, N/A and 137%.

    Universal Corporation - Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 508.00%
    Current Assets ÷ [2 x Current Liabilities]: 183.87%
    Net Current Assets ÷ Long Term Debt: 507.58%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 100.00%
    Earnings Growth (100% ⇒ 30% Growth): 142.00%
    Graham Number ÷ Previous Close: 175.23%

    Warren Buffett once wrote an article describing how Graham's principles are everlasting, and his students consistently exceptional. The article is called "The Superinvestors of Graham-and-Doddsville".

    http://seekingalpha.co... shows how anyone can do a true 17-point Benjamin Graham assessment for 5000+ NYSE and NASDAQ stocks; with no adjustments other than those for inflation.

    In short, of 5000+ stocks analyzed using Graham's 17 rules today, Universal Corporation is one of the highest rated. Possibly, "the" highest.

    Thank you.
    Nov 21, 2014. 01:09 PM | 1 Like Like |Link to Comment
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