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  • How To Build A Complete Benjamin Graham Portfolio [View article]
    Thank you, danthrax!

    And maybe that's exactly why HPQ meets Graham's criteria, because it's not THAT bad.
    The market is probably just overreacting as usual.

    Again, the reason Graham and his followers do better than others is that they do things that others don't.
    They would buy stocks like HPQ when others wouldn't.

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

    --
    Serenity Stocks
    Nov 30 09:29 AM | 1 Like Like |Link to Comment
  • How To Build A Complete Benjamin Graham Portfolio [View article]
    Perfectly said, Randle Patrick McMurphy!

    Few people have the resources to unearth such information. To apply Graham's 16 calculations, Serenity's database uses 40 fields per stock; for 4000 NYSE and NASDAQ stocks.

    If you have any doubts on how to use Serenity's screeners, please feel free to ask. You can contact Support here or directly on the website.
    Link: http://bit.ly/11n0Uq4

    Thank you!

    --
    Serenity Stocks
    Nov 30 09:17 AM | 1 Like Like |Link to Comment
  • How To Build A Complete Benjamin Graham Portfolio [View article]
    Graham doesn't simply accept a company's stated book value at face value, Bill Greene.

    For Defensive and Enterprising grade stocks, book value is just one of the 7-8 performance figures expected; and the checks are designed to balance each other out.
    For stocks that have absolutely nothing to show other than book value, Graham recommends using NCAV instead. NCAV excludes everything other than current assets / cash equivalents.

    A buyback reduces the shares outstanding. It is simply an exchange of one thing for another. For example, look at its effect on the NCAV per share. You now have less cash divided by fewer shares. A stock buyback is one of the easiest ways for a company with excess cash to increase its EPS, if they feel that their own shares are attractively priced.

    As for assets being undervalued, again, the book value is a theoretical liquidation value and should never be considered in isolation.

    --
    Serenity Stocks
    Nov 29 10:13 PM | 1 Like Like |Link to Comment
  • A Complete Benjamin Graham Analysis For Facebook [View article]
    Thank you for your comment, johnjakubowski.
    Very informative again! In fact, this discussion has had any unusually large amount of information contributed by the readers.

    Marketing and manipulation have been part and parcel of stock markets since their inception (4 centuries ago by the Dutch, incidentally). That's why it becomes all the more important to have a sound objective quantitative framework for making investment decisions that is independent of the market's mood swings.

    In Buffett's own words:

    "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. [The Intelligent Investor] precisely and clearly prescribes the proper framework.... ...Follow Graham and you will profit from [stock-market] folly rather than participate in it."
    Nov 16 01:32 PM | 1 Like Like |Link to Comment
  • A Complete Benjamin Graham Analysis For Facebook [View article]
    Absolutely johnjakubowski!

    IPOs are extremely complex situations. Graham has a very good write up about them in general and it's worth reading.

    In short, his recommendation is to be unusually wary of them.

    One - because IPOs have more salesmanship behind them, thus requiring more resistance and caution from investors.
    Two - because most IPOs are sold under market conditions favorable to the seller, and thus less favorable for the buyer.
    Nov 13 04:20 PM | 1 Like Like |Link to Comment
  • A Complete Benjamin Graham Analysis For Facebook [View article]
    Thank you, gwynfryn!

    Do note that Graham never tried to predict a stock's future price. As far as Graham is concerned, Facebook may remain at current or even higher levels for years.

    Graham's calculations simply recommend the prices at which stocks should be bought to avoid losses and consistently making profits.
    Nov 13 10:27 AM | 1 Like Like |Link to Comment
  • A Complete Benjamin Graham Analysis For Facebook [View article]
    TangoOscar, do note that Graham's calculations don't predict a stock's future price. Facebook may remain at current or even higher levels for years.

    Graham's calculations simply recommend the prices at which stocks should be bought, to be within the margin of safety for consistently making profits.

    This is what Graham had to say about short selling:

    "And selling short a too popular and therefore overvalued issue is apt to be a test not only of one’s courage and stamina but also of the depth of one’s pocketbook. The principle is sound, its successful application is not impossible, but it is distinctly not an easy art to master."
    Nov 13 05:13 AM | 1 Like Like |Link to Comment
  • A Complete Benjamin Graham Analysis For Facebook [View article]
    Hi TangoOscar,

    Note that $8.80 is not Graham's recommended price. $8.80 is the Graham Number, which would have been the recommended price only under ideal conditions.
    Nov 12 11:27 AM | 1 Like Like |Link to Comment
  • A Unique List Of Fully Defensive Graham Stocks [View article]
    Thank you, Norman Tweed!
    Appreciation from such a seasoned investor is truly very encouraging.

    Graham's whole philosophy was of safety - that stocks are intrinsically profitable so you can make more money simply by ensuring that you lose as less as possible.
    It sounds counter intuitive but is true nonetheless, as demonstrated so well by his students such as Warren Buffett.

    Hope you do find the screeners useful!

    And yes, if you need more stocks for investment, do use Graham's Enterprising and NCAV grade stocks instead of partially Defensive ones.
    They are simply different combinations of stability and profitability, and according to Graham, a stock is best suited for investment only if it completely meet one of the sets of criteria.
    Oct 14 01:18 AM | 1 Like Like |Link to Comment
  • Would Ben Graham Buy These REITs? [View article]
    Still looking forward to see how you'd quantitatively screen REITs, Brad.

    Graham had 14 very specific calculations that he applied to each stock, 20 years of dividends being one of them.
    Aug 27 10:07 AM | 1 Like Like |Link to Comment
  • Why The Benjamin Graham Formula Is Misunderstood [View article]
    As mentioned, these lists were arrived at by automated quantitative analysis and, in a couple of instances, may not reflect the latest changes.

    The full screener checks nearly 4000 stocks and more than 300 of them meet one or the other sets of Graham's criteria.
    Once the best stocks from the automated list have been selected, they should always be verified manually before investment.

    Just noticed you run a value investing service.

    How do you decide if a stock meets Warren Buffett's standards?
    Do you strictly use the calculations of his professor, Benjamin Graham, as well?
    Aug 15 11:21 PM | 1 Like Like |Link to Comment
  • Build A Fortress Portfolio Like An Intelligent REIT Investor [View article]
    For him, that's probably pretty concentrated though. On an average, he would have to have several billion in each.

    But coming back to main question, do you apply any quantitative rules to evaluate REITs against each other?
    Can you share them with us?
    Aug 15 01:18 PM | 1 Like Like |Link to Comment
  • The Highest Price To Pay For High-Quality Dividend Stocks [View article]
    Note that Graham did not recommend blindly buying cheap stocks.

    He advocated ensuring that a stock either had sufficient earnings, or sufficient assets, before buying it... along with a number of other stability criteria.
    Aug 9 09:40 AM | 1 Like Like |Link to Comment
  • Groupon Valuation Estimates Using Graham Formula [View article]
    Sorry, but Graham did not recommend this formula.
    This is a common misunderstanding.

    In fact, he used this formula to show why such overly simplistic methods are unreliable.

    For details, please see the seekingalpha article - http://seekingalpha.co...
    Mar 26 07:08 AM | Likes Like |Link to Comment
  • AT&T Inc. Dividend Stock Analysis [View article]
    Even though AT&T (T) has a Reported Book Value of $17.41, it has a (negative) Tangible Book Value of -$6.48.

    So the result of a complete Benjamin Graham analysis for AT&T is:

    Defensive Price (Graham Number): $0.00
    Enterprising Price (Serenity Number): $0.00
    NCAV Price: -$28.17
    Qualitative Result: OK / NCAV
    Graham Price: -$28.17
    Previous Close: $32.38
    Quantitative Result: 0.00%

    Also, to be checked against the Graham Number, Benjamin Graham required that a stock first have uninterrupted earnings for the previous 10 years, uninterrupted dividends for the previous 20 years, and meet 4 other Defensive criteria. In addition to the Defensive criteria, Graham also specified separate sets of criteria for Enterprising and NCAV stocks.

    Given below are the Defensive ratings for AT&T:
    [a rating of 100% or more indicates that the stock clears that criteria]

    Sales: 25,486.00%
    Assets / Liabilities: 35.72%
    Assets / Debt: 0.00%
    Earnings Stability: 100.00%
    Dividend Record: 100.00%
    Earnings Growth: 79.93%
    Graham Number / Price: 0.00%

    http://seekingalpha.co... gives step-by-step instructions on how to build a complete Benjamin Graham portfolio.
    Mar 13 03:00 PM | Likes Like |Link to Comment
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