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  • Invest In Stocks With A Margin Of Safety To Reduce Risk And Enhance Returns [View article]
    Ben Graham actually gave 3 different intrinsic values for a stock - Defensive, Enterprising and NCAV - and 16 criteria for arriving at them them.

    For details, see "How To Build A Complete Benjamin Graham Portfolio":
    http://seekingalpha.co...
    Sep 14, 2013. 02:33 AM | 2 Likes Like |Link to Comment
  • Is This Miner Worth Its Weight In Gold? [View article]
    In later chapters, Graham gives more specific numbers for each of these criteria.

    Summarized from Chapter 14 of The Intelligent Investor - Stock Selection for the Defensive Investor:
    1. Not less than $100 million of annual sales.
    [Note: This works out to $500 million today based on the difference in CPI/Inflation from 1973]
    2-A. Current assets should be at least twice current liabilities.
    2-B. Long-term debt should not exceed the net current assets.
    3. Some earnings for the common stock in each of the past 10 years.
    4. Uninterrupted [dividend] payments for at least the past 20 years.
    5. A minimum increase of at least one-third in per-share earnings in the past 10 years.
    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.
    May 25, 2013. 10:58 PM | 2 Likes Like |Link to Comment
  • 6 S&P 500 Dividend Stocks Undervalued By Free Cash Flow And The Graham Number [View article]
    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.

    Aflac Inc fails the criteria for liabilities and debt.
    Humana Inc fails the criteria for liabilities and dividends.
    L-3 Communications Holdings Inc fails the criteria for liabilities, debt and dividends.
    Northrop Grumman Corp fails the criteria for liabilities and debt.
    Principal Financial Group Inc fails all the criteria other than Sales and Earnings stability.
    Torchmark Corp fails the criteria for liabilities and debt.
    Apr 16, 2013. 09:04 AM | 2 Likes Like |Link to Comment
  • 10 Stocks Meeting Benjamin Graham's Defensive Criteria In 2013 [View article]
    Hello tyouth,

    Serenity excludes Goodwill and Intangibles while calculating Book value and for INTC, that comes to $7.13.
    Hence the lower Graham Number:
    GN = sqrt(22.5 x 2.13 EPS x 7.13 BVPS) = $18.49

    Book value, also known as Net Tangible Assets, is the theoretical liquidation value of a share and is not traditionally supposed to include Goodwill and Intangibles.

    But in practice, this is not always followed.
    So Serenity does not use reported Book Values.
    Mar 29, 2013. 12:36 AM | 2 Likes Like |Link to Comment
  • 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
  • Go Ugly Early When It Comes To Benjamin Graham's Stocks Trading Below Net Current Asset Value [View article]
    Excellent point, frrizzo380!
    Mar 28, 2015. 03:04 PM | 1 Like Like |Link to Comment
  • Are You Making These 5 Common Investing Mistakes [View article]
    The Graham references and scans in Serenity's articles are all publicly available. Interested readers are encouraged to look them up and make up their own minds.

    Thank you.
    Mar 24, 2015. 12:42 PM | 1 Like Like |Link to Comment
  • Are You Making These 5 Common Investing Mistakes [View article]
    > Gravity (NASDAQ:GRVY) was and still is a net net.

    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.

    The Net Current Asset Value (or NCAV/Net-Net) valuation method was introduced by Graham. But Graham also recommended that an NCAV stock have a positive EPS figure to be eligible for investment.

    The EPS requirement also makes sense if you think about it. There's really not much point buying a stock for its assets, if the company's losing money.

    GRVY has had a negative EPS for 7 out of the last 10 years. GRVY is thus not given a Graham grade on Serenity's database (despite selling under its NCAV).

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

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

    Another great example is the following formula:
    Intrinsic Value = EPS x (8.5 + 2xGrowth)

    The Old School Value website cites this formula as the other Graham valuation method it uses.

    Benjamin 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 often mistakenly used today instead of Graham's actual (and more thorough) methods.

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

    Thank you.
    Mar 24, 2015. 12:17 PM | 1 Like Like |Link to Comment
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