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  • For Buy-And-Hold Investors, It's Really Hard To Lose Money In The Stock Market (Part I) [View article]
    Great topic and very nicely covered!

    In a 2012 article, Serenity too had recommended VFINX as one of the investments Benjamin Graham might have recommended:

    Article 1: How To Build A Complete Benjamin Graham Portfolio
    http://seekingalpha.co...
    (see "Strategy 1: Zero Effort - Index Funds")

    Graham often emphasized that most mutual funds did not beat the market average, as measured by the indices. He thus recommended that the first strategy for any investor - one that required nearly no effort - was to proportionally invest in stocks listed in the indices. This is something that can be done a lot more easily today, by simply investing in an index fund.

    Warren Buffett once wrote an article explaining how Benjamin Graham's principles are everlasting, their results irrefutable, and his followers consistently exceptional. It's 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.
    Even when Graham's recommended methods are used, they are heavily modified - often beyond recognition - to fit the stocks, rather than having stocks clear them.

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

    He also spent nearly 50 years developing and backtesting the 17 rules in his investment framework; a framework that has been repeatedly endorsed by some of the world's most successful investors.

    Article 2: http://seekingalpha.co... shows how to do an exact 17-point Benjamin Graham assessment for 5000+ NYSE and NASDAQ stocks; with no modifications other than adjustments for inflation.
    Oct 14, 2014. 04:53 PM | 1 Like Like |Link to Comment
  • Vanguard Natural Resources: Valuation Targets Price At $20 [View article]
    Hello Bryce_in_TX,

    This article was not published by Serenity Stocks.

    The numbers applied on Serenity Stocks are all the same ones Graham recommends - EPS, BVPS, TVBPS etc.

    Graham spent nearly 50 years developing and backtesting the 17 rules in his investment framework; a framework that has been repeatedly endorsed by some of the world's most successful investors, especially Warren Buffett.

    The article, however, applies only a very small part of his framework and applies that very wrongly.

    VNR may or may not be a good investment. It just doesn't clear Graham's rules.
    Oct 10, 2014. 04:44 PM | 1 Like Like |Link to Comment
  • Splunk: Price Matters [View article]
    Benjamin Graham recommended various categories of stocks - Index, Defensive, Enterprising and NCAV. He emphasized that the secret of sound investment was the "Margin of Safety", and specified precise Qualitative and Quantitative rules for each type of stock in his investment framework.

    For example, given below are the actual Graham ratings for Splunk Inc (SPLK).

    Defensive Graham investment requires all the ratings to be at least 100%.
    Enterprising Graham investment requires the ratings to be at least - CA/2CL : 75%, NCA/LTD : 90%, EPS Stability: 50%, Div Record: 5% and GN/PC: 137%.

    Splunk Inc - Defensive Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 60.52%
    Current Assets ÷ [2 x Current Liabilities]: 238.77%
    Net Current Assets ÷ Long Term Debt: 100.00%
    Earnings Stability (100% ⇒ 10 Years): 0.00%
    Dividend Record (100% ⇒ 20 Years): 0.00%
    Earnings Growth (100% ⇒ 30% Growth): 0.00%
    Graham Number ÷ Previous Close: 0.00%

    Warren Buffett himself once wrote an article explaining how Benjamin Graham's principles are everlasting, their results irrefutable, and his followers consistently exceptional. It's 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.

    Even when Graham's recommended methods are used, they are modified - often beyond recognition - to fit the stocks, rather than having stocks clear them.

    Article 1: http://seekingalpha.co... shows how to do an exact 17-point Benjamin Graham assessment for 5000+ NYSE and NASDAQ stocks; with no alterations other than adjustments for inflation.
    Oct 10, 2014. 10:14 AM | 1 Like Like |Link to Comment
  • AT&T Inc.: Well Positioned And Trading Below Fair Value [View article]
    Before being checked against the Graham Number, Benjamin Graham required that a stock first meet 6 other qualitative criteria.

    For example, given below are the actual Graham ratings for AT&T Inc (T).

    Defensive Graham investment requires all the ratings to be at least 100%.
    Enterprising Graham investment requires the ratings to be at least - CA/2CL : 75%, NCA/LTD : 90%, EPS Stability: 50%, Div Record: 5% and GN/PC: 137%.

    AT&T Inc. (T) - Defensive Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 25,750.00%
    Current Assets ÷ [2 x Current Liabilities]: 33.14%
    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): 85.40%
    Graham Number ÷ Previous Close: 74.93%

    Warren Buffett once wrote an article explaining how Benjamin Graham's principles are everlasting, their results irrefutable, and his followers consistently exceptional. It's called "The Superinvestors of Graham-and-Doddsville".

    But most of what Graham actually taught has been forgotten today, or is used wrongly.
    The Graham Number is a great example.

    Even when Graham's recommended methods are used, they are often modified beyond recognition to fit the stocks, rather than having stocks clear them.

    http://seekingalpha.co... shows how to do an 17-point Benjamin Graham assessment for 5000+ NYSE and NASDAQ stocks; with no deviations other than adjustments for inflation.
    Oct 8, 2014. 10:43 AM | 1 Like Like |Link to Comment
  • 5 More Companies For Defensive Investors With Low PE Ratios [View article]
    Graham gives the following warnings with 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".

    On the other hand, he distinctly recommends the methods in the unmistakably named "Stock Selection" chapters.

    The two articles mentioned in the first comment have references, page numbers and scans of the relevant pages.

    Thank you.
    Sep 28, 2014. 10:11 AM | 1 Like Like |Link to Comment
  • 5 More Companies For Defensive Investors With Low PE Ratios [View article]
    Intrinsic Value = EPS x (8.5 + 2xGrowth)

    Benjamin Graham actually gave several warnings about this formula and only used it to show why such oversimplified growth estimates are unreliable. This formula is popular only due to a printing omission in recent editions of The Intelligent Investor.

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

    Warren Buffett once wrote an article explaining how Benjamin Graham's principles are everlasting, their results irrefutable, and his followers consistently exceptional. It's called the 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 often heavily modified to fit the stocks rather than having stocks meet 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 ensuring adequate size of Defensive stocks. Using market capitalization instead will - all other things being equal - rate overvalued stocks higher than for undervalued ones.

    The below criteria from the article too are all extremely different from what Graham recommended:
    Dividend Record - has paid a dividend for at least 10 straight years.
    Moderate PEmg ratio (price over normalized earnings) - PEmg is less than 20
    Moderate Price to Assets - PB ratio is less than 2.5 or PB x PEmg is less than 50.

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

    For example, given below are the actual Graham ratings for Mattel Inc (MAT).

    Defensive Graham investment requires all the ratings to be at least 100%.
    Enterprising Graham investment requires the ratings to be at least - CA/2CL : 75%, NCA/LTD : 90%, EPS Stability: 50%, Div Record: 5% and GN/PC: 137%.

    Mattel Inc - Defensive Graham Ratings
    Sales | Size (100% ⇒ $500 Million): 1,296.00%
    Current Assets ÷ [2 x Current Liabilities]: 161.26%
    Net Current Assets ÷ Long Term Debt: 145.66%
    Earnings Stability (100% ⇒ 10 Years): 100.00%
    Dividend Record (100% ⇒ 20 Years): 100.00%
    Earnings Growth (100% ⇒ 30% Growth): 136.44%
    Graham Number ÷ Previous Close: 70.51%

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

    Mattel Inc - Final Graham Assessment
    Defensive Price (Graham Number): $21.72
    Enterprising Price (Serenity Number): $11.35
    NCAV Price: $0.56
    Qualitative Result: Excellent / Defensive
    Graham Price: $21.72
    Previous Close: $30.81
    Quantitative Result: 70.50%

    Graham spent nearly 50 years developing and backtesting the 17 rules in his investment framework; a framework that has been repeatedly endorsed by some of the world's most successful investors.

    Article 2: http://seekingalpha.co... shows how to do an actual 17-point Benjamin Graham assessment for 5000 NYSE and NASDAQ stocks; with no changes other than adjustments for inflation.
    Sep 27, 2014. 11:51 AM | 1 Like Like |Link to Comment
  • 5 Undervalued Companies For The Enterprising Investor Near 52-Week Lows [View article]
    Dear Readers,

    Graham gives these warnings with this formula:
    1. "Warning: This material is supplied for illustrative purposes only".
    2. "Note that we do not suggest that this formula gives the “true value” of a growth stock".
    3. "Let the reader not be misled into thinking that such projections have any high degree of reliability".

    On the other hand, he unequivocally recommends the methods in the two Stock Selection chapters.

    The two articles mentioned in the previous comment have references, page numbers and scans of the relevant pages.

    Thank you!
    Aug 14, 2014. 10:22 AM | 1 Like Like |Link to Comment
  • 5 Undervalued Companies For The Defensive Investor With High Dividend Yields [View article]
    Dear Readers,

    The two articles linked to in the previous comment include all required references and scans.
    Please go through them and decide for yourself what Graham actually taught, and what he warned against.

    Thank you.
    Jul 26, 2014. 10:23 AM | 1 Like Like |Link to Comment
  • 5 Undervalued Companies For The Defensive Investor With High Dividend Yields [View article]
    Intrinsic Value = Earnings x (8.5 + 2 x growth)

    If the valuation is based on the above formula as the ModernGraham website says, Graham actually warned against this formula and only used it to show why such oversimplified growth formulas are unreliable.
    This formula is popular only due to a printing omission in later editions of The Intelligent Investor. http://seekingalpha.co... discusses the issue in detail.

    Benjamin Graham actually recommended three different categories of stocks - Defensive, Enterprising and NCAV - with 17 different qualitative and quantitative criteria for finding them.

    For example, given below are the actual Graham ratings for Intel Corp (NASDAQ:INTC)

    Defensive Graham investment requires all the ratings to be at least 100%.
    Enterprising Graham investment requires the ratings to be at least - CA/CL : 75%, CA/LTD : 90%, EPS Stability: 50%, Div Record: 5% and GN/Price: 137%.

    Intel Corp - Defensive Graham Ratings
    Sales | Size: 10,542.00%
    Current Assets / Current Liabilities: 118.23%
    Current Assets / Long Term Debt: 140.65%
    Earnings Stability: 100.00%
    Dividend Record: 95.00%
    Earnings Growth: 148.45%
    Graham Number / Current Price: 55.47%

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

    Intel Corp - Final Graham Assessment
    Defensive Price (Graham Number): $19.00
    Enterprising Price (Serenity Number): $13.88
    NCAV Price: -$0.41
    Qualitative Result: Good / Enterprising
    Graham Price: $13.88
    Previous Close: $34.25
    Quantitative Result: 40.53%

    http://seekingalpha.co... discusses Graham's actual 17 stock selection criteria and shows how to apply them to 5000 NYSE & NASDAQ stocks today, with no changes other than adjustments for inflation.
    Jul 26, 2014. 08:24 AM | 1 Like Like |Link to Comment
  • 6 Big Banking Stocks Trading 25% Below Their Graham Number [View article]
    If one were to invest based solely on the Graham Number, Serenity's screeners currently list 580 NYSE and NASDAQ stocks selling below their Graham Numbers; 270 of them 25% below.

    But before being checked against the Graham Number, Benjamin Graham required that a stock first meet 6 other Qualitative Defensive criteria. None of these stocks meet a complete set of Graham criteria for Defensive, Enterprising or NCAV investment.

    For example, given below are the Graham ratings for Goldman Sachs Group Inc (NYSE:GS).
    Sales | Size: 6,842.00%
    Current Assets / Current Liabilities: 0.00%
    Current Assets / Long Term Debt: 0.00%
    Earnings Stability: 100.00%
    Dividend Record: 75.00%
    Earnings Growth: 63.34%
    Graham Number / Current Price: 142.90%

    Trading 25% below the Graham Number just means that these stocks score more than 133% on the last rating.

    True Defensive Graham investment requires all the ratings to be at least 100%.
    True Enterprising Graham investment requires the ratings to be at least - CA/CL : 75%, CA/LTD : 90%, EPS Stability: 50%, Div Record: 5% and GN/Price: 137%.

    Please note that this does not necessarily mean that these stocks are bad investments. The actual Graham criteria are just extremely selective. Only stocks of high investment quality selling at attractive price ratios clear them.

    However, their selectivity is what makes the Graham criteria unique. It would be better to broaden the scope of one's search, than to use the criteria incompletely.

    http://seekingalpha.co... shows how to search through 5000 NYSE & NASDAQ stocks, to find ones that meet the actual Graham criteria as closely as possible.
    Jul 19, 2014. 11:20 AM | 1 Like Like |Link to Comment
  • Investing For Beginners With Benjamin Graham [View article]
    Hello drhay53,

    Thank you for choosing Serenity's article for your first comment on Seekingalpha.

    If you follow Graham's principles rigorously, it's unlikely that a transaction will ever go completely against you. But there will come times when the general market finally realizes the true worth of a stock and corrects its assessment of (or as more likely, severely overvalues) the stock. Or maybe the company's performance no longer justifies its stock price.

    Once a stock reaches this point and exceeds Graham's recommended price (for that year's figures), you can move your investment to other stocks that are now Graham approved. Typically, you should only have to do such an overhaul once in 2-3 years.

    Graham himself wrote:
    "The investor need not watch his companies’ performance like a hawk; but he should give it a good, hard look from time to time."
    Jul 2, 2014. 03:55 AM | 1 Like Like |Link to Comment
  • 5 Undervalued Companies With A High Dividend Yield For The Enterprising Investor [View article]
    Given below are the Defensive Graham ratings for the above stocks.

    Defensive Graham investment requires all the ratings to be at least 100%.
    Enterprising Graham investment requires the ratings to be at least - Assets / Liabilities: 75%, Assets / Debt: 90%, Earnings Stability: 50%, Dividend Record: 5% and Graham Number / Price: 137%.

    Ford Motor Company - Defensive Graham Ratings
    Sales: 29,384.00%
    Assets / Liabilities: 102.23%
    Assets / Debt: 101.06%
    Earnings Stability: 50.00%
    Dividend Record: 10.00%
    Earnings Growth: 83.46%
    Graham Number / Price: 91.25%

    International Paper Co - Defensive Graham Ratings
    Sales: 5,816.00%
    Assets / Liabilities: 88.01%
    Assets / Debt: 44.16%
    Earnings Stability: 50.00%
    Dividend Record: 100.00%
    Earnings Growth: 87.09%
    Graham Number / Price: 44.63%

    Gannett Co. Inc - Defensive Graham Ratings
    Sales: 1,032.00%
    Assets / Liabilities: 95.49%
    Assets / Debt: 24.72%
    Earnings Stability: 50.00%
    Dividend Record: 100.00%
    Earnings Growth: 25.93%
    Graham Number / Price: 0.00%

    Kla-tencor Corp - Defensive Graham Ratings
    Sales: 568.00%
    Assets / Liabilities: 252.55%
    Assets / Debt: 466.95%
    Earnings Stability: 40.00%
    Dividend Record: 45.00%
    Earnings Growth: 170.82%
    Graham Number / Price: 55.51%

    Fifth Third Bancorp - Defensive Graham Ratings
    Sales: 1,358.00%
    Assets / Liabilities: 0.00%
    Assets / Debt: 0.00%
    Earnings Stability: 50.00%
    Dividend Record: 100.00%
    Earnings Growth: 52.55%
    Graham Number / Price: 110.73%

    The final Assessment for the stocks is also given below.
    The Quantitative Result for a stock has to be 100% for true Graham investment (Quantitative Result = Graham Price / Previous Close).

    Ford Motor Company - Final Graham Assessment
    Defensive Price (Graham Number): $15.49
    Enterprising Price (Serenity Number): $11.31
    NCAV Price: -$6.04
    Qualitative Result: Good / Enterprising
    Graham Price: $11.31
    Previous Close: $16.97
    Quantitative Result: 66.65%

    International Paper Co - Final Graham Assessment
    Defensive Price (Graham Number): $21.67
    Enterprising Price (Serenity Number): $15.82
    NCAV Price: -$33.00
    Qualitative Result: OK / NCAV
    Graham Price: $0.00
    Previous Close: $48.55
    Quantitative Result: 0.00%

    Gannett Co. Inc - Final Graham Assessment
    Defensive Price (Graham Number): $0.00
    Enterprising Price (Serenity Number): $0.00
    NCAV Price: -$20.32
    Qualitative Result: OK / NCAV
    Graham Price: $0.00
    Previous Close: $29.19
    Quantitative Result: 0.00%

    Kla-tencor Corp - Final Graham Assessment
    Defensive Price (Graham Number): $38.55
    Enterprising Price (Serenity Number): $28.15
    NCAV Price: $15.39
    Qualitative Result: OK / NCAV
    Graham Price: $15.39
    Previous Close: $69.44
    Quantitative Result: 22.16%

    Fifth Third Bancorp - Final Graham Assessment
    Defensive Price (Graham Number): $23.76
    Enterprising Price (Serenity Number): $17.35
    NCAV Price: -$136.66
    Qualitative Result: OK / NCAV
    Graham Price: $0.00
    Previous Close: $21.46
    Quantitative Result: 0.00%

    http://seekingalpha.co... given a detailed tutorial on finding stocks meeting Graham's actual criteria today.
    Jun 25, 2014. 10:50 AM | 1 Like Like |Link to Comment
  • Investing For Beginners With Benjamin Graham [View article]
    It's the TBVPS times the EPS, Profcannon.

    Note that the P/E ratio is inversely proportional to the EPS. When one goes up, the other goes down (for a given price).

    So yes, lower PEs are better.
    And higher EPS values and higher BVPS values are preferable.
    Jun 12, 2014. 10:23 AM | 1 Like Like |Link to Comment
  • 7 Defensive Investor Quick Picks For March [View article]
    Hello findrichard,

    That is exactly what Serenity's stock screeners do.

    Two entire chapters of The Intelligent Investor are dedicated to methods that Graham recommends for investors:

    1. Chapter 14: Stock Selection for the Defensive Investor, and
    2. Chapter 15: Stock Selection for the Enterprising Investor

    The sixteen criteria mentioned in those chapters are designed to verify all aspects of a stock before investment. http://seekingalpha.co... lists all sixteen criteria, and gives step-by-step instructions on how to find stocks that meet them.
    May 27, 2014. 11:44 PM | 1 Like Like |Link to Comment
  • Backtesting A Value Strategy [View article]
    Nice work highlighting an oft-neglected Graham technique that is both simple and effective!

    However, NCAV stocks were the last class of stocks recommended by Graham - after Defensive and Enterprising stocks - and also required the most diversification, because NCAV calculations are also the most prone to accounting manipulation. Additionally, Graham required NCAV stocks to have no losses in the last 12 months.

    Graham refined and backtested his methods for almost 50 years before recommending them, and Warren Buffett has spoken for years about their timeless effectiveness. If one were to look hard enough (using technology to do the hard work), there are still quite a few Defensive and Enterprising stocks to be found today, apart from the good number of NCAV stocks.

    http://seekingalpha.co... gives step-by-step instructions on how to build a authentic Benjamin Graham portfolio today.
    Apr 21, 2014. 01:38 AM | 1 Like Like |Link to Comment
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