The concerns you've posted are all the usual arguments to Graham's methods, 12284371. Graham and Buffett have answered them many times over the years.

PS: Book values are calculated with depreciated costs, not original costs.]]>

The concerns you've posted are all the usual arguments to Graham's methods, 12284371. Graham and Buffett have answered them many times over the years.

PS: Book values are calculated with depreciated costs, not original costs.]]>

Could you please share the page number and edition for that passage from The Intelligent Investor that you've quoted?

It does seem like something Graham would write - and is attributed to him on multiple websites - but is nowhere to be found in the actual book.

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 attributed to him instead. The below formula is one example:

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. But due to a printing omission in recent editions of The Intelligent Investor, this formula is more popular today as the "Benjamin Graham Formula" than the methods Graham actually recommended.

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

Graham actually recommended various categories of stocks - Index, Defensive, Enterprising and NCAV - in the unmistakably named "Stock Selection" chapters of The Intelligent Investor. 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.

But even when Graham's actual methods are used today, they are often modified to fit the stocks rather than having stocks meet them.

Article 2: http://seekingalpha.co... shows how to do an exact 17-point Benjamin Graham assessment for 5000 NYSE and NASDAQ stocks.]]>

Could you please share the page number and edition for that passage from The Intelligent Investor that you've quoted?

It does seem like something Graham would write - and is attributed to him on multiple websites - but is nowhere to be found in the actual book.

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 attributed to him instead. The below formula is one example:

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. But due to a printing omission in recent editions of The Intelligent Investor, this formula is more popular today as the "Benjamin Graham Formula" than the methods Graham actually recommended.

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

Graham actually recommended various categories of stocks - Index, Defensive, Enterprising and NCAV - in the unmistakably named "Stock Selection" chapters of The Intelligent Investor. 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.

But even when Graham's actual methods are used today, they are often modified to fit the stocks rather than having stocks meet them.

Article 2: http://seekingalpha.co... shows how to do an exact 17-point Benjamin Graham assessment for 5000 NYSE and NASDAQ stocks.]]>

For example, given below are the actual Graham ratings for PetSmart Inc (PETM).

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%.

PetSmart Inc - Defensive Graham Ratings

Sales | Size (100% ⇒ $500 Million): 1,384.00%

Current Assets ÷ [2 x Current Liabilities]: 82.98%

Net Current Assets ÷ Long Term Debt: 116.01%

Earnings Stability (100% ⇒ 10 Years): 100.00%

Dividend Record (100% ⇒ 20 Years): 55.00%

Earnings Growth (100% ⇒ 30% Growth): 210.50%

Graham Number ÷ Previous Close: 39.98%

The Final Graham Assessment for PetSmart Inc is also given below.

The Quantitative Result (Graham Price ÷ Previous Close) for a stock has to be 100% for true Graham investment.

PetSmart Inc - Final Graham Assessment

Defensive Price (Graham Number): $28.72

Enterprising Price (Serenity Number): $22.63

NCAV Price: -$1.09

Qualitative Result: Good / Enterprising

Graham Price: $22.63

Previous Close: $71.83

Quantitative Result: 31.50%

Graham recommended various categories of stocks - Index, Defensive, Enterprising and NCAV.

The article http://seekingalpha.co... shows how to run the 17-point Benjamin Graham assessment on 5000 NYSE and NASDAQ stocks.]]>

For example, given below are the actual Graham ratings for PetSmart Inc (PETM).

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%.

PetSmart Inc - Defensive Graham Ratings

Sales | Size (100% ⇒ $500 Million): 1,384.00%

Current Assets ÷ [2 x Current Liabilities]: 82.98%

Net Current Assets ÷ Long Term Debt: 116.01%

Earnings Stability (100% ⇒ 10 Years): 100.00%

Dividend Record (100% ⇒ 20 Years): 55.00%

Earnings Growth (100% ⇒ 30% Growth): 210.50%

Graham Number ÷ Previous Close: 39.98%

The Final Graham Assessment for PetSmart Inc is also given below.

The Quantitative Result (Graham Price ÷ Previous Close) for a stock has to be 100% for true Graham investment.

PetSmart Inc - Final Graham Assessment

Defensive Price (Graham Number): $28.72

Enterprising Price (Serenity Number): $22.63

NCAV Price: -$1.09

Qualitative Result: Good / Enterprising

Graham Price: $22.63

Previous Close: $71.83

Quantitative Result: 31.50%

Graham recommended various categories of stocks - Index, Defensive, Enterprising and NCAV.

The article http://seekingalpha.co... shows how to run the 17-point Benjamin Graham assessment on 5000 NYSE and NASDAQ stocks.]]>

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.

On the other hand, Graham distinctly recommended various categories of stocks - Index, Defensive, Enterprising and NCAV - in the unmistakably named "Stock Selection" chapters. He emphasized that the secret of sound investment was the "Margin of Safety", and specified precise qualitative and quantitative criteria for the stocks.

For example, given below are the actual Graham ratings for Check Point Software Technologies (CHKP).

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%.

Check Point Software Technologies - Defensive Graham Ratings

Sales | Size (100% ⇒ $500 Million): 278.00%

Current Assets ÷ [2 x Current Liabilities]: 81.08%

Net Current Assets ÷ Long Term Debt: 100.00%

Earnings Stability (100% ⇒ 10 Years): 100.00%

Dividend Record (100% ⇒ 20 Years): 0.00%

Earnings Growth (100% ⇒ 30% Growth): 200.14%

Graham Number ÷ Previous Close: 49.81%

The Final Graham Assessment for Check Point Software Technologies is also given below.

The Quantitative Result (Graham Price ÷ Previous Close) for a stock has to be 100% for true Graham investment.

Check Point Software Technologies - Final Graham Assessment

Defensive Price (Graham Number): $35.38

Enterprising Price (Serenity Number): $24.34

NCAV Price: $1.64

Qualitative Result: OK / NCAV

Graham Price: $1.64

Previous Close: $71.02

Quantitative Result: 2.31%

Warren Buffett once wrote an article explaining how Benjamin Graham's principles are everlasting, their results unquestionable, and his followers exceptionally successful. 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 actual methods are used, they are often modified to fit the stocks rather than having stocks meet them.

Article 2: http://seekingalpha.co... shows how to do an actual 17-point Benjamin Graham assessment for 5000 NYSE and NASDAQ stocks.]]>

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.

On the other hand, Graham distinctly recommended various categories of stocks - Index, Defensive, Enterprising and NCAV - in the unmistakably named "Stock Selection" chapters. He emphasized that the secret of sound investment was the "Margin of Safety", and specified precise qualitative and quantitative criteria for the stocks.

For example, given below are the actual Graham ratings for Check Point Software Technologies (CHKP).

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%.

Check Point Software Technologies - Defensive Graham Ratings

Sales | Size (100% ⇒ $500 Million): 278.00%

Current Assets ÷ [2 x Current Liabilities]: 81.08%

Net Current Assets ÷ Long Term Debt: 100.00%

Earnings Stability (100% ⇒ 10 Years): 100.00%

Dividend Record (100% ⇒ 20 Years): 0.00%

Earnings Growth (100% ⇒ 30% Growth): 200.14%

Graham Number ÷ Previous Close: 49.81%

The Final Graham Assessment for Check Point Software Technologies is also given below.

The Quantitative Result (Graham Price ÷ Previous Close) for a stock has to be 100% for true Graham investment.

Check Point Software Technologies - Final Graham Assessment

Defensive Price (Graham Number): $35.38

Enterprising Price (Serenity Number): $24.34

NCAV Price: $1.64

Qualitative Result: OK / NCAV

Graham Price: $1.64

Previous Close: $71.02

Quantitative Result: 2.31%

Warren Buffett once wrote an article explaining how Benjamin Graham's principles are everlasting, their results unquestionable, and his followers exceptionally successful. 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 actual methods are used, they are often modified to fit the stocks rather than having stocks meet them.

Article 2: http://seekingalpha.co... shows how to do an actual 17-point Benjamin Graham assessment for 5000 NYSE and NASDAQ stocks.]]>

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.]]>

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.]]>

CA Inc - Defensive Graham Ratings

Sales | Size (100% ⇒ $500 Million): 904.00%

Current Assets ÷ [2 x Current Liabilities]: 58.12%

Net Current Assets ÷ Long Term Debt: 50.88%

Earnings Stability (100% ⇒ 10 Years): 100.00%

Dividend Record (100% ⇒ 20 Years): 100.00%

Earnings Growth (100% ⇒ 30% Growth): 921.54%

Graham Number ÷ Previous Close: 84.58%

Serenity Stocks has a complete 17-point Graham assessment for all 5000 NYSE and NASDAQ stocks. You can look any of them up. No signup or subscription required.

Please keep in mind that Graham's criteria are extremely stringent. Very few stocks clear them completely (by design). But a stock isn't necessarily a bad investment just because it doesn't completely clear the Graham criteria.

The Graham ratings are simply an assessment of how much within the "Margin of Safety" a stock lies.]]>

CA Inc - Defensive Graham Ratings

Sales | Size (100% ⇒ $500 Million): 904.00%

Current Assets ÷ [2 x Current Liabilities]: 58.12%

Net Current Assets ÷ Long Term Debt: 50.88%

Earnings Stability (100% ⇒ 10 Years): 100.00%

Dividend Record (100% ⇒ 20 Years): 100.00%

Earnings Growth (100% ⇒ 30% Growth): 921.54%

Graham Number ÷ Previous Close: 84.58%

Serenity Stocks has a complete 17-point Graham assessment for all 5000 NYSE and NASDAQ stocks. You can look any of them up. No signup or subscription required.

Please keep in mind that Graham's criteria are extremely stringent. Very few stocks clear them completely (by design). But a stock isn't necessarily a bad investment just because it doesn't completely clear the Graham criteria.

The Graham ratings are simply an assessment of how much within the "Margin of Safety" a stock lies.]]>

Benjamin Graham actually warned against 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.

Benjamin 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 the stocks.

For example, given below are the actual Graham ratings for Bed Bath & Beyond Inc (NASDAQ:BBBY).

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%.

Bed Bath & Beyond Inc - Defensive Graham Ratings

Sales | Size (100% ⇒ $500 Million): 2,300.00%

Current Assets ÷ [2 x Current Liabilities]: 103.66%

Net Current Assets ÷ Long Term Debt: 100.00%

Earnings Stability (100% ⇒ 10 Years): 100.00%

Dividend Record (100% ⇒ 20 Years): 0.00%

Earnings Growth (100% ⇒ 30% Growth): 182.25%

Graham Number ÷ Previous Close: 69.02%

The Final Graham Assessment for Bed Bath & Beyond Inc is also given below.

The Quantitative Result (Graham Price ÷ Previous Close) for a stock has to be 100% for true Graham investment.

Bed Bath & Beyond Inc - Final Graham Assessment

Defensive Price (Graham Number): $44.35

Enterprising Price (Serenity Number): $31.09

NCAV Price: $6.82

Qualitative Result: OK / NCAV

Graham Price: $6.82

Previous Close: $64.26

Quantitative Result: 10.61%

Warren Buffett once wrote an article explaining how Benjamin Graham's principles are everlasting, their results unquestionable, and his followers exceptionally successful. 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 actual methods are used, they are often modified to fit the stocks rather than having stocks meet them.

Article 2: http://seekingalpha.co... shows how to apply Graham's actual 17 stock selection criteria to 5000 NYSE & NASDAQ stocks today.]]>

Benjamin Graham actually warned against 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.

Benjamin 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 the stocks.

For example, given below are the actual Graham ratings for Bed Bath & Beyond Inc (NASDAQ:BBBY).

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%.

Bed Bath & Beyond Inc - Defensive Graham Ratings

Sales | Size (100% ⇒ $500 Million): 2,300.00%

Current Assets ÷ [2 x Current Liabilities]: 103.66%

Net Current Assets ÷ Long Term Debt: 100.00%

Earnings Stability (100% ⇒ 10 Years): 100.00%

Dividend Record (100% ⇒ 20 Years): 0.00%

Earnings Growth (100% ⇒ 30% Growth): 182.25%

Graham Number ÷ Previous Close: 69.02%

The Final Graham Assessment for Bed Bath & Beyond Inc is also given below.

The Quantitative Result (Graham Price ÷ Previous Close) for a stock has to be 100% for true Graham investment.

Bed Bath & Beyond Inc - Final Graham Assessment

Defensive Price (Graham Number): $44.35

Enterprising Price (Serenity Number): $31.09

NCAV Price: $6.82

Qualitative Result: OK / NCAV

Graham Price: $6.82

Previous Close: $64.26

Quantitative Result: 10.61%

Warren Buffett once wrote an article explaining how Benjamin Graham's principles are everlasting, their results unquestionable, and his followers exceptionally successful. 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 actual methods are used, they are often modified to fit the stocks rather than having stocks meet them.

Article 2: http://seekingalpha.co... shows how to apply Graham's actual 17 stock selection criteria to 5000 NYSE & NASDAQ stocks today.]]>

Again, cigar butt stocks only refer to the simplistic NCAV or Net-Net stocks.

Graham's more important stock recommendations are often ignored.

Buffett himself wrote an article called "The Superinvestors of Graham-and-Doddsville" describing how Graham's principles are unquestionable and timeless.

But most of what Graham actually taught is no longer used today, and what he warned against is attributed to him instead. The above formula is a classic example.]]>

Again, cigar butt stocks only refer to the simplistic NCAV or Net-Net stocks.

Graham's more important stock recommendations are often ignored.

Buffett himself wrote an article called "The Superinvestors of Graham-and-Doddsville" describing how Graham's principles are unquestionable and timeless.

But most of what Graham actually taught is no longer used today, and what he warned against is attributed to him instead. The above formula is a classic example.]]>

Warren Buffett himself says he is 85% Benjamin Graham and 15% Phil Fisher.

Buffett even named his son after Graham, and describes Graham's book The Intelligent Investor as "by far the best book about investing ever written".

Given below is part of the conclusion from the study "The Evolution of the Idea of Value Investing: From Benjamin Graham to Warren Buffett" by Robert F. Bierig, Duke University:

"A [casual] observer of Buffett today would find it difficult to see the Ben Graham influence in many of his activities. However, that influence remains at the core of Buffett’s investment model. Buffett continues to think about stocks as fractional ownership interests in underlying businesses, he continues to operate under the assumption that there is a distinction between price and value, and he continues to search for the largest discrepancy between those two items. In other words, he continues to be a value investor."

NCAV stocks, or Net-Net stocks, are simply the most well-known of Graham's strategies, and the source of the general misconception that Graham only recommended cheap stocks. But Graham actually recommended Index, Defensive and Enterprising stocks before NCAV stocks and all were allowed higher Quantitative valuations and required greater Qualitative checks.

Graham did advocate paying more for Quality. His only prerequisite was that there be the Margin of Safety between price and value, whether the value be Qualitative or Quantitative.]]>

Warren Buffett himself says he is 85% Benjamin Graham and 15% Phil Fisher.

Buffett even named his son after Graham, and describes Graham's book The Intelligent Investor as "by far the best book about investing ever written".

Given below is part of the conclusion from the study "The Evolution of the Idea of Value Investing: From Benjamin Graham to Warren Buffett" by Robert F. Bierig, Duke University:

"A [casual] observer of Buffett today would find it difficult to see the Ben Graham influence in many of his activities. However, that influence remains at the core of Buffett’s investment model. Buffett continues to think about stocks as fractional ownership interests in underlying businesses, he continues to operate under the assumption that there is a distinction between price and value, and he continues to search for the largest discrepancy between those two items. In other words, he continues to be a value investor."

NCAV stocks, or Net-Net stocks, are simply the most well-known of Graham's strategies, and the source of the general misconception that Graham only recommended cheap stocks. But Graham actually recommended Index, Defensive and Enterprising stocks before NCAV stocks and all were allowed higher Quantitative valuations and required greater Qualitative checks.

Graham did advocate paying more for Quality. His only prerequisite was that there be the Margin of Safety between price and value, whether the value be Qualitative or Quantitative.]]>

Benjamin Graham actually warned against this formula and only used it to show why such oversimplified estimations 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.

Benjamin Graham actually recommended different categories of stocks - Index, Defensive, Enterprising and NCAV - with different qualitative and quantitative criteria for each category.

For example, given below are the actual Graham ratings for Gilead Sciences Inc (NASDAQ:GILD).

Gilead Sciences Inc - Defensive Graham Ratings

Sales | Size (100% ⇒ $500 Million): 2,240.00%

Current Assets ÷ [2 x Current Liabilities]: 57.50%

Net Current Assets ÷ Long Term Debt: 24.08%

Earnings Stability (100% ⇒ 10 Years): 70.00%

Dividend Record (100% ⇒ 20 Years): 0.00%

Earnings Growth (100% ⇒ 30% Growth): 607.35%

Graham Number ÷ Previous Close: 18.48%

Defensive Graham investment requires that all ratings be at least 100%.

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

Article 2: http://seekingalpha.co... discusses Graham's actual investment strategies and shows how to apply his seventeen stock selection criteria to 5000 NYSE & NASDAQ stocks today.]]>

Benjamin Graham actually warned against this formula and only used it to show why such oversimplified estimations 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.

Benjamin Graham actually recommended different categories of stocks - Index, Defensive, Enterprising and NCAV - with different qualitative and quantitative criteria for each category.

For example, given below are the actual Graham ratings for Gilead Sciences Inc (NASDAQ:GILD).

Gilead Sciences Inc - Defensive Graham Ratings

Sales | Size (100% ⇒ $500 Million): 2,240.00%

Current Assets ÷ [2 x Current Liabilities]: 57.50%

Net Current Assets ÷ Long Term Debt: 24.08%

Earnings Stability (100% ⇒ 10 Years): 70.00%

Dividend Record (100% ⇒ 20 Years): 0.00%

Earnings Growth (100% ⇒ 30% Growth): 607.35%

Graham Number ÷ Previous Close: 18.48%

Defensive Graham investment requires that all ratings be at least 100%.

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

Article 2: http://seekingalpha.co... discusses Graham's actual investment strategies and shows how to apply his seventeen stock selection criteria to 5000 NYSE & NASDAQ stocks today.]]>

The core philosophy of Rand's books is called Objectivism.

Graham recommended analysis using only objective past numbers, instead of subjective future estimates.

Rand said “The hardest thing to explain is the glaringly evident which everybody has decided not to see.”

Graham said "You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right."

Rand said "Emotions are not tools of cognition . . . one must differentiate between one’s thoughts and one’s emotions with full clarity and precision."

Graham said "Individuals who cannot master their emotions are ill-suited to profit from the investment process.".

Rand said “A creative man is motivated by the desire to achieve, not by the desire to beat others.”

Graham said "To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks."

There are many more similarities between the two philosophies. But rather than hypothesizing what a John Galt or a Howard Roark might have done, we could simply follow the extremely precise rules that Benjamin Graham himself has set down for selecting stocks.

NCAV stocks are simply the most well-known of Graham's strategies, and the source of the general misconception that Graham only recommended cheap stocks. Benjamin Graham actually recommended different categories of stocks - Index, Defensive, Enterprising and NCAV - with different qualitative and quantitative criteria for each category.

Article 1: http://seekingalpha.co... discusses Graham's 17 stock selection criteria and shows how to apply them to 5000 NYSE & NASDAQ stocks today.

Also, if memory (from a couple of decades ago) serves, Peter Keating and his "second-handers" from The Fountainhead appropriate Howard Roark's innovative design for an important building and build it themselves, after having made grotesque modifications based on their own incompetent understanding of architecture.

Roark then destroys this corruption of his genius, as an expression of the struggle of individualism against collectivism. The Graham we know from his books was perhaps too benign and generous for anything so extreme, but here's something a younger Graham himself might have blown up.

Intrinsic Value = Earnings x (8.5 + 2 x growth)

This is a formula that is often attributed to Graham today. Graham actually warned against this formula. He only used it to show why such growth predictions are unreliable, and as an example of what NOT to do.

But incredibly - due to a minor misprint in recent editions of The Intelligent Investor - most analysts claiming to use Graham's methods today, recommend stocks using this formula, instead of the methods he actually recommended in the "Stock Selection" chapters.

Article 2: http://seekingalpha.co... discusses the issue in detail.]]>

The core philosophy of Rand's books is called Objectivism.

Graham recommended analysis using only objective past numbers, instead of subjective future estimates.

Rand said “The hardest thing to explain is the glaringly evident which everybody has decided not to see.”

Graham said "You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right."

Rand said "Emotions are not tools of cognition . . . one must differentiate between one’s thoughts and one’s emotions with full clarity and precision."

Graham said "Individuals who cannot master their emotions are ill-suited to profit from the investment process.".

Rand said “A creative man is motivated by the desire to achieve, not by the desire to beat others.”

Graham said "To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks."

There are many more similarities between the two philosophies. But rather than hypothesizing what a John Galt or a Howard Roark might have done, we could simply follow the extremely precise rules that Benjamin Graham himself has set down for selecting stocks.

NCAV stocks are simply the most well-known of Graham's strategies, and the source of the general misconception that Graham only recommended cheap stocks. Benjamin Graham actually recommended different categories of stocks - Index, Defensive, Enterprising and NCAV - with different qualitative and quantitative criteria for each category.

Article 1: http://seekingalpha.co... discusses Graham's 17 stock selection criteria and shows how to apply them to 5000 NYSE & NASDAQ stocks today.

Also, if memory (from a couple of decades ago) serves, Peter Keating and his "second-handers" from The Fountainhead appropriate Howard Roark's innovative design for an important building and build it themselves, after having made grotesque modifications based on their own incompetent understanding of architecture.

Roark then destroys this corruption of his genius, as an expression of the struggle of individualism against collectivism. The Graham we know from his books was perhaps too benign and generous for anything so extreme, but here's something a younger Graham himself might have blown up.

Intrinsic Value = Earnings x (8.5 + 2 x growth)

This is a formula that is often attributed to Graham today. Graham actually warned against this formula. He only used it to show why such growth predictions are unreliable, and as an example of what NOT to do.

But incredibly - due to a minor misprint in recent editions of The Intelligent Investor - most analysts claiming to use Graham's methods today, recommend stocks using this formula, instead of the methods he actually recommended in the "Stock Selection" chapters.

Article 2: 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.

NCAV stocks, or Net-Net stocks as you refer to them, are simply the most well-known of Graham's strategies, and the source of the general misconception that Graham only recommended cheap stocks. But Graham actually recommended Index, Defensive and Enterprising stocks before NCAV stocks and all were allowed higher Quantitative valuations and required greater Qualitative checks.

Graham did advocate paying more for Quality. His only prerequisite was that there be the Margin of Safety between price and value, whether the value be Qualitative or Quantitative.

Article 1: http://seekingalpha.co... discusses all of Graham's investment strategies in detail.

The last of the strategies is "Special Situations". But Graham did not recommend it for the ordinary investor as it supposedly required a high degree of skill, experience and resources. But Buffett (being Buffett) has the skill, experience and resources; and almost all his operations do fall in Graham's "Special Situations" category.

Given below is part of the conclusion from the study "The Evolution of the Idea of Value Investing: From Benjamin Graham to Warren Buffett" by Robert F. Bierig, Duke University:

"A [casual] observer of Buffett today would find it difficult to see the Ben Graham influence in many of his activities. However, that influence remains at the core of Buffett’s investment model. Buffett continues to think about stocks as fractional ownership interests in underlying businesses, he continues to operate under the assumption that there is a distinction between price and value, and he continues to search for the largest discrepancy between those two items. In other words, he continues to be a value investor."

Also, in the "Legacy of Benjamin Graham" video released by the Heilbrunn Center, Buffett explains how Graham was focussed on refining methods that ordinary investors - without specialized access - could apply to achieve results similar to his own (Grahams's).

All of Graham's students follow the same principles, they just apply them in their own ways. Buffett is simply the most visible of them because he's the wealthiest. But the difference between Graham and Buffett is only one of application, not principle.

On a side note:

Intrinsic Value = Earnings x (8.5 + 2 x growth)

This is a formula often attributed to Graham. But 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 recent editions of The Intelligent Investor.

Article 2: http://seekingalpha.co... discusses the issue in detail.

Hope this helps!]]>

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

NCAV stocks, or Net-Net stocks as you refer to them, are simply the most well-known of Graham's strategies, and the source of the general misconception that Graham only recommended cheap stocks. But Graham actually recommended Index, Defensive and Enterprising stocks before NCAV stocks and all were allowed higher Quantitative valuations and required greater Qualitative checks.

Graham did advocate paying more for Quality. His only prerequisite was that there be the Margin of Safety between price and value, whether the value be Qualitative or Quantitative.

Article 1: http://seekingalpha.co... discusses all of Graham's investment strategies in detail.

The last of the strategies is "Special Situations". But Graham did not recommend it for the ordinary investor as it supposedly required a high degree of skill, experience and resources. But Buffett (being Buffett) has the skill, experience and resources; and almost all his operations do fall in Graham's "Special Situations" category.

Given below is part of the conclusion from the study "The Evolution of the Idea of Value Investing: From Benjamin Graham to Warren Buffett" by Robert F. Bierig, Duke University:

"A [casual] observer of Buffett today would find it difficult to see the Ben Graham influence in many of his activities. However, that influence remains at the core of Buffett’s investment model. Buffett continues to think about stocks as fractional ownership interests in underlying businesses, he continues to operate under the assumption that there is a distinction between price and value, and he continues to search for the largest discrepancy between those two items. In other words, he continues to be a value investor."

Also, in the "Legacy of Benjamin Graham" video released by the Heilbrunn Center, Buffett explains how Graham was focussed on refining methods that ordinary investors - without specialized access - could apply to achieve results similar to his own (Grahams's).

All of Graham's students follow the same principles, they just apply them in their own ways. Buffett is simply the most visible of them because he's the wealthiest. But the difference between Graham and Buffett is only one of application, not principle.

On a side note:

Intrinsic Value = Earnings x (8.5 + 2 x growth)

This is a formula often attributed to Graham. But 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 recent editions of The Intelligent Investor.

Article 2: http://seekingalpha.co... discusses the issue in detail.

Hope this helps!]]>

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!]]>

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!]]>

If these valuations are 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 recent editions of The Intelligent Investor.

Article 1: 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 TJX Companies Inc (NYSE:TJX).

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/Price: 137%.

TJX Companies Inc - Defensive Graham Ratings

Sales | Size (100% ⇒ $500 Million): 5,484.00%

Current Assets ÷ [2 x Current Liabilities]: 86.25%

Net Current Assets ÷ Long Term Debt: 200.14%

Earnings Stability (100% ⇒ 10 Years): 100.00%

Dividend Record (100% ⇒ 20 Years): 85.00%

Earnings Growth (100% ⇒ 30% Growth): 266.67%

Graham Number ÷ Current Price: 36.08%

The Final Graham Assessment for TJX Companies Inc is also given below.

The Quantitative Result for a stock has to be 100% for true Graham investment (Quantitative Result = Graham Price ÷ Previous Close).

TJX Companies Inc - Final Graham Assessment

Defensive Price (Graham Number): $19.24

Enterprising Price (Serenity Number): $14.05

NCAV Price: $0.14

Qualitative Result: Good / Enterprising

Graham Price: $14.05

Previous Close: $53.34

Quantitative Result: 26.34%

Article 2: http://seekingalpha.co... discusses Graham's actual 17 stock selection criteria and shows how to apply them to 5000 NYSE & NASDAQ stocks today, with adjustments for inflation.]]>

If these valuations are 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 recent editions of The Intelligent Investor.

Article 1: 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 TJX Companies Inc (NYSE:TJX).

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/Price: 137%.

TJX Companies Inc - Defensive Graham Ratings

Sales | Size (100% ⇒ $500 Million): 5,484.00%

Current Assets ÷ [2 x Current Liabilities]: 86.25%

Net Current Assets ÷ Long Term Debt: 200.14%

Earnings Stability (100% ⇒ 10 Years): 100.00%

Dividend Record (100% ⇒ 20 Years): 85.00%

Earnings Growth (100% ⇒ 30% Growth): 266.67%

Graham Number ÷ Current Price: 36.08%

The Final Graham Assessment for TJX Companies Inc is also given below.

The Quantitative Result for a stock has to be 100% for true Graham investment (Quantitative Result = Graham Price ÷ Previous Close).

TJX Companies Inc - Final Graham Assessment

Defensive Price (Graham Number): $19.24

Enterprising Price (Serenity Number): $14.05

NCAV Price: $0.14

Qualitative Result: Good / Enterprising

Graham Price: $14.05

Previous Close: $53.34

Quantitative Result: 26.34%

Article 2: http://seekingalpha.co... discusses Graham's actual 17 stock selection criteria and shows how to apply them to 5000 NYSE & NASDAQ stocks today, with adjustments for inflation.]]>

Thank you for explaining and nice effort! But casual readers sometimes end up using this completely unreliable formula that Graham warned against, instead of the slightly more difficult methods that he actually recommended.

So it would be good for readers to have the above articles as a reference, to know what Graham actually did and did not recommend.

Best wishes.]]>

Thank you for explaining and nice effort! But casual readers sometimes end up using this completely unreliable formula that Graham warned against, instead of the slightly more difficult methods that he actually recommended.

So it would be good for readers to have the above articles as a reference, to know what Graham actually did and did not recommend.

Best wishes.]]>

Benjamin 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 recent editions of The Intelligent Investor.

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

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 Suncor Energy Inc (NYSE:SU).

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/Price: 137%.

Suncor Energy Inc - Defensive Graham Ratings

Sales | Size (100% ⇒ $500 Million): 8,060.00%

Current Assets ÷ [2 x Current Liabilities]: 69.27%

Net Current Assets ÷ Long Term Debt: 40.07%

Earnings Stability (100% ⇒ 10 Years): 100.00%

Dividend Record (100% ⇒ 20 Years): 100.00%

Earnings Growth (100% ⇒ 30% Growth): 85.45%

Graham Number ÷ Current Price: 100.00%

Article 2: http://seekingalpha.co... discusses Graham's actual 17 stock selection criteria and shows how to apply them to 5000 NYSE & NASDAQ stocks today.]]>

Benjamin 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 recent editions of The Intelligent Investor.

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

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 Suncor Energy Inc (NYSE:SU).

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/Price: 137%.

Suncor Energy Inc - Defensive Graham Ratings

Sales | Size (100% ⇒ $500 Million): 8,060.00%

Current Assets ÷ [2 x Current Liabilities]: 69.27%

Net Current Assets ÷ Long Term Debt: 40.07%

Earnings Stability (100% ⇒ 10 Years): 100.00%

Dividend Record (100% ⇒ 20 Years): 100.00%

Earnings Growth (100% ⇒ 30% Growth): 85.45%

Graham Number ÷ Current Price: 100.00%

Article 2: http://seekingalpha.co... discusses Graham's actual 17 stock selection criteria and shows how to apply them to 5000 NYSE & NASDAQ stocks today.]]>

By Warren E. Buffett

"there has developed the general notion that the rate of return which the investor should aim for is more or less proportionate to the degree of risk he is ready to run. Our view is different. The rate of return sought should be dependent, rather, on the amount of intelligent effort the investor is willing and able to bring to bear on his task"

- Benjamin Graham, The Intelligent Investor

Investing successfully doesn't require a genius level IQ, Hardog.

But it does require a little effort, which will prove more than worthwhile.]]>

By Warren E. Buffett

"there has developed the general notion that the rate of return which the investor should aim for is more or less proportionate to the degree of risk he is ready to run. Our view is different. The rate of return sought should be dependent, rather, on the amount of intelligent effort the investor is willing and able to bring to bear on his task"

- Benjamin Graham, The Intelligent Investor

Investing successfully doesn't require a genius level IQ, Hardog.

But it does require a little effort, which will prove more than worthwhile.]]>

In all, Graham 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 Hershey and Sherwin-Williams.

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%.

The Hershey Company (NYSE:HSY) - Defensive Graham Ratings

Sales | Size: 1,430.00%

Current Assets ÷ Current Liabilities: 88.33%

Current Assets ÷ Long Term Debt: 60.12%

Earnings Stability: 100.00%

Dividend Record: 100.00%

Earnings Growth: 111.05%

Graham Number ÷ Current Price: 19.44%

The Sherwin-Williams Company (NYSE:SHW) - Defensive Graham Ratings

Sales | Size: 2,038.00%

Current Assets ÷ Current Liabilities: 62.46%

Current Assets ÷ Long Term Debt: 56.14%

Earnings Stability: 100.00%

Dividend Record: 100.00%

Earnings Growth: 133.04%

Graham Number ÷ Current Price: 10.46%

http://seekingalpha.co... discusses Graham's actual 17 stock selection criteria and shows how to apply them to 5000 NYSE & NASDAQ stocks today.]]>

In all, Graham 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 Hershey and Sherwin-Williams.

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%.

The Hershey Company (NYSE:HSY) - Defensive Graham Ratings

Sales | Size: 1,430.00%

Current Assets ÷ Current Liabilities: 88.33%

Current Assets ÷ Long Term Debt: 60.12%

Earnings Stability: 100.00%

Dividend Record: 100.00%

Earnings Growth: 111.05%

Graham Number ÷ Current Price: 19.44%

The Sherwin-Williams Company (NYSE:SHW) - Defensive Graham Ratings

Sales | Size: 2,038.00%

Current Assets ÷ Current Liabilities: 62.46%

Current Assets ÷ Long Term Debt: 56.14%

Earnings Stability: 100.00%

Dividend Record: 100.00%

Earnings Growth: 133.04%

Graham Number ÷ Current Price: 10.46%

http://seekingalpha.co... discusses Graham's actual 17 stock selection criteria and shows how to apply them to 5000 NYSE & NASDAQ stocks today.]]>

If these valuations are based on the above formula as the article 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 recent editions of The Intelligent Investor.

Article 1: 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 Apollo Education Group Inc (NASDAQ:APOL)

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%.

Apollo Education Group Inc - Defensive Graham Ratings

Sales | Size: 736.00%

Current Assets ÷ Current Liabilities: 68.45%

Current Assets ÷ Long Term Debt: 905.31%

Earnings Stability: 100.00%

Dividend Record: 0.00%

Earnings Growth: 98.11%

Graham Number ÷ Current Price: 65.66%

The Final Graham Assessment for Apollo Education Group Inc is also given below.

The Quantitative Result for a stock has to be 100% for true Graham investment (Quantitative Result = Graham Price ÷ Previous Close).

Apollo Education Group Inc - Final Graham Assessment

Defensive Price (Graham Number): $18.19

Enterprising Price (Serenity Number): $13.28

NCAV Price: $2.38

Qualitative Result: OK / NCAV

Graham Price: $2.38

Previous Close: $27.70

Quantitative Result: 8.59%

Article 2: http://seekingalpha.co... discusses Graham's actual 17 stock selection criteria and shows how to apply them to 5000 NYSE & NASDAQ stocks today.]]>

If these valuations are based on the above formula as the article 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 recent editions of The Intelligent Investor.

Article 1: 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 Apollo Education Group Inc (NASDAQ:APOL)

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%.

Apollo Education Group Inc - Defensive Graham Ratings

Sales | Size: 736.00%

Current Assets ÷ Current Liabilities: 68.45%

Current Assets ÷ Long Term Debt: 905.31%

Earnings Stability: 100.00%

Dividend Record: 0.00%

Earnings Growth: 98.11%

Graham Number ÷ Current Price: 65.66%

The Final Graham Assessment for Apollo Education Group Inc is also given below.

The Quantitative Result for a stock has to be 100% for true Graham investment (Quantitative Result = Graham Price ÷ Previous Close).

Apollo Education Group Inc - Final Graham Assessment

Defensive Price (Graham Number): $18.19

Enterprising Price (Serenity Number): $13.28

NCAV Price: $2.38

Qualitative Result: OK / NCAV

Graham Price: $2.38

Previous Close: $27.70

Quantitative Result: 8.59%

Article 2: http://seekingalpha.co... discusses Graham's actual 17 stock selection criteria and shows how to apply them to 5000 NYSE & NASDAQ stocks today.]]>

If these valuations are 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 recent editions of The Intelligent Investor.

Article 1: 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 KLA-Tencor Corp (NASDAQ:KLAC)

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%.

KLA-Tencor Corp - Defensive Graham Ratings

Sales | Size: 568.00%

Current Assets / Current Liabilities: 252.55%

Current Assets / Long Term Debt: 466.95%

Earnings Stability: 40.00%

Dividend Record: 45.00%

Earnings Growth: 170.82%

Graham Number / Current Price: 53.62%

The Final Graham Assessment for KLA-Tencor 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).

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: $71.89

Quantitative Result: 21.41%

Article 2: http://seekingalpha.co... discusses Graham's actual 17 stock selection criteria and shows how to apply them to 5000 NYSE & NASDAQ stocks today, with adjustments for inflation.]]>

If these valuations are 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 recent editions of The Intelligent Investor.

Article 1: 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 KLA-Tencor Corp (NASDAQ:KLAC)

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%.

KLA-Tencor Corp - Defensive Graham Ratings

Sales | Size: 568.00%

Current Assets / Current Liabilities: 252.55%

Current Assets / Long Term Debt: 466.95%

Earnings Stability: 40.00%

Dividend Record: 45.00%

Earnings Growth: 170.82%

Graham Number / Current Price: 53.62%

The Final Graham Assessment for KLA-Tencor 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).

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: $71.89

Quantitative Result: 21.41%

Article 2: http://seekingalpha.co... discusses Graham's actual 17 stock selection criteria and shows how to apply them to 5000 NYSE & NASDAQ stocks today, with adjustments for inflation.]]>

Stocks meeting Graham's criteria are inherently unpopular. The market can sometimes take as long as 3-5 years to recognize their true worth.

But over sustained periods of time, Graham's investment strategies tend to consistently outperform all others.]]>

Stocks meeting Graham's criteria are inherently unpopular. The market can sometimes take as long as 3-5 years to recognize their true worth.

But over sustained periods of time, Graham's investment strategies tend to consistently outperform all others.]]>

Interestingly, of the 5000 NYSE and NASDAQ stocks analyzed automatically every day on Serenity, Universal Corporation (NYSE:UVV) is the only one that clears every single one the Defensive criteria - Graham's toughest criteria - completely.

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

http://seekingalpha.co... discusses all of Graham's 17 stock selection criteria, and shows how to apply them to 5000 NYSE & NASDAQ stocks today.]]>

Interestingly, of the 5000 NYSE and NASDAQ stocks analyzed automatically every day on Serenity, Universal Corporation (NYSE:UVV) is the only one that clears every single one the Defensive criteria - Graham's toughest criteria - completely.

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

http://seekingalpha.co... discusses all of Graham's 17 stock selection criteria, and shows how to apply them to 5000 NYSE & NASDAQ stocks today.]]>

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

And interestingly, of the 5000 NYSE and NASDAQ stocks analyzed automatically everyday on Serenity, Universal Corporation (NYSE:UVV) is the only one that clears every single one the Defensive criteria - Graham's toughest criteria - completely.

http://seekingalpha.co... discusses all of Graham's 17 stock selection criteria, and shows how to apply them to 5000 NYSE & NASDAQ stocks today.]]>

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

And interestingly, of the 5000 NYSE and NASDAQ stocks analyzed automatically everyday on Serenity, Universal Corporation (NYSE:UVV) is the only one that clears every single one the Defensive criteria - Graham's toughest criteria - completely.

http://seekingalpha.co... discusses all of Graham's 17 stock selection criteria, and shows how to apply them to 5000 NYSE & NASDAQ stocks today.]]>

Even though it's mentioned on your profile, it should perhaps be noted here for the benefit of casual readers that you run "Old School Value"; a valuation tool that uses this formula to analyze stocks.]]>

Even though it's mentioned on your profile, it should perhaps be noted here for the benefit of casual readers that you run "Old School Value"; a valuation tool that uses this formula to analyze stocks.]]>

Absolutely, frrizzo380.]]>

Absolutely, frrizzo380.]]>

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.]]>

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.]]>

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.]]>

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.]]>

In the preface to The Intelligent Investor, Warren Buffett writes:

"I read the first edition of this book early in 1950, when I was nineteen. I thought then that it was by far the best book about investing ever written. I still think it is."

and a little later, Buffett specifically mentions:

"If you follow the behavioral and business principles that Graham advocates—and if you pay special attention to the invaluable advice in Chapters 8 and 20—you will not get a poor result from your investments. (That represents more of an accomplishment than you might think.)"

Graham himself writes in the said chapter (Chapter 20: "Margin of Safety" as the Central Concept of Investment) that:

"In the old legend the wise men finally boiled down the history of mortal affairs into the single phrase, “This too will pass.” Confronted with a like challenge to distill the secret of sound investment into three words, we venture the motto - Margin of Safety."

So if one were to recommend a single page from a single book, the first page of Chapter 20 of The Intelligent Investor might perhaps have been a better choice.

The page contains counsel specifically recommended by both Buffett and Graham.

Also, the third type of Stock recommended by Graham in The Intelligent Investor is the Net Current Asset Value stock or NCAV stock (the first two types being Defensive and Enterprising stocks).

http://seekingalpha.co... discusses how to buy and sell all three types of Graham stocks today, from 5000 NYSE & NASDAQ stocks.]]>

In the preface to The Intelligent Investor, Warren Buffett writes:

"I read the first edition of this book early in 1950, when I was nineteen. I thought then that it was by far the best book about investing ever written. I still think it is."

and a little later, Buffett specifically mentions:

"If you follow the behavioral and business principles that Graham advocates—and if you pay special attention to the invaluable advice in Chapters 8 and 20—you will not get a poor result from your investments. (That represents more of an accomplishment than you might think.)"

Graham himself writes in the said chapter (Chapter 20: "Margin of Safety" as the Central Concept of Investment) that:

"In the old legend the wise men finally boiled down the history of mortal affairs into the single phrase, “This too will pass.” Confronted with a like challenge to distill the secret of sound investment into three words, we venture the motto - Margin of Safety."

So if one were to recommend a single page from a single book, the first page of Chapter 20 of The Intelligent Investor might perhaps have been a better choice.

The page contains counsel specifically recommended by both Buffett and Graham.

Also, the third type of Stock recommended by Graham in The Intelligent Investor is the Net Current Asset Value stock or NCAV stock (the first two types being Defensive and Enterprising stocks).

http://seekingalpha.co... discusses how to buy and sell all three types of Graham stocks today, from 5000 NYSE & NASDAQ stocks.]]>

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.]]>

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.]]>