Benjamin Graham was a scholar and professional investor who mentored investing legends such as Warren Buffett, William J. Ruane, Irving Kahn and Walter J. Schloss.
Warren Buffett wrote the preface to Graham's book - The Intelligent Investor - in which he called it "by far the best book about investing ever written."
Graham's first recommended strategy - for novice investors - was to invest in the stocks comprising an Index.
For more serious investors, Graham recommended three different categories of stocks - Defensive, Enterprising and NCAV - and 17 qualitative and quantitative rules for identifying them.
For professional investors, Graham described various special situations or "workouts".
The first requires almost no analysis, and is easily accomplished today with a good S&P500 Index fund.
The last requires more than the average level of ability and experience. Such stocks are also not amenable to impartial algorithmic analysis, and require a case-specific approach.
But Defensive, Enterprising and NCAV stocks can be reliably detected by today's data-mining software, and offer a great avenue for accurate automated analysis and profitable investment.
Most of Buffett's investments are what Graham defined as Special Situations.
Warren Buffett once gave a talk at Columbia Business School describing how Graham's record of creating exceptional investors (such as Buffett himself) is unquestionable, and how Graham's principles are everlasting. The talk is now known as "The Superinvestors of Graham-and-Doddsville".
The ModernGraham website cites the following formula as one of the Graham methods applied:
Intrinsic Value = EPS x (8.5 + 2xGrowth)
Benjamin Graham actually gave several warnings with this formula and only used it to demonstrate that the market's growth rate expectations were never reliable. But due to an omission in recent editions of The Intelligent Investor, this formula is often mistakenly used today to value stocks instead of Graham's actual (and more thorough) methods.
Graham's first recommended strategy - for novice investors - was to invest in Index stocks.
For more serious investors, Graham recommended three different categories of stocks - Defensive, Enterprising and NCAV - and 17 qualitative and quantitative rules for identifying them.
For professional investors, Graham described various special situations or "workouts".
For example, given below are the actual Graham ratings for Helmerich & Payne Inc (HP), with no adjustments other than those for inflation.
Defensive Graham investment requires that all ratings (except Equity ÷ Debt) be 100% or more.
Enterprising Graham investment requires minimum ratings of - N/A, 75%, 90%, N/A, 50%, 5%, N/A and 137%.
Helmerich & Payne Inc (HP) - Defensive Graham Ratings
Sales | Size (100% ⇒ $500 Million): 776.00%
Current Assets ÷ [2 x Current Liabilities]: 125.69%
Net Current Assets ÷ Long Term Debt: 1,922.50%
Equity ÷ Debt (for Utilities and Financials): 267.12%
Earnings Stability (100% ⇒ 10 Years): 100.00%
Dividend Record (100% ⇒ 20 Years): 100.00%
Earnings Growth (100% ⇒ 30% Growth): 172.41%
Graham Number ÷ Previous Close: 129.46%
Note: Stocks failing Graham's rules are not necessarily bad investments. They may fall under Graham's "special situations" category. Graham's rules are also extremely selective.
The ModernGraham website cites the following formula as one of the Graham methods applied:
Intrinsic Value = EPS x (8.5 + 2xGrowth)
Benjamin Graham actually gave several warnings with this formula and only used it to demonstrate that the market's growth rate expectations were never reliable. But due to an omission in recent editions of The Intelligent Investor, this formula is often mistakenly used today to value stocks instead of Graham's actual (and more thorough) methods.
Benjamin Graham - also known as The Dean of Wall Street - was a scholar and financial analyst who mentored legendary investors such as Warren Buffett, William J. Ruane, Irving Kahn and Walter J. Schloss.
Warren Buffett wrote the preface for Graham's book - The Intelligent Investor - in which he calls it "by far the best book about investing ever written."
Graham's first recommended strategy - for novice investors - was to invest in Index stocks.
For more serious investors, Graham recommended three different categories of stocks - Defensive, Enterprising and NCAV - and 17 qualitative and quantitative rules for identifying them.
For professional investors, Graham described various special situations or "workouts".
Warren Buffett once gave a speech at Columbia Business School explaining how Graham's record of creating exceptional investors (such as Buffett himself) is unquestionable, and how Graham's principles are everlasting. The speech is now known as "The Superinvestors of Graham-and-Doddsville".
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15 Best Stocks For Value Investors This Week – 9/4/15
Benjamin Graham was a scholar and professional investor who mentored investing legends such as Warren Buffett, William J. Ruane, Irving Kahn and Walter J. Schloss.
Warren Buffett wrote the preface to Graham's book - The Intelligent Investor - in which he called it "by far the best book about investing ever written."
Graham's first recommended strategy - for novice investors - was to invest in the stocks comprising an Index.
For more serious investors, Graham recommended three different categories of stocks - Defensive, Enterprising and NCAV - and 17 qualitative and quantitative rules for identifying them.
For professional investors, Graham described various special situations or "workouts".
The first requires almost no analysis, and is easily accomplished today with a good S&P500 Index fund.
The last requires more than the average level of ability and experience. Such stocks are also not amenable to impartial algorithmic analysis, and require a case-specific approach.
But Defensive, Enterprising and NCAV stocks can be reliably detected by today's data-mining software, and offer a great avenue for accurate automated analysis and profitable investment.
Most of Buffett's investments are what Graham defined as Special Situations.
Warren Buffett once gave a talk at Columbia Business School describing how Graham's record of creating exceptional investors (such as Buffett himself) is unquestionable, and how Graham's principles are everlasting. The talk is now known as "The Superinvestors of Graham-and-Doddsville".
10 Companies Benjamin Graham Would Invest In Today – August 2015
The ModernGraham website cites the following formula as one of the Graham methods applied:
Intrinsic Value = EPS x (8.5 + 2xGrowth)
Benjamin Graham actually gave several warnings with this formula and only used it to demonstrate that the market's growth rate expectations were never reliable. But due to an omission in recent editions of The Intelligent Investor, this formula is often mistakenly used today to value stocks instead of Graham's actual (and more thorough) methods.
Graham's first recommended strategy - for novice investors - was to invest in Index stocks.
For more serious investors, Graham recommended three different categories of stocks - Defensive, Enterprising and NCAV - and 17 qualitative and quantitative rules for identifying them.
For professional investors, Graham described various special situations or "workouts".
For example, given below are the actual Graham ratings for Helmerich & Payne Inc (HP), with no adjustments other than those for inflation.
Defensive Graham investment requires that all ratings (except Equity ÷ Debt) be 100% or more.
Enterprising Graham investment requires minimum ratings of - N/A, 75%, 90%, N/A, 50%, 5%, N/A and 137%.
Helmerich & Payne Inc (HP) - Defensive Graham Ratings
Sales | Size (100% ⇒ $500 Million): 776.00%
Current Assets ÷ [2 x Current Liabilities]: 125.69%
Net Current Assets ÷ Long Term Debt: 1,922.50%
Equity ÷ Debt (for Utilities and Financials): 267.12%
Earnings Stability (100% ⇒ 10 Years): 100.00%
Dividend Record (100% ⇒ 20 Years): 100.00%
Earnings Growth (100% ⇒ 30% Growth): 172.41%
Graham Number ÷ Previous Close: 129.46%
Note: Stocks failing Graham's rules are not necessarily bad investments. They may fall under Graham's "special situations" category. Graham's rules are also extremely selective.
10 Companies Benjamin Graham Would Invest In Today – July 2015
The ModernGraham website cites the following formula as one of the Graham methods applied:
Intrinsic Value = EPS x (8.5 + 2xGrowth)
Benjamin Graham actually gave several warnings with this formula and only used it to demonstrate that the market's growth rate expectations were never reliable. But due to an omission in recent editions of The Intelligent Investor, this formula is often mistakenly used today to value stocks instead of Graham's actual (and more thorough) methods.
Benjamin Graham - also known as The Dean of Wall Street - was a scholar and financial analyst who mentored legendary investors such as Warren Buffett, William J. Ruane, Irving Kahn and Walter J. Schloss.
Warren Buffett wrote the preface for Graham's book - The Intelligent Investor - in which he calls it "by far the best book about investing ever written."
Graham's first recommended strategy - for novice investors - was to invest in Index stocks.
For more serious investors, Graham recommended three different categories of stocks - Defensive, Enterprising and NCAV - and 17 qualitative and quantitative rules for identifying them.
For professional investors, Graham described various special situations or "workouts".
Warren Buffett once gave a speech at Columbia Business School explaining how Graham's record of creating exceptional investors (such as Buffett himself) is unquestionable, and how Graham's principles are everlasting. The speech is now known as "The Superinvestors of Graham-and-Doddsville".