Benjamin Graham Formula is called the father of value investing and in this tutorial i am going to tell how to invest like benjamin graham and born in 1896 in Europe.He graduated from Columbia and he is known for buying undervalued stocks and securities.Benjamin graham is the author of two best selling books called the security analysis and Intelligent Investor in 1934.
Benjamin graham is the guru of profound investors like warren buffet,peter lynch,Charlie
Munger,Philip Fischer,Walter Schloss,Peter Lynch,John Templeton,Mohnish Pabrai,Amit Ayare,
whitney Tilson,Prem Watsa.He is a specialist in net-net investments.He prefer stocks below
book values.when the stock reaches the book value he may sell the stock and buy the cheaper stock.
Benjamin graham formulae is:
V = EPS *(8.5+2g)
the formula was then again revised to
V = EPS *(8.5+2g)*4.4/Y in the year 1962
Some of the Quotes of Benjamin Graham are :
1) An earnings-to-price(reverse of the P/E RATIO) that is double the triple-A bond Yield.If the
triple-A bond yield is 8 persent,the required earnings yuild then will be 16 percent.
2)A price-to-earning ratio that is four-tenths of the highest average P/E ratio that the stock has achieved
in the most recent five years.(to get the average P/e ratio,an average stock price for that given year is divided by the earnings for the particular year)
3)A dividend yield of two-thirds the triple-A bond yield.Stocks paying no dividend or those that have no current profits from what to pay dividends are excluded.
4)A stock price that is two-thirds the tangible book value per share.This is calculated by adding up all the assets,excluding intangibles such as good will,patents etc
substracting all liabilities and dividing by the total number of shares.
5)A stock price that is two-thirds the net current asset value of the share.The net quick liquidation value is the current assets less total debt.This is ofcourse was the
foundation of ben's original theories.
6)Total debt that is less than tangible book value.
7)A current ratio of two or more.
8)Total debt at or less than the net quick liquidation value.
9)Earnings that have doubled in the most recent ten years.
This the way how to invest like benjamin graham.
Benjamin graham is the guru of profound investors like warren buffet,peter lynch,Charlie
Munger,Philip Fischer,Walter Schloss,Peter Lynch,John Templeton,Mohnish Pabrai,Amit Ayare,
whitney Tilson,Prem Watsa.He is a specialist in net-net investments.He prefer stocks below
book values.when the stock reaches the book value he may sell the stock and buy the cheaper stock.
Benjamin graham formulae is:
V = EPS *(8.5+2g)
the formula was then again revised to
V = EPS *(8.5+2g)*4.4/Y in the year 1962
Some of the Quotes of Benjamin Graham are :
1) An earnings-to-price(reverse of the P/E RATIO) that is double the triple-A bond Yield.If the
triple-A bond yield is 8 persent,the required earnings yuild then will be 16 percent.
2)A price-to-earning ratio that is four-tenths of the highest average P/E ratio that the stock has achieved
in the most recent five years.(to get the average P/e ratio,an average stock price for that given year is divided by the earnings for the particular year)
3)A dividend yield of two-thirds the triple-A bond yield.Stocks paying no dividend or those that have no current profits from what to pay dividends are excluded.
4)A stock price that is two-thirds the tangible book value per share.This is calculated by adding up all the assets,excluding intangibles such as good will,patents etc
substracting all liabilities and dividing by the total number of shares.
5)A stock price that is two-thirds the net current asset value of the share.The net quick liquidation value is the current assets less total debt.This is ofcourse was the
foundation of ben's original theories.
6)Total debt that is less than tangible book value.
7)A current ratio of two or more.
8)Total debt at or less than the net quick liquidation value.
9)Earnings that have doubled in the most recent ten years.
This the way how to invest like benjamin graham.
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