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Strategies & Market Trends : Value Investing
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To: E_K_S who wrote (37339)4/11/2010 8:18:52 PM
From: Jurgis Bekepuris  Read Replies (1) of 78711
 
The problem with Graham is that he has proposed a lot of different formulas. In a single edition of "Intelligent Investor" he has at least three different criteria sets for stock purchasing. And it is even worse if one goes across multiple editions of "Intelligent Investor" and "Security Analysis".

Now we are supposed to believe that in 1976 he had an Eureka moment and decided that one year PE < 10 + PE < inverted 2x AAA bond yield and D/E < 1 is enough. I'd say "no way" although I am sure Graham qualified the above with his customary: buy stocks only in established companies with a history of positive earnings and so on. I am not sure even with additional caveat that these criteria are good. IMHO, in normal market (March 2009 does not count :))), there will be very few companies satisfying Graham's criteria. Furthermore, most of them will be on the verge of earnings decline that market would assume to be terminal.

But, please suggest a list of companies currently satisfying the criteria and let's look at them. :)

P.S. Although <1 D/E already pretty much precludes financials, let's remember that Graham always excluded them into a separate category too. So please no banks, BDCs, insurance, MLPs, companies with finance subsidiaries, REITs and other exotics. :)
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