You seem to me to be making two points:
1. Dr. Graham has several rules, and he's changed them with time.
2. Very few, if any, stocks meet his requirements now.
There seem to be four requirements: low pe, low p/k, low d/e, "good" history. We're also talking about his last 1976 interviews wherein he says one or a couple or a few metrics might be enough. I don't know of any source where he's said in his last interviews that all four of the metrics are required. Especially not anything about a good, long history. Which was so for 1973's Intelligent Investor (five years and no deficit), but not in his last interviews, afaik. (That requirement for the good history might be there, I just don't see such in the notes that I have about those later interviews.)
It would seem that if we are in the current situation of very very few or no qualifying stocks, then no stocks should or would be bought by Graham people.
But that leaves a conundrum. If somebody were investing through an IRA or otherwise had money to invest now and were following Dr. Graham, what about his teaching (requirement?) that investments should be made by categorical balancing of stocks and bonds. But if there are no stocks to be bought how can balancing be done? And if there are only a few stocks that meet requirements and they are all what Dr. Graham would characterize at 2nd Tier, isn't allocating money to just a few 2nd tiers overly risky?
My opinion is that Dr. Graham would loosen up or maybe eliminate one of more of the 3-4 screening metrics. I'm fairly sure he'd loosen up the debt requirement, but keep a lid on p/e though (which seems to me to have been his favorite metric). |
