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  • SerenityStocks commented on Brian Flores's article 04-22 15:24
    Li Lu Reflects on Getting Older
    As the chariman of Himalaya Capital Management, Li Lu has become famous for his disciplined and value-oriented approach to investing. He just turned...
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    SerenityStocks 04-22 16:24
    • Benjamin Graham was a scholar and professional investor who mentored renowned value investors such as Warren Buffett (Trades, Portfolio), William J. Ruane, Irving Kahn and Walter J. Schloss. 

      Warren Buffett (Trades, Portfolio) 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 known today as "The Superinvestors of Graham-and-Doddsville".

      Buffett also wrote the preface to Graham's book - The Intelligent Investor - and calls it "by far the best book about investing ever written." 

      Graham wrote:

      "to distill the secret of sound investment into three words, we venture the motto - Margin of Safety"

      Buffett expressed the same principle in a different way saying:

      "Rule No.1: Never lose money. Rule No.2: Never forget rule No.1."

      Graham's first recommended strategy - for novice investors - was to invest in the stocks comprising an Index. 

      For more serious investors, Graham recommended three categories of stocks - Defensive, Enterprising and NCAV - with 17 rules for Quality and Quantity.

      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.

      Defensive, Enterprising and NCAV stocks can be reliably detected by modern data-mining software, and offer a great avenue for profitable investment.

      Most of Buffett's investments are what Graham defined as Special Situations.

      Article: How To Build A Complete Benjamin Graham Portfolio has more details.
  • SerenityStocks commented on SerenityStocks's article 04-19 14:56
    A Complete Benjamin Graham Analysis for Facebook
    Benjamin Graham was an economist and professional investor who taught Warren Buffett, Irving Kahn, Walter J. Schloss and other famous investors at...
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    SerenityStocks 04-19 15:56
    • Glad to be of help, Carmella.laney!
  • SerenityStocks commented on Jae Jun's article 04-19 14:52
    Ignore These 7 Questions If You Want to Lose Money
    SunEdison (SUNE) is down 92% year-to-date. But what the heck happened? Isn’t clean energy the future? Why would “investors” continue throwing...
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    SerenityStocks 04-19 15:52
    • The oldschoolvalue website cites a variation of the following formula as one of the Graham methods used:

      Intrinsic Value = EPS x (8.5 + 2xGrowth)

      Benjamin Graham actually gave several warnings with this formula and actually used it to demonstrate that the market's growth rate expectations were never reliable. 

      Article: Understanding The Benjamin Graham Formula Correctly discusses the issue in detail.

      Given below is an analysis using Graham's full framework (adjusted for inflation).

      Defensive Graham investment requires that all ratings - except the last two - be 100% or more. 

      Enterprising Graham investment requires minimum ratings of - N/A, 75%, 90%, 50%, 5%, N/A, 137%, N/A and N/A. 

      NCAV / Net-Net(%) is part of Graham's famed "cigar-butt" strategy.

      SunEdison Inc (SUNE) - Graham Ratings

      Sales / Size (100% ⇒ $500 Million): 496.80%

      Current Assets ÷ [2 x Current Liabilities>: 44.32%

      Net Current Assets ÷ Long Term Debt: 0.00%

      Earnings Stability (100% ⇒ 10 Years): 0.00%

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

      Earnings Growth (100% ⇒ 33% Growth): 0.00%

      Graham Number(%): 0.00%

      Equity ÷ Debt (for Utilities and Financials): 2.07%

      NCAV / Net-Net(%): 0.00%

      Note: Stocks that don't clear Graham's 17-rule framework are not necessarily bad investments. They may fall under Graham's "Index Stocks" or "Special Situations" categories. Graham's rules are also extremely selective.

      Article: How To Build A Complete Benjamin Graham Portfolio has more details.
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