Hey Ah Ben was the most famous investor at his time. His principles are invaluable, even for the present time. But ah I haven't read from any comments in i3investors using his principles, have you? Why not? After all this is a "i3investors" website.
my humble opinion. Ben is just an ordinary person like all of us, not god. Hence, his rules are for us as guidelines. Not "RULES" that investors MUST follow or adhere. If i'm right, I think they are many out there not agreeable to one or all 10 rules of Ben.
kcloh. if i m not mistaken, buffet use graham rules and find that cannot make money wor. hahaha. so he invented his own rules. in bolehland. only 1 rule is applicable. the Bursuk rule.
yeah, Buffett made changes when he met P Fisher and C Munger. in all fairness to Graham, he shaped his rules in the Post-Great Depression era. So a lot of counters were available to his criteria when he set them out!
How well do Ben Graham’s 10 rules work when it comes picking stocks?
Henry Oppenheimer: studied the portfolios obtained from these screens from 1974 to 1981 and concluded that you could have made an annual return well in excess of the market. Academics have tested individual screens – low PE ratios and high dividend yields to name two – in recent years and have found that they indeed yield portfolios that deliver higher returns. Mark Hulbert, who evaluates the performance of investment newsletters, found newsletters than espoused to follow Graham did much better than other newsletters. The only jarring note is that an attempt to use the 10 rules by a mutual fund that would deliver high returns did fail. In the 1970s, an investor name James Rea was convinced enough of the value of these screens that he founded a fund called the Rea-Graham fund, which would invest in stocks based upon the Graham screens. While it had some initial successes, the fund floundered during the 1980s and early 1990s and was ranked in the bottom quartile for performance. The best support for Graham’s views on value investing don’t come from academic studies or the Rea-Graham fund but from the success of many of his students at Columbia. While they chose diverse paths, many of them ended up managing money and posting records of extraordinary success.
The above study is quoted from an academic study by Prof Aswath Damodaran of Stern School of Business, New Yoke University.
i think i will compute an Excel that sum all this 10 rules, maybe 8 since there are some not applicable to us :) after that... i make my screening job easier...
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
kcchongnz
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Posted by kcchongnz > 2013-01-27 12:36 | Report Abuse
Hey Ah Ben was the most famous investor at his time. His principles are invaluable, even for the present time. But ah I haven't read from any comments in i3investors using his principles, have you? Why not? After all this is a "i3investors" website.