If these valuations are based on the above formula as the article says, Graham actually warned against this formula and only used it to show why such oversimplified growth formulas are unreliable. This formula is popular only due to a printing omission in recent editions of The Intelligent Investor.
Benjamin Graham actually recommended three different categories of stocks - Defensive, Enterprising and NCAV - with 17 different qualitative and quantitative criteria for finding them.
Article 2: http://seekingalpha.com/article/2260803 discusses Graham's actual 17 stock selection criteria and shows how to apply them to 5000 NYSE & NASDAQ stocks today.
Blog: Benjamin Graham's Growth Valuation - APOLLO (6432)
2014-08-08 13:02 | Report Abuse
Intrinsic Value = Earnings x (8.5 + 2 x growth)
If these valuations are based on the above formula as the article says, Graham actually warned against this formula and only used it to show why such oversimplified growth formulas are unreliable. This formula is popular only due to a printing omission in recent editions of The Intelligent Investor.
Article 1: http://seekingalpha.com/article/1709112 discusses the issue in detail.
Benjamin Graham actually recommended three different categories of stocks - Defensive, Enterprising and NCAV - with 17 different qualitative and quantitative criteria for finding them.
Article 2: http://seekingalpha.com/article/2260803 discusses Graham's actual 17 stock selection criteria and shows how to apply them to 5000 NYSE & NASDAQ stocks today.