All of the questions below pertain to building a Defensive Investor stock portfolio:
1) Do you use intangible or tangible book value for calculating the graham number? Also do you use 1 year or 3 years of past earnings?
2) I am using 1.71% for current bond yield based on vanguard AA corporate 10 year bond yield, so that makes the threshold 50% I believe compared to 70%. Does that sound right to you?
3) What is wrong with LEN current assets, I believe it clears when I calculate it in my excel but not in serenity stocks for defensive grade?
4) How do you factor in the requirement for pe over 25 for the past 7 years?
5) Why isn't the stability index used when calculating earnings stability?
6) why do you use 15 instead of 13.3 in the formula?
7) what do you think about the fact the BG says there will be hundreds of securities to choose from that meet this criteria for defensive but in today's world (in USA) there are only 5 industrials and 26 financials (a bit more if we use 50% instead of 70% but not more than 30 industrials when current interest rate is taken into account)?
8) It says 26 financials and utilities clear but I don’t see any utilities and financials above 70% , only the 5 industrials?
9) Where does it say that the financials need to have the last 2 criteria exceeding for financials? I see in the book where the requirement exists for utilities but I don’t see that requirement for financials.
10) Does a good defensive stock just need to be over 70% (or 50% if we adjust per question 2) or should there be an additional margin of safety (eg value should be 80%), so that you make your gain when it "reverts to the mean" or intrinsic value at 70%?