Screening for Graham's "Finely Tuned Portfolio"

In a speech that he made in 1973, Graham outlined an adaptation of some of his earlier investment practices to modern markets. Such a strategy depends on being able to find extremely inexpensive issues; an approach that has become increasingly difficult since the end of WW2. Portfolio Management Rules: (1) build a portfolio of approximately 30 issues of stocks chosen at random from stocks that meet the standards below, (2) set a target profit for each issue of 50% above cost, to be attained within 2 years, (3) all issues that do not appreciate at least 50% in 2 years should be sold at their market price at the end of 2 years. Standards: (1) an attractive P/E ration (or Earnings-to-Price Ratio – the opposite of P/E) of twice the last 12 months yield on Moody’s AAA bonds, but never less than 10, (2) an attractive dividend yield (3%-6% in most markets), (3) a price below book value (if you can find them those stocks at about two-thirds of book is preferred), (4) a price well below the previous high (perhaps one-half the market high of the last 2 years, (5) an attractive price in relation to past earnings growth (a P/E lower than the 7 to 10 year average P/E).

Does Serenity have any plans to add this screener in the future.

Thank you

Stocks Discussed: 
Cullman Bancorp Inc. (CULL)

Dear BobT,

Thank you for your forum post!

Most of those points should have already been covered in the following links.

  1. Security Analysis To The Intelligent Investor - A Paradigm Shift
  2. Benjamin Graham's Notes on Selling For Value Investors
  3. Benjamin Graham's Two-Thirds NCAV (Net-Net) Strategy
  4. Adjusting Benjamin Graham's Price Calculations Today

For the reasons described above — especially in links #1 and #2 — Serenity strictly follows Graham's stock selection rules as given in The Intelligent Investor.

Thank you again for your forum post!

Graham Resources