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Forecasting future events is not a theme of Graham’s methodology.
Risk can be minimized by focusing on investment standards of quality and
price.
15. Chapter 15 - Stock Selection for the Enterprising
Investor
Key Attributes for stock selection:
· Current Assets > 150% of Current
Liabilities
· Must pay a dividend .
· Earnings growth .
· *Total Debt ≤ 110% of Net Current
Assets . Debt must not exceed net
current assets, where “net current assets” refers to current assets minus current liabilities.
· *Positive earnings in each of the last five
years . H
· *Price . - Companies priced at “Less than 120% of net
tangible assets.
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