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Benjamin Graham - Quality Dimension of Value Investing


JEast
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The Graham investing style over the years has tended to be highjacked into meaning severely depressed stocks or 'net-net' investing alone.  I too am guilty of this highjacking in the language I use such as '50¢ dollar' or 'really cheap stock' and leave out some of the quality facets of why I include a stock into a portfolio. 

 

The fact is that in most of Graham's writings he actually espoused more quality aspects to investing more so then price as a singular criteria.  In Chapter 13 of the Intelligent Investor, Graham defines seven (7) criteria for inclusion of a stock into a portfolio of which five could be be considered quality aspects and only two are price criteria.

 

Attached is nice research paper by Robert Novy-Marx comparing Graham price investing to Graham quality investing.  Also included in the report are comparisons of Greenblatt, BlackRock (Sloan), Grantham, and gross profitability styles of investing.

 

 

Cheers

JEast

The_Quality_Dimension_of_Value_Investing.pdf

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