The Benjamin Graham formula is a formula for the valuation of growth stocks.
It was proposed by investor and professor of Columbia University, Benjamin Graham - often referred to as the "father of value investing". [1] Published in his book, The Intelligent Investor, Graham devised the formula for lay investors to help them with valuing growth stocks, in vogue at the time of the formula's publication. [2]
Graham cautioned here that the formula was not appropriate for companies with a "below-par" debt position: "My advice to analysts would be to limit your appraisals to enterprises of investment quality, excluding from that category such as do not meet specific criteria of financial strength".[3]
- ^ Dave, John (2014). Benjamin Graham: The Father of Value Investing. CreateSpace Independent Publishing Platform). ISBN 978-1500653743.
- ^ Graham, Benjamin (2006). The Intelligent Investor: Revised Edition. First Collins Business Essentials. pp. 295, 297, 585. ISBN 0-06-055566-1.
- ^ Benjamin Graham (1974). "The Renaissance of Value", pg 4
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