Benjamin Graham's 10 Rules for Stock Selection
Here's the list that Graham came up with. The idea behind the rules is that the first five measure "reward" (by pinpointing a low price in relation to key operating results like earnings) and the second five "risk" (by measuring financial soundness and stability of earnings).
1.An earnings-to-price yield at least twice the AAA bond rate
2.P/E ratio less than 40% of the highest P/E ratio the stock had over the past 5 years
3.Dividend yield of at least 2/3 the AAA bond yield
4.Stock price below 2/3 of tangible book value per share
5.Stock price below 2/3 of Net Current Asset Value
6.Total debt less than book value
7.Current ratio great than 2
8.Total debt less than 2 times Net Current Asset Value
9.Earnings growth of prior 10 years at least at a 7% annual compound rate
10.Stability of growth of earnings in that no more than 2 declines of 5% or more in year end earnings in the prior ten years are permissible.
谨记。
王府井(SH600859)