📖Benjamin Graham
Quantitative Screening
Use quantitative criteria to screen for value stocks.
We recommend selecting stocks using quantitative criteria: earnings-to-price yield, dividend record, balance sheet strength, and moderate price-to-earnings ratios.
🏠 Everyday Analogy
📖 Core Interpretation
In Quantitative Screening, Benjamin Graham focuses on the gap between price and value. Returns come from paying less than what a business is worth, not from guessing short-term market moves.
💎 Key Insight：Systematic screening removes emotional bias from stock selection.
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❓ Why It Matters
Ignoring valuation turns even good companies into poor investments. Overpaying compresses future returns and leaves little margin when assumptions are wrong.
🎯 How to Practice
Estimate intrinsic value with conservative assumptions, set clear buy ranges, and act only when price offers a meaningful discount with acceptable downside.
⚠️ Common Pitfalls
Confusing a low price with true cheapness
Using one metric without business context
Overly optimistic assumptions that erase margin of safety
📚 Case Studies
1
Textile and Steel Net-Net Bargains (1974)
During the 1973–74 bear market, several small U.S. textile and steel companies traded below their net current asset value, reflecting deep pessimism about traditional manufacturing.
✨ Outcome：Graham-style investors buying a diversified basket saw strong gains as prices rebounded with the late‑1970s recovery.
2
Post‑Crisis Micro‑Cap Net-Nets (2009)
After the 2008 financial crisis, many micro‑cap industrial and consumer firms traded below NCAV due to forced selling and credit fears, despite remaining solvent.
✨ Outcome：Investors applying Graham’s NCAV discipline achieved large returns over 3–5 years as liquidity normalized and valuations mean‑reverted.
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