Value Investing - PowerPoint PPT Presentation

1 / 11
About This Presentation
Title:

Value Investing

Description:

Allocate growth and value stocks in your portfolio Using the Benjamin Graham approach Using the Warren Buffett approach Using the simplest and best approach Reducing ... – PowerPoint PPT presentation

Number of Views:190
Avg rating:3.0/5.0
Slides: 12
Provided by: Eliz91
Category:

less

Transcript and Presenter's Notes

Title: Value Investing


1
Value Investing
  • Roy Ward
  • Research Analyst,
  • Cabot Benjamin Graham Value Investor
  • roy_at_cabot.net

2
  • What is Value Investing?
  • Allocate growth and value stocks in your
    portfolio
  • Using the Benjamin Graham approach
  • Using the Warren Buffett approach
  • Using the simplest and best approach
  • Reducing risk
  • How to outperform the stock market indexes by a
    wide margin

3
What is Value Investing?
  • Three examples
  • Understand Different Approaches
  • Use All Three?

4
Portfolio Allocation
  • Diversify with value and growth stocks 50/50
  • Value portion should be high-quality,
    conservative stocks and medium risk stocks
  • Every portfolio should contain conservative core
    stocks for long-term holding
  • Diversify across various industry sectors
  • Invest equal dollar amounts in each company

5
Ben Graham Approach
  • 1. P/E less than 9.0
  • 2. P/BV less than 1.20
  • 3. Dividend greater than zer.
  • 4. Long Term Debt/Current Assets less than 1.10
  • 5. Current Assets/Current Liabilities greater
    than 1.50
  • 6. No Earnings Deficits last 5 Years
  • 7. SP Quality Rank B or higher
  • Results Medium risk stocks with 2 to 3 dividend
    yields, typically low growth or turn-around
    situations.
  • Corning (GLW), Prudential (PRU), Xerox (XRX)

6
Warren Buffett Approach
  • Estimate intrinsic value of company to determine
    optimum buy price and sell price
  • Invest in high-quality companies with strong
    balance sheets
  • Choose companies with steady earnings growth
    during the past decade
  • Favor companies paying dividends
  • Results Low risk stocks with 2 to 3 dividends,
    typically moderate growth.
  • Cognizant Technologies (CTSH), Qualcomm (QCOM),
    Tupperware (TUP)

7
Simplified Value Approach
  • 1. Use Standard Poors Ben Graham did!
  • 2. Find stocks with SP Stars Ratings of 4 or 5
  • 3. And SP Fair Value Ratings of 4 or 5
  • 4. SP Quality Ratings of A, A, or A-
    occasionally B
  • 5. Read about company outlook on company website
    and research reports
  • 6. Choose stocks from various industry sectors

8
Risk
  • 1. Reduce risk when the stock market is high
  • 2 Increase risk when the stock market is low
  • 3. Current risk level is 55 ultra-low risk
    stocks (in place of bonds) and 45 low-to-medium
    risk stocks
  • 4. Be more aggressive when you are young and less
    aggressive when you approach retirement

9
How to Beat the Market!
  • 1. Establish a system
  • 2. Write down the details of your system step by
    step
  • 3. Follow your system and stick with it through
    good times and bad times
  • 4. Have fun but keep in mind this is your
    hard-earned money that you are going to depend on
    when retired

10
Questions?
  • Thank you for your participation!
  • Now, lets go out and make lots of money!

11
(No Transcript)
Write a Comment
User Comments (0)
About PowerShow.com