Monday, April 18, 2011

Backtesting Ben Graham

From the Σmpirical Finance blog:
Charles Mizrahi, over at, suggested we backtest a simple Ben Graham strategy mentioned in a 1976 article he dug up in Medical Economics. Charles has been implementing Ben Graham related strategies for many years and the live performance of his recommendations are monitored by the Hulbert Financial Digest, which helps investors sift between the “good”, “bad”, and “ugly” of the newsletter world. His newsletter, “Inevitable Wealth Portfolio” is top-notch and worth a look for dedicated deep value investors.

Here is a link to the modern day version of the Medical Economics magazine where Ben Graham mentions how to implement his simple strategy.

So what’s Graham’s secret to achieve 15%+ returns over long horizons?
Well, below is an excerpt from the original 1976 article with all important points highlighted...MUCH MORE