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graham number

Posted on 7/12/15 at 5:01 pm
Posted by ragacamps
Member since Jan 2011
2997 posts
Posted on 7/12/15 at 5:01 pm
whats the MT opinion on the importance, if any, of this matrix??
Posted by Cmlsu5618
Destin, FL
Member since Sep 2010
3763 posts
Posted on 7/12/15 at 8:12 pm to
I forget the exact calculation..

But..

It's a good valuation metric. Dont believe any valuation metric is going to show you the next big winner just because its in a good range.

The market is rational on the long term, but irrationality rears its head in the short term some times.
Posted by ragacamps
Member since Jan 2011
2997 posts
Posted on 7/13/15 at 2:32 pm to
Thanks for the insight. Im just curious. Im a novice and I hear people touting it as very important. But then I see 3 dollar stocks with a 100 dollar graham number and wonder why everyone doesnt load up.
Posted by Cmlsu5618
Destin, FL
Member since Sep 2010
3763 posts
Posted on 7/14/15 at 9:16 am to
Look at Ford for example. Tell me the Graham number on it.

It's sat at a PE under 15 for a couple of years now if I'm not mistaken. Some of it justified, but there's strong arguments to be made for its long term outlook.

Edit: just as I type this I look it up and realize it's at a PE of around 18. Most of that is currency fluctuation just like other global corps.
This post was edited on 7/14/15 at 9:19 am
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