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Realist

This explains why you have difficulty with the concept of an undervaluation

This is Grahams formula utilized for dividend paying stocks, which tend, due to the dividend, if believed to be sustainable [viz. not open to any chance of reduction] to place a floor under the shareprice.

However, in this formula Graham is identifying Wall St's valuation technique of selecting a capitalization rate that reflects future or expected earnings

Graham himself did not value common stocks in this manner.
He also recommends it for Industrials & Rails, not Miners, Utilities etc.
You have read the words, but missed their meaning.

jog on
d998

[QUOTE="ducati916, post: 67712, member: 2975"] [B]Realist[/B] This explains why you have difficulty with the concept of an [B]undervaluation[/B] This is Grahams formula utilized for dividend paying stocks, which tend, due to the dividend, if believed to be sustainable [viz. not open to any chance of reduction] to place a floor under the shareprice. However, in this formula Graham is identifying Wall St's valuation technique of selecting a [B]capitalization rate that reflects future or expected earnings[/B] Graham himself did not value common stocks in this manner. He also recommends it for Industrials & Rails, not Miners, Utilities etc. You have read the words, but missed their meaning. jog on d998 [/QUOTE]

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