Benjamin Method

DEFINITION of 'Benjamin Method'

The investment approach that aims to follow the strategies implemented by Benjamin Graham. The Benjamin Method of investing is based on fundamental principals of value investing, which is the process of discovering undervalued stocks. Benjamin Graham, the founder of value investing, was primarily concerned with minimizing losses rather than maximizing profits.

BREAKING DOWN 'Benjamin Method'

The Benjamin Method focuses on such metrics as the P/E ratio, which enables investors to determine how expensive the earnings of a company are relative to its competitors. However, rather than simply relying on static metrics, a full picture can only be determined by examining the quality of the earnings, as well as other corporate performance measures.

RELATED TERMS
  1. Graham Number

    A figure that measures a stock's fundamental value by taking ...
  2. Mr. Market

    An imaginary investor devised by Benjamin Graham and introduced ...
  3. Benjamin Graham

    A scholar and financial analyst who is widely recognized as the ...
  4. Net Current Asset Value Per Share ...

    A value created by professor Benjamin Graham in the mid-twentieth ...
  5. Investment Philosophy

    A set of guiding principles that inform and shape an individual's ...
  6. Net-Net

    A value investing technique in which a company is valued solely ...
Related Articles
  1. Insights

    3 Differences Between Benjamin Graham and Warren Buffett

    Analyze three key differences between Warren Buffett and Benjamin Graham. Learn how value investing principles were applied differently by each investor.
  2. ETFs & Mutual Funds

    The 3 Most Timeless Investment Principles

    Benjamin Graham pioneered cutting edge concepts that propelled other top investors to fame.
  3. Managing Wealth

    The Intelligent Investor: Benjamin Graham

    Learn about the man who mentored Warren Buffett, who eventually became the investing "Oracle of Omaha".
  4. Markets

    Ben Graham's Advice on Reading Financial Statements

    Seven pieces of advice from Benjamin Graham on understanding financial statements.
  5. Markets

    How to Invest Your Excess Cash in Undervalued Securities

    Learn how even small investors can shoot for substantial capital gains by starting to invest their excess cash in undervalued securities.
  6. Investing

    5 Great Investors Who Aren't Warren Buffett

    Here are five other investors, not named Warren Buffett, that are also considered to be the best of the best in the industry.
  7. Trading

    Top 5 All-Time Best Mutual Fund Managers

    The best managers produced long-term, market-beating returns and helped investors build big nest eggs. Find out who made the cut.
  8. Investing

    Top 10 Must-Read Books for Finance Professionals

    Interested in the financial world? Here are some books that provide keen insight into its history and how it works.
  9. Trading

    Take On Risk With A Margin of Safety

    More common risk theories can lead to missed opportunities. Find out how margin of safety can propel your portfolio.
  10. Investing

    Value Investing: 5 Tips to Consider in 2016

    Read five tips for value investors to consider in 2016, including how to look beyond traditional metrics and when to expand outside of the value zone.
RELATED FAQS
  1. How did Warren Buffett's investing style conflict with Benjamin Graham's theories ...

    Find out how Warren Buffett's value investing style contrasts with that of his mentor, Benjamin Graham, by relying on quality ... Read Answer >>
  2. Are university courses mandatory for being good at stocks?

    I am just a beginner and I am planning to major in computer science at university. But I also want to study stock exchange ... Read Answer >>
  3. What are Warren Buffett's favorite business / finance books, and why?

    Read the books that taught master investor Warren Buffet everything he knows about the market, stocks, security analysis ... Read Answer >>
  4. Is the banking sector a good choice for value investing?

    Find out why the banking sector is attractive to value investors, who typically look to buy discounted stocks during times ... Read Answer >>
  5. Why would a value investor be drawn to the financial services sector?

    Understand the nature of businesses in the financial services sector, and learn why they are appealing investments for value ... Read Answer >>
  6. What is the average annual dividend yield of companies in the insurance sector?

    Discover why value investors purchase electronics stocks, which are highly sensitive to the business cycle, creating extremes ... Read Answer >>
Hot Definitions
  1. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  2. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  3. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  4. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  5. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
  6. Russell 3000 Index

    A market capitalization weighted equity index maintained by the Russell Investment Group that seeks to be a benchmark of ...
Trading Center