Net-Net
Contents
Deciphering Net-Net: Benjamin Graham's Value Investing Technique
Unveiling Net-Net: A Comprehensive Guide
Explore the nuances of net-net, a value investing strategy pioneered by Benjamin Graham, and understand its implications for investors. Learn how net-net investing operates, its historical significance, and potential pitfalls.
Key Insights into Net-Net
- Net-net investing evaluates a company's stock based on its net current assets per share (NCAVPS).
- This approach focuses solely on current assets and liabilities, disregarding long-term assets and liabilities.
- Despite its short-term benefits, net-net investing has limitations and may not be suitable for long-term investments.
Delving into Net-Net Investing
Discover how Benjamin Graham developed the net-net strategy to identify undervalued stocks based on their current asset value. Learn how advances in financial data collection have influenced the application of net-net investing in modern markets.
Understanding the Formula
Gain insights into the calculation of net current asset value per share (NCAVPS) and its significance in determining investment opportunities. Explore Graham's criteria for selecting stocks and the potential returns associated with net-net investing.
Special Considerations
Learn about the components of current assets used in net-net analysis and how they reflect a company's true value. Understand the exclusion of long-term assets and liabilities from net-net calculations and its implications for investors.
Critiques of Net-Net
Examine the criticisms surrounding net-net investing, including its reliance on short-term indicators and potential risks associated with incompetent management and flawed business models. Explore real-world examples highlighting the limitations of net-net stocks in the long term.