Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Courses
  • Tutoring
  • Home
  • Economics, Finance, & Analytics
  • Investments, Trading, and Financial Markets

Benjamin Method - Explained

What is the Benjamin Method?

Written by Jason Gordon

Updated at April 17th, 2022

Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Marketing, Advertising, Sales & PR
    Principles of Marketing Sales Advertising Public Relations SEO, Social Media, Direct Marketing
  • Accounting, Taxation, and Reporting
    Managerial & Financial Accounting & Reporting Business Taxation
  • Professionalism & Career Development
  • Law, Transactions, & Risk Management
    Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
  • Business Management & Operations
    Operations, Project, & Supply Chain Management Strategy, Entrepreneurship, & Innovation Business Ethics & Social Responsibility Global Business, International Law & Relations Business Communications & Negotiation Management, Leadership, & Organizational Behavior
  • Economics, Finance, & Analytics
    Economic Analysis & Monetary Policy Research, Quantitative Analysis, & Decision Science Investments, Trading, and Financial Markets Banking, Lending, and Credit Industry Business Finance, Personal Finance, and Valuation Principles
  • Courses
+ More

Table of Contents

What is the Benjamin Method?Hoe Does the Benjamin Method Work?Example of the Benjamin MethodAcademics Research on Benjamin Method

What is the Benjamin Method?

The Benjamin Method is a formula used in investment to determine the intrinsic value of stocks in a bid to find assets that are undervalued to select the most profitable assets. The Benjamin Method is a value investing strategy which is achieved through fundamental analysis of the asset. The Benjamin Method was named after Benjamin Graham, the father of value investing whose investment philosophy has helped investors and fund managers effectively select winning value stocks.

Back to:INVESTMENTS & TRADING

Hoe Does the Benjamin Method Work?

Benjamin Graham was a great investment philosopher whose investment principles spanned after his lifetime. Benjamin Graham was an investor in practice, an author and economist. His investment principle or formula popularly called the Benjamin Method became prominent in the 1930s as it applies to investments. The Benjamin Method is otherwise called the strategy of value investing through which different investors can select investments and assets based on the value they offer. There are two categories of investors in the market, the short-term investors and the long-term investors. Given that the goals of the investors are different, their approach towards investing is also different. Through the strategy of value investing, investors can analyze stock data to determine assets that are systematically undervalued.

Example of the Benjamin Method

The illustration below would enhance a better understanding of how the Benjamin Method works; Investor A is interested in purchasing shares in a renowned widget company in the United States. If the company trades its stock at $80 per share, and it earns a profit of $10 annually, if a smaller company offers it stock at a cheaper rate, lets say $12 but earns a profit of only $1.5 annually, the investor will use the value investing strategy to analyze the stock data of the companies or carry out a fundamental analysis in order to select which company to invest in.

Was this article helpful?

Yes
No

Related Articles

  • Specific-Shares Method (Investements) - Explained
  • Hang Seng Index (HSI) - Explained
  • Return on Investment (ROI) - Explained
  • Chicago Stock Exchange - Explained



©2011-2021. The Business Professor, LLC.
  • Privacy

  • Questions

Definition by Author

0
0
Expand