the intelligent investor summary
Defensive (Passive) Strategy
- Avoid small cap stocks unless it is a diversified small cap index
- Current assets at least double current liabilities
- Earnings shows stability over the previous ten year period
- Look for companies that have a history of paying dividends
- P/E ratio no more than 15 over the previous 3 years
- Multiply the P/E ratio by the price to book ratio, if the figure is less than 22.5 it is considered to be a reasonably priced stock.
Enterprising (Active) Strategy
- Current ratio > 1.5
- Debt < 110% of working capital
- Current EPS > EPS 5 years ago
- Dividend > 0
- Price to book < 1.2
- PE ratio < 10
- > 20 stocks

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The Intelligent Investor Summary Conclusion
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