The Intelligent Investor Summary

the intelligent investor summary

Defensive (Passive) Strategy

1. Avoid small cap stocks unless it is a diversified small cap index
2. Current assets at least double current liabilities
3. Earnings shows stability over the previous ten year period
4. Look for companies that have a history of paying dividends
5. P/E ratio no more than 15 over the previous 3 years
6. 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

1. Current ratio > 1.5
2. Debt < 110% of working capital
3. Current EPS > EPS 5 years ago
4. Dividend > 0
5. Price to book < 1.2
6. PE ratio < 10
7. > 20 stocks

The Intelligent Investor Summary Conclusion

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