Mr. Norman Rothery at the Canadian Moneysaver magazine uses the Graham stock criteria to screen for stocks on a yearly basis. For those of you who don’t know who Benjamin Graham is, he is also known as the “Father of Value Investing”. He is the mentor of the greatest investor of all time, Warren Buffet.

Anyways, back on point, Rothery started publishing the stock screen and results in the year 2000. Below is a chart of the results thus far:

If you were to take the stock picks from Mr. Rothery/ Graham since the year 2000, you would have a 350% return. Not too shabby compared to the S&P return of 1%.

Here is the stock screen criteria used:

• P/E Ratio < 15
• P/B Ratio < 1.5
• Book Value > 0.01
• Current Ratio > 2
• Annual EPS Growth (5-yr avg) > 3%
• 5-Year Dividend Grwoth > 0%
• 5-Year P/E Low > 0.01
• 1-Year Revenue > $400 Million

Here are the results for of the screen (Sept 27, 2006):

Blair (BL)

Briggs & Stratton (BGG)

Seaboard(SEB)

Media General (MEG)

Teekay Shipping (TK)

Overseas Shipholding (OSG)

Gibralter Industries (ROCK)

Schnitzer Steel (SCHN)

This screen can be EASILY replicated using MSN’s free stock sceener. The Graham strategy is to purchase deeply discounted strong companies but sell them when you reach a 50% profit or by the end of the year.

Be wary though, no matter what stocks that a stock screener spits out, you need to do your own due diligence on the companies before purchasing.

Happy Investing!

Be Wise… and Be Stingy..

As you can see from our holdings below, we have picked up a few more stocks. Perhaps it would be a better strategy for this game to pick a few stocks only and ride them out. Alas, we have a tendancy to pick up whatever looks like a good buy.

Over the past few days, we have purchased: SCSS, RRZ and ARU. We are still buying based on technical analysis ONLY. If we were to put real money into the market right now, SCSS (select comfort) would probably be our first pick. Tom Gardiner over at fool.com has extreme confidence in this stock and has recommended it many times in his Hidden Gems newsletter.

The income trusts didn’t explode out of the gate as we expected with only a modest gain. AET.UN is still our biggest winner with a 10% gain.

To date, we are ranked 83rd out of 1211 traders with a 4.39% gain. Only a few weeks left in this round of the AOL Stock Challenge!

According to JohnChow.com (who is apparently is in close with AGLOCO), they will be releasing the viewbar in 7-10 weeks. So now is the time to build up your referral network!

For those of you who missed out on my previous articles on AGLOCO, here they are again:

Get Paid to Surf the Net

AGLOCO: Some Questions Answered

Any more questions? If so, feel free to leave them in the comments and we will try to find the answers for you.

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