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Ben Graham's Last Will and Testament: An Evaluation

Author

Listed:
  • Ronald Ma
  • G. P. Whittred

    (Department of Accounting, University of New South Wales. Philip Brown and Frank Finn provided helpful comments on an earlier version of this manuscript.)

Abstract

This paper investigates the performance of the much publicised investment portfolio selected by Potter Partners, using criteria recommended by the late Benjamin Graham. The selection criteria are based on companies' annual reports and other publicly available information, such as share prices. Within the context of the capital asset pricing model it is demonstrated that the adoption of such criteria does not lead to returns in excess of equilibrium expected returns. This result is consistent with the existing evidence in support of the efficiency of the Australian industrial equities market.

Suggested Citation

  • Ronald Ma & G. P. Whittred, 1981. "Ben Graham's Last Will and Testament: An Evaluation," Australian Journal of Management, Australian School of Business, vol. 6(1), pages 51-66, June.
    • Handle: RePEc:sae:ausman:v:6:y:1981:i:1:p:51-66
    DOI: 10.1177/031289628100600103
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    References listed on IDEAS

    as
    1. Patell, Jm, 1976. "Corporate Forecasts Of Earnings Per Share And Stock-Price Behavior - Empirical Tests," Journal of Accounting Research, Wiley Blackwell, vol. 14(2), pages 246-276.
    2. William F. Sharpe, 1964. "Capital Asset Prices: A Theory Of Market Equilibrium Under Conditions Of Risk," Journal of Finance, American Finance Association, vol. 19(3), pages 425-442, September.
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    More about this item

    Keywords

    CAPITAL MARKET EFFICIENCY; PORTFOLIO RISK;

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