Hello! I was checking out this blogpost where the Graham number IS explained, and there are a couple of things i dont understand:
https://www.grahamvalue.com/blog/adjusting-benjamin-grahams-price-calculations-today
Why do we apply the square roots to It?
Why in the example of adjusting the numbers to a pe of 30 , involved the convoluted process of dividing 30 by 15 to get a 2, and calculate its square roots, indtead of just replacing the 15 on the fórmula for the 30?
Why are we so strict about using 15 and 1.5 in the fórmula? Is It just because Benny g said he liked them in the book?
Can anyone give me an example of how we actually , manually calculate the Graham number?
Submitted by Lordpotatus. Created on Sunday 13th April 2025. Updated on Sunday 13th April 2025.
Bond Yields
Dear LP,
The derivation of the Graham Number is explained in Using The Graham Number Correctly, whereas the connection between P/E ratios and Bond Yields is given in Adjusting Benjamin Graham's Price Calculations Today (the link you shared).
Kindly go through the Quick Reference and the video tutorials in it, for a full description of Graham's framework and its implementation on GrahamValue.
Thank you for your question!