Course 506: Great Investors: Benjamin Graham
Favor Big Companies with Strong Sales
In this course
1 Introduction
2 Seek a Margin of Safety
3 Favor Big Companies with Strong Sales
4 Seek Dividends
5 Choose Companies That Are in Good Financial Shape
6 Look for Companies with Sustainable Earnings Growth
7 Pay Attention to Price Multiples

An investor during the Great Depression, Graham saw once-thriving, smaller firms fall by the wayside as their sales grew smaller and smaller. Based on his observations, he discerned that if a company had at least $100 million in revenues it had a better chance of surviving. (That would translate into about $1 billion in sales today. Remember that Graham's books were written in the 1930s and 1940s, so think in terms of what $100 million meant back then.) His rationale was that tiny companies have a harder time cushioning the blows of an economic downturn, so it's best to invest in larger companies.

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