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| S&P 500 EBI Portfolio - Averaged 19% Since 2003!! | ||||
Frequently Asked QuestionsIf you would like to submit a question for posting on the FAQ’s page,please send e-mail to Benchmark Investing. What is Benchmark Investing? Does Benchmark Investing work with companies in the S&P 100 and S&P 500? What is Return on Equity (ROE)? What is Book Value (BV)? What is the Dow Jones Industrial Average (DJIA)? What is the S&P 100? What is the S&P 500? What data is updated and when is it updated? Can I download the data into spreadsheet form? How many years of data are required to calculate the 10 and 5 year target numbers? Why is the simple intrinsic value calculation missing for some companies on the "Future Target" pages? How is the expected earnings growth calculated? What is the definition of the "enhanced" Benchmark Investing portfolios? Top What is Benchmark Investing? Benchmark Investing is a method for finding good companies that are undervalued. Benchmark Investing uses sound investing principles such as the ‘Margin of Safety’ and 'Preservation of Principle' advocated by Benjamin Graham in his book The Intelligent Investor. The thought behind Benchmark Investing is to find those stocks that are undervalued by the market and place your money into those stocks. This undervaluation is based on a "downside target" established by Benchmark Investing calculations from 7-10 years of data. Investing in undervalued stocks provides the investor with the 'margin of safety' which is so crucial in order to preserve the original investment principle. Therefore the investor is able to minimize risk while maximizing returns Top Does Benchmark Investing work with stocks in the S&P 100 or S&P 500? Lee Lackey, one of the authors of this website, is currently working on a backtest of the S&P 100. No data is available at this time. However, because of the sound investing principles that Benchmark Investing utilizes we do expect that it will outperform the market over the time period of the backtest. Lee Lackey has also recently finished an “all months”backtest of Benchmark Investing using the Dow 30 from 1974 through 2003. The data from this backtest will soon be available on the Dow History page. Top What is Return on Equity (ROE)? ROE is the ratio of earnings from operations to shareholder equity. Top What is Book Value (BV)? Book Value is a measure of a company's liquidation value -- what it could be sold for in a hurry. In general it takes into account only "hard assets". It is a basic calculation of assets minus liabilities. The formal definition is net worth (including intangible assets), less preferred stock at liquidating or redemption value. Top What is the Dow Jones Industrial Average (DJIA)? The Dow Jones Industrial Average is a price-weighted index composed of 30 of the largest and most widely held public companies in the United States. The "industrial" portion of the name is largely historical - many of the 30 modern components have little to do with heavy industry. To compensate for the effects of stock splits and other adjustments, it is currently a scaled average, not the actual average of the prices of its component stocks - the actual average of prices is multipled by a scale factor, which changes over time, to generate the value of the index. Source = Wikipedia Top What is the S&P 100? The S&P 100, often known by its ticker symbol OEX, measures large-cap company performance. This market capitalization weighted index is a subset of the S&P 500, and is made up of 100 major, blue chip companies across diverse industry groups. Since its introduction in 1983, an important criterion for index inclusion has been the availability of individual stock options for each constituent. Source = Standard & Poor's Top What is the S&P 500? The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value weighted index (stock price times number of shares outstanding), with each stock's weight in the Index proportionate to its market value. Widely regarded as the best single gauge of the U.S. equities market, this world-renowned index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. Although the S&P 500 focuses on the large-cap segment of the market, with over 80% coverage of U.S. equities, it is also an ideal proxy for the total market. Source = Standard & Poor's Top What data is updated and when is it updated?
Can I download the weekly data into spreadsheet form? Yes, the Dow data is available for free on the Data Download page. You must be a subscriber to either the S&P 500 Annual or S&P 500 6 Month subscription in order to dowload those files. Once you are logged in you can download the S&P 500 data at this link. Top How many years of data are required to calculate the 10 and 5 year target numbers? If a company is missing from the list it may not meet one of the following requirements: Benchmark Investing 10 year target prices require that a company have the following data to produce 10 year target prices:
Why is the simple intrinsic value calculation missing for some companies on the "Future Target" pages? Certain companies (mainly in the banking, insurance, building & retail industries) do not report a value for capital spending per share. Therefore, the simple intrinsic value calculation cannot be completed. Top How is the expected earnings growth calculated? Benchmark Investing uses the most recently reported earnings in it’s calculations. The earnings growth is calculated by comparing the last four quarters of reported earnings with the next four quarters of estimates to project the growth over the next year. With some companies there are only two or three quarters of future estimates. In this case the earnings growth is calculated by comparing the two or three future estimates with the same two or three quarters of reported earnings numbers from the previous year. Top What is the definition of the "enhanced" Benchmark Investing portfolios? The enhanced Benchmark Investing portfolios are those portfolios made up of companies that met the following citeria on January 1st.
https://www.benchmarkinvesting.com/EMAdef.asp
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