Ask Colin

The mini Course on stock selection on your subscription web site suggests that your version of Benjamin Graham's Margin of Safety has replaced the value stock scan. Is that right?

No that is not right. The value scan is a technique for filtering all stocks on the market using a ratio like the PE ratio to find stocks that might be cheap. I then manually inspect the charts for those stocks to see if there is an uptrend. If there is and I am interested in the stock, I will then do my fundamental research. Ben Graham's Margin of Safety is a fast way to assess how safe a company might be as a value investment. As such, it is a first step in my fundamental research. The idea of doing the scan is to get to a short list, rather than spending countless hours researching stocks that fail simple tests. The scans are not perfect. Good ones can still slip past.