Investing guides: value, dividend growth, GARP and metrics
Four complete guides on the strategies Sixtycents is built around — investing as Graham, Lynch and Buffett taught it. Each one runs from the base criteria through to the awkward cases: cyclicals whose P/E lies, yields that are traps, growth that was bought rather than earned.
Value Investing Strategy
A complete value investing guide: Graham's criteria, how to calculate margin of safety, the Graham Number, and how to spot a value trap.
- P/E
- ≤ 15
- P/B
- ≤ 1.5
- Margin of safety
- 20–50%
- Positive earnings
- 10 of 10 yrs
Dividend Growth Investing
A complete dividend growth guide: Chowder Rule thresholds, Aristocrats vs Kings, spotting a yield trap, and safe payout ratios by sector.
- Chowder Number
- ≥ 12
- Payout ratio
- < 60%
- Growth streak
- ≥ 10 yrs
- FCF cover
- ≥ 1.3×
GARP Investing
A complete GARP guide: Peter Lynch's five filters, what a good PEG ratio is, when PEG below 1 lies, and how to judge whether growth lasts.
- PEG
- ≤ 1.0
- EPS growth
- 10–30%
- ROIC
- ≥ 12%
- Net debt / EBITDA
- ≤ 1.5×
Stock Valuation Metrics Explained
What each valuation metric measures and where it breaks: P/E, P/B, EV/EBITDA, PEG, FCF yield and payout ratio — plus when to use which.
- PEG
- ≤ 1.0
- EV/EBITDA
- < 10×
- FCF yield
- > 5–6%
- P/E
- Own 25th pct
Jump straight to
the questions readers arrive with- How to calculate margin of safety
- Value trap vs genuinely undervalued
- Using the Graham Number to set a buy price
- The Chowder Rule and its thresholds
- When to buy an Aristocrat after a price drop
- How to tell a dividend is about to be cut
- What is a good PEG ratio
- When a P/E of 30 is cheaper than a P/E of 12
- When to use EV/EBITDA instead of P/E
- What a negative P/E ratio means
“The goal of the investor is to buy a dollar for sixty cents. The investor who permits himself to be stampeded or unnerved by unjustified market declines is transforming his basic advantage into a basic disadvantage.”