Ben Graham's Last Will and Testament: An Evaluation

This paper investigates the performance of the much publicised investment portfolio selected by Potter Partners, using criteria recommended by the late Benjamin Graham. The selection criteria are based on companies' annual reports and other publicly available information, such as share prices. Within the context of the capital asset pricing model it is demonstrated that the adoption of such criteria does not lead to returns in excess of equilibrium expected returns. This result is consistent with the existing evidence in support of the efficiency of the Australian industrial equities market.