The investment secret that made Buffett a billionaire

Here’s a breakdown of the formula:

• A company’s “EPS” is its earnings per share, or earnings divided by the total shares outstanding.
• At the time the formula was developed, Graham calculated that the average price to earnings for non-growth stocks was 8.5.
• The “g” represents the seven- to 10-year growth outlook for the company.
• When Graham developed the formula, the average yield on AAA corporate bonds was approximately 4.4%.
• “Y” is the current yield on long-term corporate bonds.

Each element is quite simple on its own. Yet by putting them together, Graham forged a powerful tool for estimating a stock’s true value.

While as a student and employee of Benjamin Graham, Buffett learnt and mastered this investment secret.

And it’s not only helped him grow Berkshire Hathaway into a $550 billion company, but also transformed him into one of the most successful investors ever.

In fact, Buffett himself says his investment style was 8

The basic idea of buying stocks below their true values is as important as it's ever been...Especially in today's market

Stock markets around the world have felt some heat over the past month. It’s not only the All Share that’s fallen.

But the silver lining is many share prices have deviated below their real value. In fact, the All Share is one of the cheapest stock markets right now. 

And like I said, Graham believes situations like this, presents investors with a great opportunity to buy quality companies for cheap.

As an avid follower of Graham, I’ve used this secret to uncover cheap but great investments over the past three years.  And it’s been a huge success.

This secret has helped the Real Wealth portfolio bank an average of 79.80% on just 4 stocks alone.

There’s no better time than now to buy some seriously undervalued stocks.

See you next week,

Joshua Benton, Real Wealth

PS. Warren Buffett wasn’t the only investors that made a fortune from this secret. Professional investors Walter Schloss, Irving Kahn and William J. Ruane all used this secret to make their fortunes. Find out how you can use it to make money investing undervalued stocks today.