Generating Profits through Graham's Value investing using Exit Strategy : An Empirical Analysis.

Based on a sample of 49,117 firm-year observations for BSE listed firms spanning over 15 years from 2003 to 2017, the study seeks to evaluate the profitability of Benjamin Graham's stock selection principles in the Indian stock market. The results reported that the stocks failed to generate significant alpha if they are held for 1 or 2 years. However, on introducing Graham's exit advice, the performance of portfolios comprising firms with high earnings yield and dividend yield, discount to book value, and net current asset value per share improved significantly in one year period and such stocks were able to withstand market downturns. Consequently, the results imply that the exit strategy weighs on the buy and hold strategy in terms of the excess riskadjusted return. Also, the findings have significant implications for practitioners in the pursuit of "alpha." [ABSTRACT FROM AUTHOR]