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The Graham number or Benjamin Graham number is a figure used in securities investing that measures a stock's so-called fair value. Named after Benjamin Graham, the founder of value investing, the Graham number can be calculated as follows:
22.5 × × {\displaystyle {\sqrt {22.5\times \times }}}
The final number is, theoretically, the maximum price that a defensive investor should pay for the given stock. Put another way, a stock priced below the Graham Number would be considered a good value, if it also meets a number of other criteria.
The Number represents the geometric mean of the maximum that one would pay based on earnings and based on book value. Graham writes: