When you hear the phrase "value investing," Warren Buffett most likely comes to mind. But hopefully, you also think of Ben Graham -- the father of value investing. And considering that some of the world's most successful investors carry Graham's flag, there's good reason for Fools like us to be obsessed with the concept.

Graham had a plan

But with thousands of stocks out there, how do we separate the value plays from the throwaways? In The Intelligent Investor, Graham lays out a basic framework for winnowing through the sea of stocks to get to the good stuff.

1. Financial stability. Graham wanted investors to be sure that they weren't investing in castles made of sand, so he put requirements on prospective investments' balance sheet strength and record of past earnings.

2. Growth. You wouldn't have caught Graham dead chasing the high-flying stocks of the day, but he did want to see that over the long haul, earnings were at least moving in the right direction.

3. Valuation. This, of course, is what Graham is probably best known for -- requiring that a stock be selling for less than it's really worth. While a simple valuation ratio can't tell you the whole story, it may signal a stock that's definitely not a deal.

Full Story: http://www.fool.com/investing/dividends-income/2010/05/05/the-great-investing-wisdom-that-wall-street-forgot.aspx