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Summary: The Bible of Value Investing
Review: 67 years after this initial version of Security Analysis was published, it is still considered a bedrock for value investors. Written in the heart of the 1930s Depression, Benjamin Graham laid down his theories for all areas of investing in this book. With this book he revolutionized the ways in which investors evaluate the potential yield and growth of stocks and other securities.
In this book, Graham gives his theories, backed by many early 20th century examples, most of which are still applicable to today's market. Graham discusses bonds, preferred stocks, some of the original mortgage-backed securities, and other fixed income investments. Then in the latter half of the book, he gives his instructions for investing in common stocks.
This book will be very monotonous to anyone except for serious investors with a solid financial knowledge base. But for those exceptions, it will be very interesting. I think Graham's instructions on reading balance sheets !and income statements to be the most productive thing I gained from this book. For investors who enjoy financial theory and want to learn more about securities research, this book is a must.
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Summary: Packed With Knowledge!
Review: A book that has been continuously in print for nearly 70 years obviously has timeless relevance. The principles of value investing, spelled out for the first time in Security Analysis by Benjamin Graham and David L. Dodd, have made fortunes for investors since it was first published in 1934. For example, Warren Buffett calls this book his Bible. Much has changed on Wall Street since the 1930s, but the concept of buying undervalued companies has not. In addition to its lucid explanation of investment basics, the book is a fascinating picture of a time when the lessons of the Great Depression were still being absorbed. The Securities Act of 1933 had just changed the rules of financial disclosure, and most public companies were manufacturers, mines, railroads or utilities - not the makeup of today's blue-chip portfolio. We recommend this book to serious investors who want to cut through modern Wall Street jargon, and to students of financial history.
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Summary: The best investment book I ever read
Review: After reading Graham, there was no turning back in investment ideas. I was hooked to value investing. It was a clear as a bell
in clearing the fog of misunderstanding and
investment sales hype. After Graham and Dodd
It all made sense. I absorbed investment information data like a computer, but could not tabulate it Just a big jumble of facts and figures.
After Graham & Dodd, it was as if a light turned on and a new program organized the data. A whole new world opened up. Its was all new thinking and it made all the difference. Thank you Mr. Graham and Mr.Dodd.
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Summary: A Historical Artifact....
Review: All you need to know about this book is that it was written in 1934. In other words... time has passed it by. Not to say that its entirely useless -- it was a great book for its era -- but if you read it now, you have to slog through a lot of outdated material to get at the good stuff (think of it as panning for gold).If you really want to read it, go ahead, it won't hurt you, but be mindful that there are more modern books out there.
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Summary: Not Just A Way to Gain a Historical Perspective
Review: Although it is fun to read Graham & Dodd's First from the context of historical perspective, there is more to this volume than history. When I first learned that Warren Buffett keeps and peruses EACH edition of Graham & Dodd's "Security Analysis", this struck me as a sort of silly fanaticism. But anyone who takes the time to read more than one edition of "Security Analysis" will understand why Buffett probably keeps all four. For better or worse, each edition has some gem which may not be found in the other volumes. In the first, for instance, there is a section on rights offering analysis which can't be found in the 3rd and 4th editions (I've actually never been able to get my hands on a second edition, so I don't know whether the equation he offers in in the 2nd or not). I'm not sure if this would be the first "Security Analysis" volume I'd try to tackle (the 3rd is probably the best...Graham participated less actively in the 4th), but if you are comfortable enough with security analysis terminology to know what is antiquated and what is not in this 1934 text, you will not be sorry you made the effort to buy and read it.
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Summary: Great book, fine writing, a brilliant mind...
Review: Although many of the examples of the book might look a bit outdated at a first read, they do in fact abound with gems of wisdom. In the end, you'll realize the whole work is impregnated with a genuine, authentic and hands-on common sense (in my opinion, a rather rare quality in the world of financial books). Most of its hidden and simple wisdom I discovered only after the second or third read. But don't read it one shot, just dig in it once in a while. The more you dig, the more you'll get out of it. In one word, a bible against bubbles, to read again and again. In fact, its basic and down to earth common sense will increase your feeling of safety towards (the selection of) investments (again, a rare quality for today's financial books). In a more general and less personal note, as many have already stated, a very clairvoyant work that has understandably stood the test of time. It is a, if not the bible of the fundamentalist, to meditate over and over again... Ah yes, the style is sophisticated and pleasant but never complicated, although the intrinsic and intricate logic of the whole approach does not unravel immediately to a profane reader or to the financial bigott. The fact is that the arguments are presented without pretension or boggus pomp (again, a rare quality in the world of financial, let alone investment books). The writing style is one of lucidity and humbleness, content to draw clear and simple facts to your attention in order to make a point and to let a philosophy slowly emerge. Enjoy, time is the secret. In a more practical note, one of the few (in my view well-needed) roads to safety and soundness in investment: bear in mind that it was written during, or shortly after, the great deppression.
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Summary: Excellent text on what to look for in analyzing companies
Review: Although the book is written in the mid-1930's and all examples are based upon the author's recent history, the book provides effective and logical ideas on what is important when reviewing company data(balance sheets etc). The first half of the book details Bonds and other lower risk securities which proved to be boring(frankly). The second half of the book did indeed show what is important when reviewing balance sheets and choosing good value oriented companies. I understand why Warren Buffett recommends this text!
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Summary: The one book every serious investor should read
Review: At first glance, Security Analysis - one shy of 700 single spaced pages without a single picture other than a smiling Mr. Graham on the cover - appears not for the faint of heart. Inside, however, lies the single greatest book on investing ever written, which remains remarkably readable, insightful and timely nearly seven decades after its first edition. Graham, a successful investor in his own right, was also a highly effective and influential teacher (one of his students named Warren Buffett has done quite well), and his methods and language are refreshingly clear and (believe it or not) concise. The length of the book is due to the breadth of its content, not to any wordiness or unnecessary diversions. Graham (and his collaborator Dodd) meticulously and methodically builds a framework for the analysis and decision-making necessary for truly good investment decisions. Step-by-step, they lay out a general approach and philosophy for investment (as quite distinct from mere speculation) followed by the systematic analysis of fixed income, convertible and equity securities (i.e., bonds, converts/preferreds, stocks); a detailed discussion of financial statements; and a description of certain underlying differences between the intrinsic value of a business and its fluctuating stock price. As a result, the reader emerges with a solid philosophy and approach for his or her own investments and the analytical tools to make actual buying and selling decisions. This book is neither a get-rich-quick scheme nor an empty academic exercise. Graham does not set out to justify or theorize about the market. Instead, he sets out to counsel the student on the profitable investment in individual securities. Security Analysis contains dozens of case studies and lessons that are just as relevant today as in the post-1929 aftermath, including particularly misleading technical analyses, dangerous justifications for the valuations placed on hot new companies and the dilutive effects of stock options. As other reviewers have noted, Graham has been a towering figure in Finance, influencing Warren Buffett and countless other successful investors, and yet the lessons contained in this book are repeatedly ignored by far greater numbers of individuals and professional investors. The methodologies and rationale for justifying dot-com and telecom valuations in recent years, for example, are strikingly similar to the new stock issues Wall Street marketed (and people bought) just as eagerly in the late 1920's. The book does show its age in some respects. While the principles underlying Security Analysis are completely sound today, there have been important changes in the market as well, such as the pervasive use of stock options as compensation, the unprecedented access to information (useful or otherwise) enabled by the Web, the heightened awareness around corporate governance issues (and the resulting influence of large institutional shareholders, such as pension funds) and the spectacular growth in mergers and acquisitions, which has at the very least added layers of accounting complexity. In addition, Graham relies perhaps too heavily on seeking out unpopular bargain issues based on asset value. In today's environment, and partly as a result of accounting limitations, companies are driven as much by knowledge intensity as by asset intensity. A strict Graham approach may preclude considering promising companies whose value lies primarily in intangibles not captured on the balance sheet, such as in the form of brands (Coca Cola), distribution process (Dell) or market position (Microsoft). As a result, I recommend the following books as enhancements to the core principles articulated in Security Analysis: * The Intelligent Investor - Written by Graham in the early 1970's with some assistance from his former student Buffett, he adds several decades of wisdom and experience, including greater discussion of technology companies, mutual funds and market cycles. * The Essays of Warren Buffett: Lessons for Corporate America - A kind of Greatest Hits of Buffett's essays, primarily drawn from his annual Berkshire Hathaway letters to shareholders, this is an extremely useful, funny and brilliant collection spanning a wide range of corporate finance, investment and general business thought. His commentary on some of Graham's key concepts, such as Mr. Market and Margin of Safety, combined with his own current, real-life case studies and innovations make this a must-read. * Common Stocks and Uncommon Profits - Philip Fisher was, according to Buffett, his second greatest influence after Graham, and this book fills in much of the qualitative analysis of businesses that the analytical Graham places relatively less emphasis on. Fisher is particularly keen on analyzing companies which rely heavily on R&D and new products to generate continuous growth. Happy investing!
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Summary: You read the fifth edition so why buy the first?
Review: Each edition of Security Analyisis is different. The first edition whas written by Benjamin Graham, the fifth wasn't. Both are excellent in their own way. By reading the first edition published in 1934, you will learn nothing changed. Learn about "New Era Investing" and what meaning it has today. Learn the best ways from the "Dean of Wall Street" and you can't go wrong.
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Summary: "The Greatest Investment Book Ever Written!"
Review: Eventhough this book is over 65 years old it is still as relevant as ever, maybe even more so. With all the hussle and bussle of the day-traders and the momentum style investors, it is a nice change of pace to read a book based on common sense, buiness-style investing. Read his words, understand his philosophies, and you will profit!
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