Security Analysis: Principles and Techniques

I want to take charge of my own life and make money to live well. When i was young my first choice is be an entrepreneur and build a global business, but you cannot do it without a great idea or something you really believe. So second choice is to be CEO of big company, this is also not easy. You need to have top education or work in the company for decades. You cannot just write to them and simply convince them that you could do a good job and be their CEO. So if there are 1000 people, probability is that 10 of them get to be own boss, 10 of them get to be CEO, there still left 980 of them having to work for others. It will be fine if you like your work and earn enough. But If YOU want to TAKE CHARGE of YOUR LIFE but simply in your circumstances having no hope to be entrepreneur or chance to be CEO and do not like your day job, you and 980 of them still have a way, and that is Value investing. For me, the best way is not to build a good company, but to find one and invest in it and be a part owner of the company. It means do not be CEO, but let CEO work for you and you monitor them. To know Value investing and apply it, you need to start with books. My first investment book is (1)The Intelligent Investor,read around mid 2007,as it show you what investing is all about. I have zero knowledge beforehand and do not have any business, economic, accounting, financial education, etc. Then I read (2)Common Stocks and Uncommon Profits followed by (3)The Little Book of Common Sense Investing. Next I read THIS BOOK (4)SECURITY ANALYSIS SECOND EDITION,read two times on first and last quarter of 2008. Lastly with extra effort and fifth gear, I managed to finish off (5)The Theory of Investment Value, around Jan 2009. I then read the whole Kraft Foods annual report, the first i read, and the company's stock chart by Valueline. After two years of faith and mental work, I get a chance to apply it. I invest in Kraft Foods during the low of 2009, around march. The market capitalization for the company at that time is around 30 billions. Till now this year 2014, as it spilts into two company on late 2012, the combine worth is around 90 billion. Yes I make money, but not as large as I wanted to because I do not have millions of available cash at that time. People can take away your money but not your enlightenment. You can start business and fail, or be CEO and get sack, but once you acquire the art of Value investing, it is there for your life to use. This book is for those who are serious in starting business, investment management or for just about anyone who like to make money work for you. You cannot train to have a good vocal and make millions in being a top singer or run like Usain Bolt in 100m race if you train. But you could have an investment mindset with the above five books and make millions or reach the top in your life. You must be sincere and willing to take the effort and time with concentration. It is a journey and not a get rich without effort thing. Finally and importantly, when you know for yourselves that certain things are unwholesome and wrong, and bad, you give them up. And when you know yourselves that certain things are wholesome and good, then accept them and follow them. If you know that certain company's products and services are bad for human and society at large, then follow your conscience and do not invest. SECURITY ANALYSIS Second Edition by Benjamin Graham will be your best investment of time, Buy it and good luck.

Security Analysis provides a very detailed, logical overview of the theory of Value Investing as contrasted to speculation, as described throughout the book. Despite the 2nd edition exceeding 80 years of age, many of the concepts remain quite relevant today. Moreover, the book provides a fascinating perspective of the less-regulated capital markets and recommended analyses that mirror accounting standards updates, which eventually came into effect (e.g. Leases and Diluted EPS). As others have written, one challenge with reading this book is the different environment in which it was written. Due to advances in data availability (i.e. Efficient Market hypothesis), there are reduced opportunities for material arbitrage and significant undervaluations. Furthermore, the extensive use of Railroad examples adds another layer of depth to the work, as a fair bit of contextualization is necessary at times. Hence, prior knowledge with The Intelligent Investor and a functional understanding of the capital markets is certainly beneficial when reading this work, although one with adequate financial literacy could likely track with the arguments and examples regardless. Lastly, the print of the book was fine, and I would definitely recommend this edition (as opposed to others with content edits) to anyone interested in expanding their knowledge of the capital markets and increasing their ability to synthesize accounting and financial theories in performance of security analysis.

My first encounter with the principles of Ben Graham was Intelligent Investor. I found that book to be one of the most insightful security analysis books for the average person. Fast foward a couple of months I purchased the 1934 edition of Security Analysis. Upon completing it I fell in love with the art of value investing. I read the fifth edition (which was not written by Graham) and found that to be useful for modern security analysis, but I constantly referred to the 1934 edition when I felt that the principles of the fifth were not consistent. Later I came upon this page because I heard that Warren Buffett really praised this book for being Graham's "magnum opus". Already convinced that the first edition was the best I decided to purchase the second edition and decide for myself. When finishing the book I too became a believer that the second edition is far superior to the first. The second edition is very similar to the first in that it has the same concepts only the main difference is in the second edition, Graham decides to expand on the principles laid in the first edition. Graham is able to revise some of his ideas from the first edition as the United States was on the eve of WWII. Bottom line is this, if you are really serious about investing then it would do you good to purchase this edition.

This book is not for casual investors. Lots of examples. It takes some attention, but not overly technical. No theory ... Example after Example after Example. Accounting was worse then (believe it or not). Nothing subtle. In some ways, it is like reading 'Believe it or Not'. Problems stand out, and Graham's commentary takes it from there. It isn't about Stocks. It is about securities. Senior bonds, Junior debt, preferreds, common stocks, warrants, convertibles, with specifics on industries. Why this Edition??? This is what he learned in the 1930's. Parallels between then and now are striking. A post mortem on the 1930''s. It is all there and the similarities between then and today, as we look back on the late 2000's is remarkable. I found the analysis of different securities of the same firm very useful and profitable. Graham could write. In a way that is old fashioned in its quality and formality, but very readable. Very careful writing. A pleasure to read.

I just finished reading this book cover to cover, and will probably read it again in a few weeks time. I found it to be quite simply the best and most complete resource on value investing I have ever seen, read or heard of in my life. Graham and Dodd not only teach us how to invest and why, but convey with beautiful eloquence their reasoning and frame of mind. They teach us that investing is as much about constitution and temperament as it is about logic and numbers, and are able to impart that wisdom and experience to us in those few hundred pages (ok, many hundred pages). For those of you reading this who are new to investing, Benjamin Graham and David Dodd quite literally wrote the book on value investing, and this is it. I would point out though that it was written for the purpose of being a source of information and tools rather than a way of introducing and inspiring its readers to the philosophy of value investing. So if you are new to investing or to the concepts of value investing, I would really recommend reading Graham's "The Intelligent Investor" first; it's a comparatively easy to read introduction to the concepts covered in greater detail in this book. While I have not read the original 1930's edition, I have heard that this version is more complete in that it irons out some of the kinks in the investment strategy that Graham developed following his near bankruptcy during the great depression. A word on the relevance of this book in today's market: Much of the book centers about examples from preferred stocks of utilities and railroads, investment vehicles which are far less prevalent today than they were in the early 20th century. However, these are just examples, and the pitfalls and opportunities which arise in the stock market are as prevalent today as they were in the days this book was written. I am of the opinion that those who criticize this work on the basis that it is outdated, really did not understand what Graham was trying to do; to convey a new way of thinking about stocks, and to understand them based on the company that they represent. It doesn't matter whether you are purchasing a pre-depression era railroad preferred or the hybrid floating rate bond of a modern technology company, the examples exist to illustrate how to look past all that and to understand what the purchase of that security really means. If, after reading this book, you find yourself unable to transfer the examples to the modern world, then quite frankly you've read it wrong. If, however, you are concerned about the relevance and are after more specific guidance on modern applications (as well as trimming of the "less" relevant sections), take a look at the 6th edition of this book, which contains detailed chapter summaries and introductions by modern money people. Finally, the reason for the 4 stars: The digitization of this book is not fantastic, and given the price this is not really acceptable. I found several errors which I have reported (and will hopefully have been fixed by now), but my real gripe is with the tables and figures, which are simply scanned. This is usually fine, but many of the footnotes are so small as to be illegible, and the overall feel is somewhat like a sketchbook; with cutouts glued to the pages where the tables were in the real book. I had hoped that Amazon would instead have digitally transcribed the tables and inserted them, or at least given them a transparent background, rather than the sepia tone that can't be changed on the tables. If this is ever corrected I'll change my review to 5 stars and remove this paragraph. I can't possibly express my gratitude for what those two did when they decided to put Graham's experience onto paper in the form of this book, and I think I will forever be grateful for their efforts. This book has taught me invaluable lessons not only in investing but also in prudence and the value of sobriety in the face of euphoria and gloom, lessons which apply to many other facets of life.

Buy it if only to keep it on your shelf. We know you’re not reading it.

Fue un regalo, la persona dice que es un buen libro y lo recomienda ampliamente.

I chose this version of Security Analysis because Buffet said it was his favorite. It did not disappoint. However, it's very helpful to have a background in finance and accounting to enjoy this book. I tried to read it as a college sophomore, but couldn't get through it. After 1.5 years of investment banking, and 1 year of investment analysis (constant reading of company filings), I gave this book another try. I completed it and learned a lot. It's very comprehensive in its discussion of corporate finance, investment securities, and investment philosophy. I created my own tumblr detailing the insightful quotes:[...] It's a book that I will re-read again in the near future.

Been looking for this version of Security Analysis for awhile. I’m a CPA by training. This book speak of stuffs beyond text book. It’s a must have for investors and CFO.

A very good read.

Un grande classico della Finanza , assieme all'investitore Intelligente sono assoluttamente da leggere e da capire PRIMA di fare investimenti finanziari in generale , ahhh se solo l'avessi letto a 20 anni...

O livro é um dos mais aclamados em finanças e vem em sua melhor versão, segundo comentários a 2º edição é a melhor pois tem maior conteúdo e quantidade de capítulos, o livro te dá dicas de onde buscar ações e como pensar perante o valor intrínseco dela. A versão é em inglês, mas se você quiser investir bem tem que tentar buscar este livro, ele{o livro} se tornou muito aclamado pelo Warren Buffett e o livro contém grandes princípios do gênio dos investimentos em ações. É mais que um complemento do investidor inteligente é a versão completa e comentada deste.

A masterpiece. But readers are expected to have some basic knowledge of finance