Security Analysis: Principles and Techniques

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.

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.

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.