Security Analysis: The Classic 1934 Edition

This is the a must read for any investors. It is, however, quite difficult for beginners to comprehend, though. At least I didn't understand it quite well until after I took Corporate Finance, Accounting, etc... and studied for my CFA exam. I'd recommend beginners read Graham's "The Intelligent Investor", which help create a concrete basis of your investment philosophy.

For those interested in learning and understanding valuing investing in an indepth technical way, this book is for you. Its depth and breadth of coverage is very impressive. Graham puts forth all arguments on investing techniques and then shows, through detailed worked examples, why value investing provides the most consistent and obtainable above average results.Be warned though, this book is not for the faint hearted. It can become quite complex at times, and a reasonable level of knowledge within finance and accouting would be most beneficial to anyone reading this book. I would also recommend that readers buy Graham's other book, The Intelligent Investor, first before reading this, as it provides an excellent foundation for tackling the value investing techniques found in this book.This first half of the book focuses on bond and preffered issues. This section is dry and tedious at times, but the groundwork it lays as a point of departure for studying common stocks means it really is necessary to read. But it's well worth it, the last half of the book or so is devoted to common stock investment and here is where Graham shows his true genius and value investing becomes a clear and logical process.It's well worth your time and your money.

If you have read The Intelligent Investor, and want a text that will expand and delve deeper into fundamental analysis, this book is for you. The separation between this book, and books similar in content, is the fact that Graham shows examples of his applied techniques. The book is broken down into two main sections, fixed value investments(bonds, preferred stocks, ect.) and common stock analysis/selection. He takes you step by step through income statement and balance sheet analysis. Graham is wary of coporate reports, especially when it comes to earnings, and points out coporate trickery to watch out for and avoid. The topics are detailed, and the exaples extensively researched. Overall, Security Analysis is a mixture of art and scienece that lays a timeless foundation for financial analysis.

Someone wrote reviews to this book indicating that the major downside to it is its age. The book was written in 1934 therefore it misses all the modern developments of finance - modern portfolio theory for example - and all the new techniques that Wall Street "experts" use today.As an answer I give an anecdote from Warren Buffett's life:When stock investments started to become popular, the volume increased ten fold, and the modern techniques to make a profit were developed, Warren Buffet was extremely worried. He remembered what happened in 1929. He loathed the new trends in investment that tried to predict the future price of a stock. Therefore he had a meeting with all his fellow Graham students, he expressly forbid to bring anything newer than the 1934 edition of Security Analysis.This happened decades ago, but history repeats. We all know what happened 3 years ago. We all know how "experts" thought that the market was booming, and how they let it crash. We all know how they made a profit on the money that private investors lost.Nowadays when I go shopping for a book I always look at the date of pubblication, if it is between 1997 and 2000 I'm very wary. All those books about "new economy", "digital era", "e-commerce", "dot coms", etc. have to be taken with the maximum attention. Usually they contain a lot of inflated ideas that as we look at what happened after they were written we understand how much those "experts" really understand about stock investments.If they were wrong then, why should they be righ now?Trust me, but more importantly, trust Graham, trust Buffett, (those that have been consistently right for 50 years) this is the book to buy, "anything newer looks suspicious."

Graham is a patient logical thinker who explains his methods meticulously.Don't look here for a get rich quick scheme.If you love the markets, and already have a basic knowledge of stocks and bonds,this book will give you a good base of reference to discern true value and keep from being caught up in the latest fad.Written with the benefit of hindsight after the Crash of 29,it is a must read.It is not light reading,yet sticking with it proves very rewarding.