The 1951 edition is supposed to be better than the 1940 edition. Looking forward to finding out why.

http://imeducatingmyself.com/security...

This book is one the most recommended books when it comes learning about investing, and after reading it I now understand why does it get so many recommendations. Book is focused on helping us to learn about investing in Stocks and Bonds. Since I’m more interested in learning about investing in stocks rather than bonds, I will be more focused on covering that part in further review.

There are 4 ways of investing in stocks that I learned from this book:

Researching Stocks and Finding Bargains
This method is good method, but you’ll have to learn a lot about how to do research and find good companies at good prices. Inside the book author has suggested to looking at the Balance Sheet of the company; see what is Assets/Debt ratio, what is overall performance of the company; what are future plans for the business etc. You really need to understand overall business principles and that industry to have better understanding of what you’re reading. Problems might occur when management of the company can make misleading information about the state of the company through the accounting.
There are so many factors that needs to be look out for when doing these type of researches and experience in any particular filed is a must have. Not all publicly traded companies managers and board of directors, CEO’s are working to benefit the shareholders and investors – that is something to keep in mind. The book offers some formulas and examples on how to look into Balance Sheets and calculate the Book Value of the Stock.
Business Cycles
This second type of investing is watching on the business cycle turnaround of one particular company, watching on the price of the stock, looking at what problems has occurred and why the stock price if failing. We all know that businesses went to cycles, it’s something that can’t be avoided; companies can’t maintain their growth forever – there’s simply the period of time when business will get through ruff periods and that is when we can look for our opportunity to invest. It’s important to not to speculate on the price of that stock, don’t get into “Buy Low, Sell High” and just get into buying the stock when you see that the price is fallen. There’s a reason why the stock price is down, and for how long will it go down. Don’t get yourself into “Dollar cost averaging”, because might dig yourself a grave doing that – because you simply don’t know for how long the price will go down, and how long will it take for that price to recover. Take some examples of stock prices from Dot Com bubble, majority of good companies still haven’t reached the prices from back than. So, it’s important not to speculate.
You need to keep watching what is CEO and management doing; are they focused on resolving the occurred issues, what are they planning to do, how the are planning to execute those plans, how long will it take them to do it. If you see that CEO and management are interested in making the company get back on their feet, that you can’t take in consideration to invest in that company, you just have to wait the right moment to invest it. If you see that CEO and management are only interested in in their personal well being, and how to use company to make them self wealthier at the cost of shareholders and employees, than you might want to skip investing in that company.
Stock Market Cycles and Recession
Reading through this book I got the feeling that the Graham and Dodd made the best money through the recession. This is the time where you can buy cheap stocks of good companies, but it does get with a greater risk. This comes down to really do research, create list of companies in which you are interested and keep watching them. You need to watch out what CEO and management of those companies are doing to get through difficult times. Good companies went bankrupt because they don’t have solution on how to sustain the business. That’s why it’s important not to get into buying as soon as the stock prices starts to go down. Choosing right type of companies and keeping those stock in your portfolio for the next 5-10 years seems like the best opportunity if things done properly and risk well managed.
Stock Buybacks
This is also mention in the book as good opportunity to cash in. Companies that are doing well and want do get more control over their business organize stock buyback – which leads to less stocks available in circulation, and price of those that are available will go up. But there are examples that is not that simple, and you shouldn’t went to buy stocks of every company that announce stock buyback. The problem will occur if the CEO and directors board have a large holding on them. They can manipulate prices like this, investors will start buying stocks and push the price up while the management of the company will start selling their share and capitalize on that. Eventually majority of people would end up with stocks that are worth less than they actually had paid for them.
To sum this up, this book really opened my eyes about so many bad things in the stock market, and overall financial industry – and to not end up burned, I need to learn even more. I would suggest to other to read this book, because it is excellent reading material. One small thing is that, there’s a lot old examples from 1920-1930 even if it’s revised edition; but still, there are so many things repeating itself through history it’s not bad to learn from the past.

This is probably the most famous book of all books in the investment arena, quoted as one of the most important books by several investment legends like Warren Buffet. Buffett who had Graham as a teacher, and who was his favourite student earning the highest grade was the only one to have been given an A+. After he graduated Buffett went on to work for Graham’s fund.

The first edition was written in 1934, at the depth of the depression, which inspired Graham to search for a more conservative, safer way to invest. Graham agreed to teach at Columbia University with the stipulation that someone took notes. Dodd, then a young instructor at Columbia, volunteered. Those transcripts served as the basis for this book that “created” the concept of value investing. The second edition is a slight update, and considered by many to be the best. However, it’s over 70 years old, and personally I have always felt it rather dated and there are numerous other more modern value investing books that are easier to relate to. That’s why when this book, the 6th edition, arrived in 2009 I jumped with joy since almost everyone who is anyone in the value investing arena has contributed personally. Warren Buffett has written the foreword, Seth Klarman is the editor writing an excellent preface, and finally James Grant writes an intriguing introduction. Then follow comments from various famous people, putting Graham’s theories into a current setting.

The book has eight parts, and the mission is Security Analysis, securities meaning stocks, bonds and variations of that. Roughly half of the book deals with stocks, and the other bonds etc. I think it’s enough to read part 1 – the essential lessons and part 5 – analysis of the income statement, if you are focused on stocks. The rest is either not equity related or to detailed and frankly sometimes boring. However the introduction to each chapter by current superstars is an easy must read. They give an up to date view on each part, its relevance today, where they agree and disagree, and how they use it in their current business. I would highlight Howard Marks text on bonds, Bruce Berkowitz who writes about stock dividends, and finally Bruce Greenwald who writes about the balance sheet and implications on valuation.

There is a wealth of timeless advice in the book, to me the following are among the simplest and most practical ideas Graham has. With regard to timing: “It is our view that stock market timing cannot be done unless the time to buy is related to an attractive price level, as measured by analytical standards.” He went further suggesting that “the investor should calculate a normalised earnings number, based upon the history, last 5- 10 years, and a conservative estimate on the future.”

Everyone is a product of the time that we live in. Clearly Mr Graham was no exception. He was born in 1894 and his family was ruined in the crash of 1907. He graduated from Columbia 1914, worked as an analyst, followed by starting an investment firm (Graham & Newman) in 1926. His work before the crash indicates that he was a conservative investor already before the market crash 1929, but the depth of it clearly also took him by surprise. He lost a lot of the money and some even suggest he was ruined. Jason Zweig, the editor of the second edition, says he lost 70% 1929-1932. From then his Graham-Newman corp had 14.7% annual return 1936-1956, vs market 12.2%, it was a fund closed to outside investors, (pre 2/20 fees it was >20% per annum). But as he grew older he changed his mind a bit. In the 70s he stopped advocating a use of the techniques described in his text in selecting individual stocks, citing the extensive efforts and costs required to generate superior returns in a modern efficient market. His way of finding bargains became more difficult, but this wasn’t a problem for his A+ student. Warren Buffett quickly adopted reading one more book, Philip Fishers, Common Stocks and Uncommon Profits. The result is investment history.

Look it's a decent book, but at 80-90 years old the original content is significantly outdated, meaning that much of the value comes from the largely excellent new commentaries from Seth Klarman etc (in the seventh edition). And as the book is 1,200 pages long (most of which is the original stuff) and costs about £45-£80, that's an important thing to be aware of. I'd say it's only for hardcore investment readers, and even then don't go expecting great returns on the time it'll take you.

Amazing classic.

So much unexpected wisdom. His grasp of investor psychology remains as relevant as ever. It was also shocking for me to see that a lot of the valuable advice in Greenblatt's Stock Market Genius already appeared in Security Analysis published many decades earlier (for example, not buying securities going into bankruptcy proceedings but rather coming out of it).

More detailed review can be found here: https://medium.com/mastering-investing

I first read this book in 2007 when I was new to investing. Like most of us, I found it very hard to follow. The concepts seemed very dry to me. I kept coming back and reading again. Each time I read the book I seemed to understand little bit more. After almost 10 years I can say that I am somewhat well versed with it now. In order to help other new readers I have written a study guide that can help anyone understand this book better.

It is called "Security Analysis - Study Aid, Notes and Quiz Questions" . You can find it in Amazon.com
https://www.amazon.com/Security-Analy...

Hope you guys find it useful

This book gives you a comprehensive understanding of the differences between investing and speculation.

Next, it explains to you the factors of a worthy security to consider and analyze

Third, Graham also taught about some useful document and sources of information for investors.

Last but not least, if you're interested in how a stock market described and worked, Graham would talk in details

Update: it is not so much applying in my market i am buy and sell now

I'm probably the only person I know that could enjoy this book, but nonetheless, I found it very entertaining, despite its length. Don't read this unless you are very interested in the capital markets, though. It would be very boring.

This edition keeps the spirit of Graham and Dodd's seminar work. I felt however that the new chapters don't add as much value as expected.

One of the best books that I have ever read. From start to finish.
If one person has basic knowledge and understanding of the financial world then the book is going to be understandable.
The way it is written is amazing, there is a clear line from start to finish and clear line of thought.

Simply put...amazing read for those of financial knowledge and for those who want to understand how proper financial work should be done!

I'm no investor, but I enjoy keeping up with the markets the same way some baseball fans like digging into stats and nerding out on numbers. And that's why I decided to pick up this book and start learning more about value investing from a classic source.

Holy crap, I couldn't put it down and was surprised at just how simple it was. Now I do have training and experience as an accountant, so I wasn't worried about jargon or complicated math... more often than not the math and terms used in the financial industry are employed to turn relatively simple concepts into seemingly complicated and scientific ideas. Surprisingly, this book had almost none of that "look how smart my financial ideas are" type of vibe to it. It had very little jargon beyond the very basic stuff you'd learn in high school economics. I mean there is nothing here but practical advice that anyone should be able to understand.

risk is unavoidable, diversify, dividends are good, look for intrinsic value but still consider the price of common stocks in your final decision... stuff that I think we now take for granted as common sense, but in 1934 was still not lay knowledge.

Overall, if you're like me and want to learn from the ground up, and are more interested in theory, this is the very foundation of contemporary value investment theories

Absolutely fantastic stuff especially by contributing authors like Warren Buffet, Seth Klarman, etc If you have spent some time in the investing arena and feel out of touch with concepts and thoughts, here we go...