Security Analysis


Security Analysis
David Dodd and Benjamin Graham

“A road map for investing that I have now been following for 57 years.”
–From the Foreword by Warren E. Buffett

Widely regarded as the fundamental text for the analysis of stocks and bonds. It is shares the title of the bible of value investing with the Intelligent Investor.

Disclaimer: Personal Review below
A more technical book then the Intelligent Investor as it more deeply dives into the intricacies of valuing various securities including common stock and bonds. Benjamin Graham preaches that, “An investment operation is one which upon thorough analysis promises safety of principal and an adequate return.” This book provides the in depth framework to make that a reality. This book is not for the beginner nor someone who is turned off by chapters on how to value corporate bonds nor preferred stock. If one needs help with the basics of interpreting financial statements for corporate valuation then I suggest The Interpretation of Financial Statements also by Benjamin Graham.

That being said I find the advice time-less and a few times had my spine chill. An example would be during a rereading after the 2008 financial crisis I found my spine chilled when I found Benjamin Graham’s advice to question the values given to mortgage backed securities because they had no basis.

Decades before Graham was teaching you what to watch out for then.

It wasn’t a coincidence that JP Morgan made it through the financial crisis better then all but perhaps Wells Fargo and that Chairman Executive Officer of JP Morgan, Jamie Dimon wrote the foreword for the new addition of this book.