Security Analysis\' Has Been Current for More

¶ … Security Analysis' has been current for more than 60 years. Graham and Dodd are not only astute observers but also veterans in the field of investing. They have seen investment markets and businesses plunge and raise themselves and have observed investor's behavior under all conditions.

Although their books are classics, Graham and Dodd manage to write in a clear and contemporary style that is just as applicable today as it was then. They provide details and techniques for achieving success as investors as well as the responsibilities of businesses to be transparent about the affair of their businesses for shareholders and potential investors.

The brunt of the book, however, is its timeless advice to students that careful assessment and review of balance sheets is the essence and key to success in investment.

The fact that Buffet writes that he has been following their "road map" for 57 years and that this is one of the four books that he particularly treasures is acclaim enough. Buffet writes that he built his decisions upon review of this book after having read every single other book on the subject in the Omaha Public Library.

Graham and Dodd preface their book with the observation that four factors are involved in answering question related to investing and these are:

1. The security of the investment; (2) the price; (3) the time; and (4) the person (p.13).

2. The question, in short, is: "should security S. be bought (or sold, or retained) at price P, at this time T, by the individual I" (ibid). The rest of their book then elaborates in various and profound ways on this particular questions.

The various issues are clearly subtitled and broken into discrete and orderly chapters with a summary following each. Graham and Dodd provide many examples along the way extracting -- and this is also where they stand out from contemporary books on the subject -- from their long experience as investor going way back to the 1920s. This tendency of theirs, in fact, to reinforce their text with examples from so long ago (as, for instance, to quote the value of real estate in New York in 1929 as example of investments made on unsound terms) give it an archaic air, but this does not matter. They also thoroughly spell out terms, which is what I like.

Another fact that I find helpful is their tendency to here and there break off and present principles that they consider useful for the student. Throughout in fact, they are speaking to the student.

Almost remarkable is their bias toward quantitative element, even thoguh they dutifully mention the qualitative aspect.

The foreword comments that "just as value investing never goes out of style', so too has the value of this "investor's bible" never declined. Graham is credited with transforming the field of financial analysis from a business subject to a science with his creative methods and quantitative algorithms.