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Walter Schloss: Benjamin Graham and Security Analysis: A Reminiscence

September 11, 2008

Ben Graham was an original thinker as well as a clear thinker. He had high ethical standards and was modest and unassuming. He was one of a kind. I worked for him for nearly 10 years as a security analyst.

In re-reading the preface to the first edition of Security Analysis, I am impressed all over again with Ben’s views. I quote . . . “[W]e are concerned chiefly with concepts, methods, standards, principles, and above all with logical reasoning. We have stressed theory not for itself alone but for its value in practice. We have tried to avoid prescribing standards which are too stringent to follow or technical methods which are more trouble than they are worth.”

Security Analysis says it all. It is up to analysts and investors to put Ben’s ideas into practice.

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Rating: 4.6/5 (10 votes)


Youngwk - 9 years ago    Report SPAM
There are several editions of "Security Analysis". Each one is heavy reading. If I were to pick one to read, which edition would the learned people here recommend?

Thank you.
Augustabound - 9 years ago    Report SPAM
IIRC, Buffett calls the '40 edition the best.

I think the '40 and '51 are the most common.
Abeck - 9 years ago    Report SPAM
Thank you for that very nice piece.

Earlier this summer. somebody on this website posted an article which asked: "Everyone owns Security Analysis, but has anyone ever read it?" I laughed at that comment, knowing its truth as it applied to me.

So, I went to Europe last month, and with me I took the original 1934 version of Security Analysis. My wife laughed at me for doing so - - this was supposed to be a family vacation - - and not a cheap or easy one either.

As I read it, I kept giggling to myself, and at one point out loud.

"What is so funny?", she asked. My response:

"Well, your not going to believe this, but this whole credit crises, the entire meltdown of the mortgage market, overleverage, muni bond values and the results for those holding these credits, well, this guy Ben Graham is talking about all that here in the first 100 pages of this book published 70 years ago. And I have owned this book for 10 of those years, and never read it."

So, for a good time and a fun look at what you should have known, and could have known, pickup the latest copy of the 1934 edition, or re-read it again, and treat yourself to a repeat of history courtesy of non other than the esteemed...

Benjamin Graham

(maybe I should read Einhorn's book now, so I don't have to write another post like this...)
Evan - 9 years ago    Report SPAM
I have the '51, but I'm not sure how it stacks up against the others. Its a good read, minus the 1950s accounting.
Batbeer2 premium member - 9 years ago
maybe I should read Einhorn's book now, so I don't have to write another post like this...

(re)read Fischer's common stoks and uncommon profits. I had the same experience with my wife. Different book though. It could have been published 12 months ago and he would be famous today as a result :-)

Fischer is considered the father of growth investing. Graham is the father of value investing.

IMO the most important quality they share(d) is discipline.
Youngwk - 9 years ago    Report SPAM
IIRC, Buffett calls the '40 edition the best.

Thank you for your recommendation. Unfortunately, I cannot find this version in the local library. I have heard recommendations that the best editions are the 1st and 2nd editions. Has anyone here read (or at least browse through) most of the editions?
Augustabound - 9 years ago    Report SPAM
I asked a similar question a while back,http://www.gurufocus.com/forum/read.php?2,14474,page=1

Another thread here that might help, http://www.gurufocus.com/forum/read.php?2,31922,31932#msg-31932

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