Notes to Security Analysis - 2nd and 3rd editions

[vinod1]

If anyone is interested you can view my notes to Security Analysis at

 

http://vinodp.com/documents/investing/security_analysis_index.html

 

I have read Security Analysis several times but did not seem to retain most of what Graham is saying. So about an year back I started going through the book and tried to summarize what he is saying in each chapter. By trying to summarize, it forced me to slow down and really think through the ideas that Graham is conveying. It took me a little over an year to go through the whole book - often re-reading the same chapter again and again and until several of the examples are deeply ingrained in my memory.

 

One of the most surprising things that I noticed is that Graham seldom tried to value a stock! He is more interested in determining why a stock should not be worth less than a certain amount. So instead of saying, I think the stock is worth $40-$80, he is more interested in determining if a stock should not be worth at least $30.

 

His comments on emerging market bonds and why some of the debt of emerging market companies may be safer than the debt of their respective governments even though in theory it should not be the case, is simply far too advanced compared to what is currently being taught in the CFA curriculum. His comments on Bond Insurers and the problems that it could lead to is stunning. His bond equivalent valuation of equity is another very practical tool that is highly applicable in the current environment. 

 

Vinod

[mpauls]

You should really try to get the 4th ed.

[rszutu604]

Thanks, Vinod. I think your notes are great.

[Guest kawikaho]

That is great!  Thanks for posting this.

[txlaw]

Thanks for posting these!

 

Every time I think I will try to read Security Analysis, I flip through the pages at the bookstore, my eyes glaze over, and I immediately put it back down.  I commend you for spending the time to really go through that monster.

[vinod1]

You should really try to get the 4th ed.

 

I skimmed through the 1st and 4th editions as well but I liked the 2nd edition the best. Do you have any particular topic in mind that is dealt with in better detail in the 4th edition?

 

Thanks

 

Vinod

[vinod1]

Thanks for your comments. I have added the complete notes in pdf format as well.

 

Vinod

[JEast]

If one has not read any edition, one should also take a look at the new 6th Edition which I just finished. The introductory sections by guest writers of Warren Buffett, Seth Klarmen, James Grant, Howard Marks and others are small gems in themselves.

 

Plus this edition is somewhat condensed by the editors and includes an attached CD if you would like to read further on the subject.

 

 

Cheers

JEast