Security Analysis: The Classic 1940 Edition

by Graham, Benjamin; Dodd, David

• ISBN13: 9780071412285
• ISBN10: 007141228X
• Edition: 2nd
• Format: Hardcover
• Copyright: 2002-10-31
• Publisher: McGraw Hill

Summary

"Graham's ideas inspired the investment community for nearly a century."--Smart Money"Graham's method of investing is as relevant today as it was when he first espoused it during the Roaring Twenties."--Investor's Business DailyBenjamin Graham's revolutionary theories have influenced and inspired investors for nearly 70 years. First published in 1934, hisSecurity Analysisis still considered to be the value investing bible for investors of every ilk. Yet, it is the second edition of that book, published in 1940 and long since out of print, that many experts--including Graham proteacute;geacute; Warren Buffet--consider to be the definitive edition. This facsimile reproduction of that seminal work makes available to investors, once again, the original thinking of "this century's (and perhaps history's) most important thinker on applied portfolio investment."

Author Biography

Benjamin Graham was a seminal figure on Wall Street and is widely acknowledged to be the father of modern security analysis. The founder of the value school of investing and founder and former president of the Graham-Newman corporation investment fund, Graham taught at Columbia University's Graduate School of Business from 1928 through 1957. He popularized the examination of price-to-earnings (P/E) ratios, debt-to-equity ratios, dividend records, book values, and earnings growth, and also wrote the popular investors' guide The Intelligent Investor.

David Dodd was a colleague of Benjamin Graham's at Columbia University, where he was an assistant professor of finance.

Table of Contents

Preface to the Second Edition	vii
Preface to the First Edition	ix
Introduction	1	(16)
PART I SURVEY AND APPROACH
The Scope and Limits of Security Analysis. The Concept of Intrinsic Value	17	(14)
Fundamental Elements in the Problem of Analysis. Quantitative and Qualitative Factors	31	(15)
Sources of Information	46	(11)
Distinctions between Investment and Speculation	57	(12)
Classification of Securities	69	(8)
PART II FIXED-VALUE INVESTMENTS
The Selection of Fixed-Value Investments	77	(14)
The Selection of Fixed-value Investments: Second and Third Principles	91	(15)
Specific Standards for Bond Investment	106	(11)
Specific Standards for Bond Investment (Continued)	117	(17)
Specific Standards for Bond Investment (Continued)	134	(11)
Specific Standards for Bond Investment (Concluded)	145	(12)
Special Factors in the Analysis of Railroad and Public-utility Bonds	157	(20)
Other Special Factors in Bond Analysis	177	(7)
The Theory of Preferred Stocks	184	(12)
Technique of Selection of Preferred Stocks for Investment	196	(12)
Income Bonds and Guaranteed Securities	208	(12)
Guaranteed Securities (Continued)	220	(15)
Protective Covenants and Remedies of Senior Security Holders	235	(14)
Protective Covenants (Continued)	249	(12)
Preferred-stock Protective Provisions. Mainteance of Junior Capital	261	(13)
Supervision of Investment Holdings	274	(10)
PART III SENIOR SECURITIES WITH SPECULATIVE FEATURES
Privileged Issues	284	(11)
Technical Characteristics of Privileged Senior Securities	295	(13)
Technical Aspects of Convertible Issues	308	(10)
Senior Securities with Warrants. Participating Issues. Switching and Hedging	318	(12)
Senior Securities of Questionable Safety	330	(13)
PART IV THEORY OF COMMON-STOCK INVESTMENT. THE DIVIDEND FACTOR
The Theory of Common-stock Investment	343	(19)
Newer Canons of Common-stock Investment	362	(10)
The Dividend Factor in Common-stock Analysis	372	(17)
Stock Dividends	389	(12)
PART V ANALYSIS OF THE INCOME ACCOUNT. THE EARNINGS FACTOR IN COMMON-STOCK VALUATION
Analysis of the Income Account	401	(15)
Extraordinary Losses and Other Special Items in the Income Account	416	(11)
Misleading Artifices in the Income Account. Earnings of Subsidiaries	427	(18)
The Relation of Depreciation and Similar Charges to Earning Power	445	(20)
Public-utility Depreciation Policies	465	(14)
Amortization Charges from the Investor's Standpoint	479	(27)
Significance of the Earnings Record	506	(15)
Specific Reasons for Questioning or Rejecting the Past Record	521	(9)
Price-earnings Ratios for Common Stocks. Adjustments for Changes in Capitalization	530	(11)
Capitalization Structure	541	(13)
Low-priced Common Stocks. Analysis of the Source of Income	554	(13)
PART VI BALANCE-SHEET ANALYSIS. IMPLICATIONS OF ASSET VALUES
Balance-sheet Analysis. Significance of Book Value	567	(11)
Significance of the Current-Asset Value	578	(16)
Implications of Liquidating Value. Stockholder-management Relationships	594	(17)
Balance-sheet Analysis (Concluded)	611	(24)
PART VII ADDITIONAL ASPECTS OF SECURITY ANALYSIS. DISCREPANCIES BETWEEN PRICE AND VALUE
Stock-option Warrants	635	(13)
Cost of Financing and Management	648	(11)
Some Aspects of Corporate Pyramiding	659	(10)
Comparative Analysis of Companies in the Same Field	669	(15)
Discrepancies Between Price and Value	684	(20)
Discrepancies between Price and Value (Continued)	704	(25)
Appendix	729	(102)
Index	831