Ben Graham's Security Analysis?

[DanielRP]

I understand that Ben Graham's "Security Analysis" and "Intelligent Investor" are classics on the theme of "Value Investing", and I think, after a little research on this strategy, that it is more or less aligned with my own ideas on securities investment, but just how relevant, effective and useful are these two texts today? Is this philosophy practical, successful, and does it require all of one's time to do properly?

Any thoughts and/or opinions on Value Investing and Graham as an expert are welcome here.

Thanks a lot.
Dan.

 

[ROE]

I understand that Ben Graham's "Security Analysis" and "Intelligent Investor" are classics on the theme of "Value Investing", and I think, after a little research on this strategy, that it is more or less aligned with my own ideas on securities investment, but just how relevant, effective and useful are these two texts today? Is this philosophy practical, successful, and does it require all of one's time to do properly?

Any thoughts and/or opinions on Value Investing and Graham as an expert are welcome here.

Thanks a lot.
Dan.

Value stock is part science part art, no one can value it correctly but if you takes time and understand the company and what make a good company
then you are likely to buy into good company and make better return.

The fundamentals in those 2 books are still valid even in today market..some of the information are dated as laws and accounting standard change over the year but if you based your analyst on those fundamental you have a pretty solid base.

another good book is common stock, uncommon profit by Philip Fisher it probably closer to the current environment
http://www.amazon.com/Uncommon-Profits-Writings-Investment-Classics/dp/0471445509

he has a son and his name is Ken Fisher and he a fund manager

 

[cuttlefish]

Yes well worth a read and still of use today. If you apply Grahams strict fundamental based entry and exit criteria its fairly easy to see that there is minimal downside risk and its likely to produce succesful returns and a succesful investment outcome over time. The problem is that in bullmarket phases its very uncommon to find stocks that actually match Graham's criteria, while in bear market phases they become far more frequent.

The most common criticism of Graham's approach would be that the stocks that match his criteria often show little or no price appreciation for long periods of time and so its a slow way to grow an investment portfolio. (the returns often come through dividend stream rather than via price appreciation).

There is no single holy grail of succesful investing - it is well worth spending time understanding how to properly value a business/comppany but it is equally as worthwhile understanding technical analysis and market psychology, as well as money management and risk management principals.

Alongside reading books on fundamentals analysis a book like one of Daryl Guppy's introductory books (I think his intro one is simplyl called 'Share Trading') will give a basic understanding of technical analysis and money management principals.

Getting the overall market and sector trends right tends to be more important than individual stock selection, but understanding how the fundamentals of individual stocks in a sector are behaving can often give some indicators as to which sectors are likely to perform well in the future.

 

[DanielRP]

Thanks a lot guys. I will give them a crack. I figure if they're good enough for Buffett, they should be worth the time for someone like me.