22 of 24 people found the following review helpful
For the experienced and dedicated.,
This review is from: Security Analysis: Sixth Edition, Foreword by Warren Buffett (Security Analysis Prior Editions) (Hardcover)
This book is not a step-by-step tutorial on how to invest, but a lengthy philosophical outline of 'value investing' along with numerous real-world examples, which although they are 70 years old are still materially valid today. You will need to understand accounting and how to read financial statements before reading this book, and good experience in security analysis is also recommended. Even so, the book is lengthy and takes time and effort to read. Is it worth it? Well, it was a valuable read for me because I am serious about my investments, but for someone who just wants a quick-and-dirty guide this book is not for you.
The one big difference between the application of Security Analysis in Graham's days and now is probably the advent of cash-flow statements which makes analysing a company's true earnings easier.
Concerning the differences between this edition and previous editions, there are essays from various money managers in this edition but some rather important chapters from the original book have been removed to make room for these essays (the missing chapters can be found on the enclosed CD.) Some of these new essays are informative and well-written, others less so. Overall I would probably have preferred essays similar to those found in the updated version of Graham's book The Intelligent Investor, which were detailed modern-day analogies of Graham's examples. There are also some erroneous page references here and there in this edition of Security Analysis.
All in all, if you already have an earlier edition of Security Analysis you'll probably not find anything truly worthwhile here. If you don't own a previous copy of Security Analysis, and you're serious about your investing and can devote the time and effort to reading this book (or at least the parts that are relevant to you), then it's recommended as a solid foundation for the 'value' approach to investing. In fact, when you start thinking like Graham you understand that 'value investing' is the only true way of investing, as opposed to speculation.