Security Analysis (book)

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Security Analysis
File:Security analysis.jpg
Author Benjamin Graham and David Dodd
Country United States
Language English
Subject Finance, Investing
Publisher Whittlesey House, McGraw-Hill Book Co.
Publication date
Pages 725
ISBN 0-07-144820-9 (2005 edition)
OCLC 2140220
332.63/2042/0973 22
LC Class HG4521 .G67 1934

Security Analysis is a book written by professors Benjamin Graham and David Dodd of Columbia Business School, which laid the intellectual foundation for what would later be called value investing.


The work was first published in 1934, following unprecedented losses on Wall Street. In summing up lessons learned, Graham and Dodd scolded Wall Street for its focus on a company's reported earnings per share, and were particularly harsh on the favored "earnings trends." They encouraged investors to take an entirely different approach by gauging the rough value of the operating business that lay behind the security. Graham and Dodd enumerated multiple actual examples of the market's tendency to irrationally under-value certain out-of-favor securities. They saw this tendency as an opportunity for the savvy.

Current Use

The book represents the genesis of financial analysis and corporate finance. However, by the 1970s, Graham stopped advocating a careful use of the techniques described in his text for security analysts in selecting individual stock investments, citing that "in the light of the enormous amount of research now being carried on, I doubt whether in most cases such extensive efforts will generate sufficiently superior selections to justify their cost. To that very limited extent I'm on the side of the "efficient market" school of thought now generally accepted by the professors."[1] Graham stated that the average manager of institutional funds could not obtain better results than stock market indexes, since "that would mean that the stock market experts as a whole could beat themselves — a logical contradiction".[1] Regarding portfolio formation, Graham suggested that investors use "a highly simplified" approach that applies one or two criteria to security prices "to assure that full value is present", relying on the portfolio as a whole rather than on individual securities.[1]

Domestic editions of Security Analysis

  • 1st ed. (1934) Whittlesey House (the trade division of McGraw-Hill) - LCCN: 34023635
Black bound cover (1st printing) was printed by The Maple Press Co., York, PA, for a small distribution in the United States
Maroon bound cover (2nd printing) was published that same year for sale abroad, The Maple Press Co., York, PA
  • 2nd ed. (1940) McGraw-Hill - LCCN: 40013028
  • 3rd ed. (January 1, 1951) McGraw-Hill (last edition while Graham & Dodd were faculty members of Columbia) - LCCN: 2005270180
  • 4th ed. (1962) McGraw-Hill (last edition by Graham & Dodd) Charles Sidney Cottle (1910–1987) joins as coauthor - LCCN: 62017368
Reprint 3rd ed. (May 1976) McGraw-Hill - ISBN 0-07-023957-6
Reprint 1st ed. (October 1, 1996) McGraw-Hill - ISBN 0-07-024496-0
Reprint 1st ed. (February 1, 1997) McGraw-Hill - ISBN 0-07-024497-9
Reprint 2nd ed. (October 10, 2002) McGraw-Hill - ISBN 0-07-141228-X
Reprint 3rd ed. (December 10, 2004) McGraw-Hill - ISBN 0-07-144820-9
Limited Leatherbound Edition (September 19, 2008) McGraw-Hill - ISBN 0-07-162357-4

See also


  1. 1.0 1.1 1.2 Financial Analysts Journal. A Conversation With Benjamin Graham. 1976.

External links