The intelligent investor VS security analysis by benjamin graham?

Question

Hi,

I am in a dilemma as to which book to buy, "The intelligent investor" or the "security analysis", both by benjamin graham.

I read that the intelligent investor, written by benjamin graham, was the main essence of his book "security analysis". If one wish to learn more, he/she then should go for "security analysis". Since the content of "the intelligent investor" is in "security analysis", shouldn't one just buy the latter?

Then the next question is, which edition of the two books gives a better explanation and picture to graham's work?

For eg. the latest "intelligent investor" comes with the commentary by jason. I am quite concerned about graham's content in that book. Has his content been filtered a bit, or has it been untouched like his first book? This of course applies to security analysis, though i believe the first version is never to be found. In that case, is the 2nd edition better in any way?

Thanks.

Answer 1

You are asking a very difficult question.  The Intelligent Investor was designed for the average person.  Security Analysis is designed as a text book.  They are different because the goal and audience are different.  Both books were published periodically from the nineteen thirties until the early seventies.  An updated version of Security Analysis was published under new authorship but jointly with David Dodd, the coauthor of Graham's Security Analysis.

I would say as an illustration the Intelligent Investor is a better read, as a how to, Security Analysis is a better read.  The only limitation of both is that accounting standards and legal structures have changed so both books are somewhat insufficient at this point, except as starting points, for which they are still great.

Answer 2

Forget about individual stocks.

Use low-cost Vanguard Index funds.

Create a diversified portfolio of US stocks, US bonds,

International stocks, International bonds, Emerging markets stocks, REITs, Gold, commodities.

Periodically rebalance your portfolio.

Sleep well in the night.