Reilly and Brown vs. Graham?

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nyfinance

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Hi, is anyone familiar with Investment Analysis and Portfolio Management? I've been studying it for the past month and it's pretty well-organized. But I've also heard that Securities Analysis by Benjamin Graham is the "bible" of equities.

Has anyone had experience with these books, and/or could recommend other good technical sources on equity analysis?

Thanks.
 
Benjamin Graham's book is the bible for value investing, I'm told that its still required reading at Columbia Univ (his alma mater), but I'd say its not that practical because there is the growth stock side that it completely ignores. For modern portfolio management youre better off reading anything that covers indepth Markowitz portfolio theory, and later advancements by William Sharpe. I like Modern Portfolio Theory and Investment Analysis by Elton
 
nyfinance Wrote:
-------------------------------------------------------
> Hi, is anyone familiar with Investment Analysis
> and Portfolio Management? I've been studying it
> for the past month and it's pretty well-organized.
> But I've also heard that Securities Analysis by
> Benjamin Graham is the "bible" of equities.

Are we familiar with it? Well most of us should be, because it was a required CFA book for a long time. Obviously Graham is Graham.
 
For stock selection, I find Security Analysis much more informative. Reilly and Brown present modern approaches, so their book is also pretty decent. However, I found R&B too theoretical in that they focus on EMH.
 
I think it makes sense to examine the intended purposes for any works which are to subject to comparative evaluation.

The Reilly and Brown text, according to the Preface of my 6th edition, "is addressed to both graduate and advanced undergraduate students who are looking for an in-depth discussion of investments and portfolio management. The presentation of the material is intended to be rigorous and empirical, without being overly quantitative."

The Preface of Security Analysis, 1st edition, reads in part that "This book is intended for all those who have a serious interest in security values. It is not addressed to the complete novice, however, for it presupposes some acquaintance with the terminology and simpler concepts of finance. ... It deals not only with methods of analyzing individual issues, but also with the establishment of general principles of selection and protection of security holdings. Hence much emphasis has been laid upon distinguishing the investment from the speculative approach, upon setting up sound and workable tests of safety, and upon an understanding of the rights and true interests of investors in senior securities and owners of common stocks."

These quotations alone, I think, are sufficient for you to reason that the works are better thought of as complements rather than alternatives.
 
For what they are worth, here are some more facts and opinions (which I will clearly distinguish :) regarding Security Analysis that may be of interest to aspiring readers.

In my opinion, the longevity of the Security Analysis work has resulted primarily from continued recognition of Mr. Benjamin Graham's genius as its principal author supported by Mr. David Dodd (a very, very smart investor in his own right).

McGraw Hill has published Security Analysis in five editions spanning over 50 years.
1st edition published 1934
2nd edition published 1940
3rd edition published 1951
4th edition published 1962
5th edition published 1987

In my opinion, the first four Security Analysis editions are best viewed as balance-sheet-like snapshots of Graham and Dodd's genius as it observed and interacted with the dynamic securities markets across that historical period. Mr. Graham died in 1976 -- the 5th edition has no authorship by Mr. Graham and reads quite differently from the first four.

I personally have found Janet Lowe's book "Benjamin Graham on Value Investing" to provide a rather helpful context in reading Security Analysis.
 
masamunexs wrote:
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> Benjamin Graham's book is the bible for value
> investing, I'm told that its still required
> reading at Columbia Univ (his alma mater), but I'd
> say its not that practical because there is the
> growth stock side that it completely ignores.

As yields on stocks dropped dramatically throughout the 1950s to lows that had never been seen before, Messrs. Graham and Dodd shrewdly recognized that the equity market increasingly favored growth. Actually, their insight regarding this trend and its implications is a rather distinguishing feature of the 4th edition of Security Analysis.
 
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