 |
The Interpretation of Financial Statements by Benjamin Graham, Spencer B. Meredith
Book Summary InformationAuthor: Benjamin Graham, Spencer B. Meredith Introduction: Michael F. Price Edition: Hardcover Audio: English (Unknown); English (Original Language); English (Published) Published: 1998-01-15 ISBN: 0887309135 Number of pages: 144 Publisher: HarperBusiness
Book Reviews of The Interpretation of Financial StatementsBook Review: Meet the father of value investing... and Warren Buffett's mentor Summary: 5 Stars
"In 1984, [Warren] Buffet returned to Columbia to give a speech commemorating the fiftieth anniversary of the publication of "Security Analysis". During that speech, he presented his own investment record as well as those of Ruane, Knapp, and Schloss [other successful investment managers who were students of Graham at Columbia]. In short, each of these men posted investment results that blew away the returns of the overall market. Buffett noted that each of the portfolios varied greatly in the number and type of stocks, but what did not vary was the managers' adherence to Graham's investment principles."
It is difficult to encapsulate Benjamin Graham's investing style in a few sentences or paragraphs. Readers are strongly urged to refer to his "The Intelligent Investor" to obtain a more thorough understanding of his investment principles.
In brief, the essence of Graham's value investing is that any investment should be worth substantially more than an investor has to pay for it. He believed in thorough analysis, which we would call fundamental analysis. He sought out companies with strong balance sheets, or those with little debt, above-average profit margins, and ample cash flow. (For more insight, see Introduction To Fundamental Analysis and Testing Balance Sheet Strength.)
He coined the phrase "margin of safety" to explain his common-sense formula that seeks out undervalued companies whose stock prices are temporarily down, but whose fundamentals, for the long run, are sound. The margin of safety on any investment is the difference between its purchase price and its intrinsic value. The larger this difference is (purchase price below intrinsic), the more attractive the investment - both from a safety and return perspective - becomes. The investment community commonly refers to these circumstances as low value multiple stocks (P/E, P/B, P/S).
Graham also believed that market valuations (stock prices) are often wrong. He used his famous "Mr. Market" parable to highlight a simple truth: stock prices will fluctuate substantially in value. His philosophy was that this feature of the market offers smart investors "an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal."
Summary of The Interpretation of Financial Statements"All investors, from beginners to old hands, should gain from the use of this guide, as I have." From the Introduction by Michael F. Price, president, Franklin Mutual Advisors, Inc. Benjamin Graham has been called the most important investment thinker of the twentieth century. As a master investor, pioneering stock analyst, and mentor to investment superstars, he has no peer. The volume you hold in your hands is Graham's timeless guide to interpreting and understanding financial statements. It has long been out of print, but now joins Graham's other masterpieces, The Intelligent Investor and Security Analysis, as the three priceless keys to understanding Graham and value investing. The advice he offers in this book is as useful and prescient today as it was sixty years ago. As he writes in the preface, "if you have precise information as to a company's present financial position and its past earnings record, you are better equipped to gauge its future possibilities. And this is the essential function and value of security analysis." Written just three years after his landmark Security Analysis, The Interpretation of Financial Statements gets to the heart of the master's ideas on value investing in astonishingly few pages. Readers will learn to analyze a company's balance sheets and income statements and arrive at a true understanding of its financial position and earnings record. Graham provides simple tests any reader can apply to determine the financial health and well-being of any company. This volume is an exact text replica of the first edition of The Interpretation of Financial Statements, published by Harper & Brothers in 1937. Graham's original language has been restored, and readers can be assured that every idea and technique presented here appears exactly as Graham intended. Highly practical and accessible, it is an essential guide for all business people--and makes the perfect companion volume to Graham's investment masterpiece The Intelligent Investor.
|
 |
The Complete Idiot's Guide to Beating Debtby Steven D. Strauss Alpha; Published: 1999-11-18; Mass Market Paperback; BookBest price: $0.01Price in other shops: $16.95
The Complete Idiot's Guide To Wills And Estatesby Steve Maple Alpha Books; Published: 1997; Paperback; BookBest price: $0.01
Financial Management and Recordkeeping: Activity Guide and Working Papers IIby McGraw-Hill Glencoe/McGraw-Hill; Published: 1993-08-26; Paperback; BookPrice in other shops: $21.67
The Panic of 1907: Lessons Learned from the Market's Perfect Stormby Robert F. Bruner, Sean D. Carr Wiley; Published: 2009-04-27; Paperback; BookBest price: $9.37Price in other shops: $16.95
Financial Institutions, Markets, and Moneyby David S. Kidwell, David W. Blackwell, David A. Whidbee, Richard L. Peterson John Wiley & Sons Inc; Wiley; Published: 2008-01-14; Hardcover; BookBest price: $51.69
Financial Accounting: Reporting and Analysisby Earl K. Stice, James Stice, Michael Diamond South-Western College Pub; Published: 2001-12-28; Hardcover; BookBest price: $11.65Price in other shops: $195.95
The Money Book for the Young, Fabulous & Brokeby Suze Orman PBS; Penguin Audio; Published: 2005-03-03; Audio CD; BookBest price: $16.04Price in other shops: $29.95
Money, Banking and Financial Marketsby Stephen Cecchetti McGraw-Hill/Irwin; Published: 2007-08-17; Hardcover; BookBest price: $34.61
Understanding Financial Statementsby Lyn M. Fraser, Aileen Ormiston Prentice Hall; Published: 1997-11-20; Paperback; BookBest price: $31.15Price in other shops: $37.60
Foundations of Financial Management (The Irwin Series in Finance, Insurance, and Real Estate)by Stanley B. Block, Geoffrey A. Hirt Mcgraw-Hill College; Published: 1999-07-01; Textbook Binding; BookBest price: $28.91Price in other shops: $105.80
|
Security Analysis: The Classic 1934 Editionby Benjamin Graham, David Dodd McGraw-Hill; Published: 1996-10-01; Hardcover; BookBest price: $22.86Price in other shops: $60.00
You Can Be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market Profitsby Joel Greenblatt Touchstone; Published: 1999-02-25; Paperback; BookBest price: $7.91Price in other shops: $15.00
Foundations of Financial Management, 14th Edition (Book & Time Value of Money Bind-in Card)by Stanley Block, Geoffrey Hirt, Bartley Danielsen McGraw-Hill/Irwin; Published: 2010-10-04; Hardcover; BookBest price: $144.93
Value Investing: From Graham to Buffett and Beyond (Wiley Finance)by Bruce C. N. Greenwald, Judd Kahn, Paul D. Sonkin, Michael van Biema Wiley; Published: 2004-01-26; Paperback; BookBest price: $4.99Price in other shops: $19.95
Warren Buffett and the Interpretation of Financial Statements: The Search for the Company with a Durable Competitive Advantageby Mary Buffett, David Clark Scribner; Published: 2008-10-14; Hardcover; BookBest price: $12.62Price in other shops: $24.95
The Essays of Warren Buffett: Lessons for Corporate America, Second Editionby Warren E. Buffett, Lawrence A. Cunningham The Cunningham Group; Published: 2008-04-14; Paperback; BookBest price: $24.00Price in other shops: $32.50
One Up On Wall Street : How To Use What You Already Know To Make Money In The Marketby Peter Lynch Simon & Schuster; Published: 2000-04-03; Paperback; BookBest price: $8.40Price in other shops: $16.00
Common Stocks and Uncommon Profits and Other Writings (Wiley Investment Classics)by Philip A. Fisher Wiley; Published: 2003-09-04; Paperback; BookBest price: $11.91Price in other shops: $21.95
Security Analysis: Sixth Edition, Foreword by Warren Buffett (Security Analysis Prior Editions)by Benjamin Graham, David Dodd McGraw-Hill; Published: 2008-09-04; Hardcover; BookBest price: $34.99Price in other shops: $75.00
The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition)by Benjamin Graham, Jason Zweig Collins Business; Published: 2003-07-08; Paperback; BookBest price: $8.92Price in other shops: $21.99
|