The Interpretation of Financial Statements
||List Price: $30.00
Amazon.com Price: $21.00
- Media: Hardcover
Publisher: HarperBusiness (15 January, 1998)
- Average Customer Review:
Based on 6 reviews.
Amazon.com Sales Rank: 624
Why This Edition Instead of 3rd/4th Edition?
Why they republished this edition when they might have republished the Second or Third Revised Edition (by Graham and Charles McGolrick, published in 1964 and 1975, respectively) beats me. The latter two editions are unquestionably better,as both are more current, and contain more useful tips regarding contextual interpretation.
It's true that the primary value of Graham's text is its framework, which provides concision in summarizing a potentially confusing topic. This framework persists through all four editions. Also, it's true that all four editions are pretty dated (there is no discussion of cash flow statement interpretation in any edition obviously, for example, although Graham alludes to the significance of cashflow interpretation somewhat disparagingly in the latter editions).
But all of Graham's guidelines for balance sheet analysis are still current in the latter two editions, as are his brief guidelines for bond analysis and earnings power. The first edition seems less useful in these respects.
One might assume that there is value in going back to the first edition of this small volume as one might go back to the first edition of Security Analysis. There are indeed nuggets in the first edition of Security Analysis which have been mysteriously removed from later editions. But that isn't true with The Interpretation of Financial Statements. If you can get your hands on a copy of the 1964 or 1975 edition of this book, you will likely find either more useful than this original edition.
For the novice or the professional - this short, concise book is worth it's price.
Ben Graham was the author of many books and the voice of sound advice, his principles are not dated even today.
This is my investing bible
Although corporate 10Q's have become more complex due to a lot of the offbalance sheet investments they do, e.g. Enron. If a company is honest and has value this book will help you find it. So the way I approach my investing I have to assume all companies are honest unless proven otherwise.
So much time is taken to explain diversification by many other books, but none gives you the practical expertise to make an informed decision. This book does. It is a handy reference that sits on my desk. I use it to review annual reports and to interpret online SEC filings just to make sure the companies I have invested in are actually healthy.
This book is small, but what I have found over the years is that smaller books are better. They leave out the fluff and all you get are the meat and potatoes of what you need to know.
If you take your time to understand the information presented and use it, you'll be teaching your broker a thing or two at the end of the day.
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