I didn’t get into studying finance until I was in my 30s, but when I did I studied hard and tried to make myself an expert in it. I had to, because I had to teach it. One of the things I latched onto early was the balance sheet. It fascinated me and continues to command my attention. Predictably, when I learned to look at my own personal balance sheet, my personal financial life literally started to come into balance. Continue reading “The Net Worth Mindset”
Tag: income statement
David Abrams sums up Security Analysis the best in his introduction to Part VII of the 6th edition, where he calls it “the value investors’ equivalent to Deuteronomy” . SA is an extremely thorough explanation of how to evaluate stocks and bonds, primarily focusing on a company’s income statement and balance sheet. It is not an ideal starting point for young investors, but it is essential reading for any serious investor.
Graham and Dodd discuss the philosophy of value investing eloquently. They provide detailed analysis of dozens of companies’ finance statements to support their arguments about how investors should analyze securities. It is an excellent reality check for anyone who thinks he knows a thing or two about investing.
The examples given by Graham and Dodd are a bit dated (1930s), but most of the principles are still relevant today. The organization of the book is a bit awkward, but I don’t presume that I could organize such a massive quantity and variety of material any better.
It took me a long time to get through this, and I will probably explore many parts of it again over the next few years. It is a valuable addition to any business library and a resource that you can use for a lifetime of investing.