I recently graduated from engineering and I want to know more about investing.
I'm particularly interested in Benjamin Graham's ideas. I want to read all of his books, but I couldn't decide which one should be first.
Which should I read first: Security Analysis or The Intelligent Investor?
I would recommend reading Intelligent Investor first. It was written slightly more recently (1949) than Security Analysis (1934). More important is that a recently revised edition* of Intelligent Investor was published. The preface and appendix were written by Warren Buffett. Intelligent Investor is more practical as an introduction for a novice. You may decide not to read Security Analysis at all, as it seems more like an academic text or professional's guide i.e. for accounting.
Benjamin Graham's Intelligent Investor remains relevant. It is used, successfully, as a guide for value investing, despite the hysteria of market sentiment and day-to-day variations, even extreme volatility. For example, I just read a nice article about applying the value investing principles extolled in Intelligent Investor a few weeks ago. It was written in the context of current markets, which is amazing, to be so applicable, despite the passage of decades.
For reference, you might want to glance at this book review (published in March 2010!) of the original 1934 edition of Security Analysis.
* The URL links to a one-paragraph summary by U.S. News & World Report. It does not link to a book sales website!
I would start with The Intelligent Investor. It's more approachable than Security Analysis. I read the revised edition which includes post-chapter commentary and footnotes from Jason Zweig. I found the added perspective helpful since the original book is quite old.
Warren Buffet has called Intelligent Investor "the best book about investing ever written." (Source) I would suggest that endorsement ranks it before the other. :)
Security Analysis is more detailed and, perhaps, oriented at a more professional audience – though individual investors would certainly benefit from reading it. Security Analysis is used as a textbook on value investing in some university-level business & finance courses.
(p.s. If you haven't yet heard about William Bernstein's The Intelligent Asset Allocator, I also recommend adding it to your reading list.)
First The Intelligent Investor and then the 1962 edition Security Analysis - which is out of print, you can get it on Amazon.com used or ebay. Then you can read the edition backward but the 1962 edition is the best - IMHO. And don't forget The Rediscovered Benjamin Graham and Benjamin Graham on Value Investing by Jane Lowe
Having thought about it, I decided to start with another book by the same author : "The Interpretation of Financial Statements".
I do not have a sufficiently strong basis to know what either "The Intelligent Investor" or "Security Analysis" are even about. Yeah, I might understand things, but I wouldn't grasp the essence, as I would be too busy figuring out what I didn't understand and miss the forest for the trees.
Read the Security Analysis. I believe if you read it completely, you will have a real good chance of succeeding at making good money. If you find the book hard to read just go through it and underline under the text as you read it.
If you're looking to learn more about investing for personal use (as opposed to academic interest), I'd recommend something like The Ages of the Investor instead.
