{"product_id":"modern-security-analysis-isbn-9781118390047","title":"Modern Security Analysis","description":"\u003cb\u003eA legendary value investor on security analysis for a modern era\u003c\/b\u003e  \u003cp\u003eThis book outlines Whitman's approach to business and security analysis that departs from most conventional security analysts. This approach has more in common with corporate finance than it does with the conventional approach. The key factors in appraising a company and its securities: 1) Credit worthiness, 2) Flows—both cash and earnings, 3) Long-term outlook, 4) Salable assets which can be disposed of without compromising the going concern, dynamics, 5) Resource conversions such as changes in control, mergers and acquisitions, going private, and major changes in assets or in liabilities, and 6) Access to capital.\u003c\/p\u003e \u003cul\u003e \u003cli\u003eOffers the security analysis value approach Martin Whitman has used successfully since 1986\u003c\/li\u003e \u003cli\u003eDetails Whitman's unconventional approach to security analysis and offers information on the six key factors for appraising a company\u003c\/li\u003e \u003cli\u003eContains the three most overemphasized factors used in conventional securities investing\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eWritten by Martin J. Whitman and Fernando Diz, \u003ci\u003eModern Security Analysis\u003c\/i\u003e meets the challenge of today's marketplace by taking into account changes to regulation, market structures, instruments, and the speed and volume of trading.\u003c\/p\u003e \u003cp\u003eAcknowledgments xv\u003c\/p\u003e \u003cp\u003eIntroduction 1\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart One The Foundations of Modern Business and Security Analysis 9\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 1 The Scope of Fundamental Finance, Investing, and the Investor Landscape 11\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eInvesting versus Speculating 12\u003c\/p\u003e \u003cp\u003eThe OPMI Defined 17\u003c\/p\u003e \u003cp\u003eActivists 18\u003c\/p\u003e \u003cp\u003eSummary 18\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 2 A Short Introduction to the Going Concern and Resource Conversion Views of Businesses 19\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eMethods of Wealth Creation 20\u003c\/p\u003e \u003cp\u003eThe Pure Going Concern View 21\u003c\/p\u003e \u003cp\u003eThe Resource Conversion View 23\u003c\/p\u003e \u003cp\u003eSummary 25\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 3 Substantive Consolidation and Structural Subordination 27\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eSubstantive Consolidation Not of Prime Importance 29\u003c\/p\u003e \u003cp\u003eThe Accounting for Stock Options Controversy in Light of the Substantive Consolidation Doctrine 32\u003c\/p\u003e \u003cp\u003eStructural Subordination Not a Significant Factor 37\u003c\/p\u003e \u003cp\u003eLack of Progress in Eurozone Crisis Resolution: The Failure to Use Substantive Consolidation 40\u003c\/p\u003e \u003cp\u003eSummary 41\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 4 The Substantive Characteristics of Securities 43\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eTypes of Securities for Analytic Purposes 44\u003c\/p\u003e \u003cp\u003eControl versus Non-Control Securities 44\u003c\/p\u003e \u003cp\u003eControl and Non-Control Pricing and Arbitrage 45\u003c\/p\u003e \u003cp\u003eTerms of Securities as Options 49\u003c\/p\u003e \u003cp\u003eWhat a Security is Depends on Where You Sit 50\u003c\/p\u003e \u003cp\u003eSummary 55\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 5 Primacy of the Income Account or Wealth Creation? What are Earnings, Anyway? 57\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWealth or Earnings? 59\u003c\/p\u003e \u003cp\u003eInfluence of Reported Earnings on Common Stock Prices 61\u003c\/p\u003e \u003cp\u003eThe Long-Term Earnings Record 63\u003c\/p\u003e \u003cp\u003eParsing the Income Account 64\u003c\/p\u003e \u003cp\u003eSummary 68\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 6 Net Asset Value: The Static and Dynamic Views 69\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Graham and Dodd View on NAV 71\u003c\/p\u003e \u003cp\u003eThe Financial Accounting View on NAV 72\u003c\/p\u003e \u003cp\u003eOur View on NAV 73\u003c\/p\u003e \u003cp\u003eThe Usefulness of NAV in Security Analysis 75\u003c\/p\u003e \u003cp\u003eThe Importance of NAV Dynamics 78\u003c\/p\u003e \u003cp\u003eNAV as One Measure of Resources 83\u003c\/p\u003e \u003cp\u003eNAV as One Measure of Potential Liquidity 84\u003c\/p\u003e \u003cp\u003eLimitations of NAV in Security Analyses 89\u003c\/p\u003e \u003cp\u003eLarge Premiums over Book Value Always Mean High P\/E Ratios: It Depends on ROE 93\u003c\/p\u003e \u003cp\u003eNet Nets Redefined 94\u003c\/p\u003e \u003cp\u003eOPMI Investing in Companies with Growing NAVs 96\u003c\/p\u003e \u003cp\u003eSummary 101\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 7 Creditworthiness 103\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCreditworthiness from the Borrowing Entity Point of View 105\u003c\/p\u003e \u003cp\u003eCapital Structure 107\u003c\/p\u003e \u003cp\u003eCapital Structure from the Corporate Perspective 107\u003c\/p\u003e \u003cp\u003eFactors Affecting Capital Structure 112\u003c\/p\u003e \u003cp\u003eConservative Capital Structures 117\u003c\/p\u003e \u003cp\u003eSummary 118\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 8 What Matters is Investment Risk 119\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThere is No General Risk—Only Specific Risk 120\u003c\/p\u003e \u003cp\u003eThe Components of Investment Risk 122\u003c\/p\u003e \u003cp\u003eSuccessful People Avoid Investment Risk 123\u003c\/p\u003e \u003cp\u003eMethods to Avoid Investment Risk 125\u003c\/p\u003e \u003cp\u003eSafe and Cheap Investing and Minimizing Investment Risk 127\u003c\/p\u003e \u003cp\u003eSummary 130\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 9 Shareholder Distributions from the Company Point of View 131\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCash Dividends or Retained Earnings 132\u003c\/p\u003e \u003cp\u003eStock Dividends 135\u003c\/p\u003e \u003cp\u003eStock Repurchases 138\u003c\/p\u003e \u003cp\u003eDistribution of Assets Other than Cash 141\u003c\/p\u003e \u003cp\u003eLiquidation 141\u003c\/p\u003e \u003cp\u003eSummary 142\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 10 Roles of Cash Dividends in Security Analysis and Portfolio Management 143\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Three Conventional Theories 145\u003c\/p\u003e \u003cp\u003eCash Dividends as a Factor in Market Performance 149\u003c\/p\u003e \u003cp\u003eThe Placebo Effect of Cash Dividends 151\u003c\/p\u003e \u003cp\u003eCash Dividends and Portfolio Management 151\u003c\/p\u003e \u003cp\u003eCash Dividends and Legal Lists 154\u003c\/p\u003e \u003cp\u003eCash Dividends and Bailouts 154\u003c\/p\u003e \u003cp\u003eThe Goals of Securities Holders 156\u003c\/p\u003e \u003cp\u003eSummary 157\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 11 The Appraisal of Managements and Growth: GARP versus GADCP 159\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eNew Framework for the Appraisal of Managements 160\u003c\/p\u003e \u003cp\u003eManagements Attuned to OPMI Interests 161\u003c\/p\u003e \u003cp\u003eManagements as Resource Converters 162\u003c\/p\u003e \u003cp\u003eTradeoffs 165\u003c\/p\u003e \u003cp\u003eGrowth: GARP versus GADCP 166\u003c\/p\u003e \u003cp\u003eGrowth at a Reasonable Price (GARP) 167\u003c\/p\u003e \u003cp\u003eGrowth at Dirt Cheap Prices (GADCP) 168\u003c\/p\u003e \u003cp\u003eSummary 170\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 12 The Significance (or Lack of Significance) of Market Performance 173\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eMarket Performance and the Character of a Portfolio 176\u003c\/p\u003e \u003cp\u003eMarket Performance of Portfolios versus Individual Securities 177\u003c\/p\u003e \u003cp\u003eOutsiders, Insiders, and Market Price 179\u003c\/p\u003e \u003cp\u003eProfessional Money Managers and Beating the Market 180\u003c\/p\u003e \u003cp\u003ePerspective on Bailouts and the Significance of Market Performance 181\u003c\/p\u003e \u003cp\u003eSummary 182\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 13 How Much Diversification? 185\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003ePortfolio Diversification versus Securities Concentration 186\u003c\/p\u003e \u003cp\u003eCorporate Diversification versus Concentration 190\u003c\/p\u003e \u003cp\u003eSummary 191\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 14 Toward a General Theory of Market Efficiency 193\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Determinants of Market Efficiency 195\u003c\/p\u003e \u003cp\u003eExternal Forces Influencing Markets Explained 198\u003c\/p\u003e \u003cp\u003eGreat Economists Can Learn a Lot from Value Investors 199\u003c\/p\u003e \u003cp\u003eMarkets Where External Disciplines Seem to Be Lacking 206\u003c\/p\u003e \u003cp\u003eMarket Efficiency and Fair Prices in Takeovers 211\u003c\/p\u003e \u003cp\u003eSummary 213\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Two Putting It All Together: Safe and Cheap Investing versus Conventional Approaches 215\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 15 Safe and Cheap Investing 217\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Safe and Cheap Approach 218\u003c\/p\u003e \u003cp\u003eBenefits of the Safe and Cheap Approach for the OPMI 220\u003c\/p\u003e \u003cp\u003eRestrictions and Demands of the Safe and Cheap Approach 222\u003c\/p\u003e \u003cp\u003eSummary 231\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 16 Graham and Dodd Placed in Context 233\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe OPMI Defined 235\u003c\/p\u003e \u003cp\u003eThe OPMI Perspective of Analysis 236\u003c\/p\u003e \u003cp\u003eThe Going Concern and Investment Company Views of Businesses 238\u003c\/p\u003e \u003cp\u003ePrimacy of the Income Account and Wealth Creation 238\u003c\/p\u003e \u003cp\u003ePrimacy of the Income Account, Dividends, and Corporate Uses of Cash 240\u003c\/p\u003e \u003cp\u003ePrimacy of the Income Account and the Appraisal of Managements 240\u003c\/p\u003e \u003cp\u003ePrimacy of the Income Account and Top-Down versus Bottom-Up Analysis 241\u003c\/p\u003e \u003cp\u003ePrimacy of the Income Account and Diversification 241\u003c\/p\u003e \u003cp\u003ePrimacy of the Income Account and Growth Stocks 242\u003c\/p\u003e \u003cp\u003eMarket Risk versus Investment Risk and Margin of Safety 242\u003c\/p\u003e \u003cp\u003eThe Importance of Market Performance 243\u003c\/p\u003e \u003cp\u003eUses and Limitations of Financial Accounting 244\u003c\/p\u003e \u003cp\u003eSubstantive Consolidation 245\u003c\/p\u003e \u003cp\u003eCompensation of Promoters 245\u003c\/p\u003e \u003cp\u003eDo Stock Market Prices Reflect Corporate Values? 245\u003c\/p\u003e \u003cp\u003eTrade-Offs 247\u003c\/p\u003e \u003cp\u003eModern Capital Theory versus Graham and Dodd 247\u003c\/p\u003e \u003cp\u003eSummary 248\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 17 Academic Finance: Modern Capital Theory 249\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe MCT Point of View 253\u003c\/p\u003e \u003cp\u003eEquilibrium Pricing is Universally Applicable 254\u003c\/p\u003e \u003cp\u003eThe Outside Passive Minority Investor is the Only Relevant Market 260\u003c\/p\u003e \u003cp\u003eDiversification is a Necessary Protection against Unsystematic Risk 261\u003c\/p\u003e \u003cp\u003eSystematic Risk Exists 262\u003c\/p\u003e \u003cp\u003eValue is Determined by Forecasts of Discounted Cash Flows 262\u003c\/p\u003e \u003cp\u003eCompanies are Analyzed Basically as Going Concerns; Investors in Marketable Securities are Analyzed as Investment Companies 264\u003c\/p\u003e \u003cp\u003eInvestors are Monolithic: Their Unitary Goal is Risk-Adjusted Total Return, Earned Consistently 266\u003c\/p\u003e \u003cp\u003eMarket Efficiency Means an Absence of Market Participants Who Earn Excess Returns Consistently or Persistently 267\u003c\/p\u003e \u003cp\u003eGeneral Laws are Important 269\u003c\/p\u003e \u003cp\u003eRisk is Defined as Market Risk 271\u003c\/p\u003e \u003cp\u003eMacro Considerations are Important 272\u003c\/p\u003e \u003cp\u003eCreditor Control is a Nonissue 273\u003c\/p\u003e \u003cp\u003eTransaction Costs are a Nonissue 273\u003c\/p\u003e \u003cp\u003eFree Markets are Better than Regulated Markets 273\u003c\/p\u003e \u003cp\u003eThe Outside Passive Minority Investor Market is Better Informed than Any Individual Investor 275\u003c\/p\u003e \u003cp\u003eMarkets are Efficient or at Least Tend Toward an Instantaneous Efficiency 275\u003c\/p\u003e \u003cp\u003eSummary 276\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 18 Broker-Dealer Research Departments and Conventional Money Managers 277\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eHow Research Departments and Conventional Money Managers Think 279\u003c\/p\u003e \u003cp\u003eProblems Faced by Research Departments and Conventional Money Managers 282\u003c\/p\u003e \u003cp\u003eSummary 292\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Three Real-World Considerations 295\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 19 Uses and Limitations of Financial Accounting 297\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Conventional Approaches 299\u003c\/p\u003e \u003cp\u003eFinancial Accounting Reports as Objective Benchmarks 302\u003c\/p\u003e \u003cp\u003eGenerally Accepted Accounting Principles as Defining Reality for Certain Specific Purposes 309\u003c\/p\u003e \u003cp\u003eGenerally Accepted Accounting Principles as a Road Map for Due Diligence and Less Thorough Investigations 310\u003c\/p\u003e \u003cp\u003eSummary 319\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 20 Company Disclosures and Information: Following the Paper Trail in the United States 321\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eNarrative Disclosures in the United States 322\u003c\/p\u003e \u003cp\u003eThe Documents and How to Read Them 327\u003c\/p\u003e \u003cp\u003eWhat the Paper Trail Does for the Outside Investor 328\u003c\/p\u003e \u003cp\u003eWhat the Paper Trail Doesn’t Do 331\u003c\/p\u003e \u003cp\u003eHow Good is the Paper Trail? 334\u003c\/p\u003e \u003cp\u003eSummary 335\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 21 Buying Securities in Bulk 337\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eMethods for Acquisition of Common Stocks 338\u003c\/p\u003e \u003cp\u003eAcquisition of Voting Equities through Exchanges of Securities 343\u003c\/p\u003e \u003cp\u003eAcquisition of Control without Acquiring Securities by Using the Proxy Machinery 345\u003c\/p\u003e \u003cp\u003eSummary 346\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Four Understanding Resource Conversion 347\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 22 A Short Primer on Resource Conversion 349\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eLong-Term Arbitrage between OPMI Prices and Control Values 350\u003c\/p\u003e \u003cp\u003eMore Aggressive Employment of Existing Assets 355\u003c\/p\u003e \u003cp\u003eMerger and Acquisition Activity 355\u003c\/p\u003e \u003cp\u003eCorporate Contests for Control 356\u003c\/p\u003e \u003cp\u003eGoing Private and Leveraged Buyouts 359\u003c\/p\u003e \u003cp\u003eSummary 368\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 23 Restructuring Troubled Companies 369\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Five Basic Truths of Distress Investing 370\u003c\/p\u003e \u003cp\u003eRehabilitation of Troubled Entities 380\u003c\/p\u003e \u003cp\u003eSummary 391\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 24 The Role of Government in Reorganizations 393\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBailouts or Capital Infusions? 394\u003c\/p\u003e \u003cp\u003eToo Big to Fail is a Phony Concept 395\u003c\/p\u003e \u003cp\u003eThe Government and Private Sector are in Partnership Whether They Like It or Not 396\u003c\/p\u003e \u003cp\u003eWall Street Professionals and Corporate Executives are All in the Business of Creating Moral Hazards 398\u003c\/p\u003e \u003cp\u003eTaxpayer Bailouts are a Phony Concept 398\u003c\/p\u003e \u003cp\u003eA Revolution in Corporate Reorganizations and Liquidations May Have Occurred in 2009 with the Chapter 11 Reorganizations of General Motors, Chrysler, and CIT Corporation 399\u003c\/p\u003e \u003cp\u003eStrict Regulation of Financial Institutions is Absolutely Necessary 399\u003c\/p\u003e \u003cp\u003eSummary 400\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Five Active Investors Buy and Sell Common Stocks on an Advantageous Basis 401\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 25 The Economics of Private Equity Leveraged Buyouts 403\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe 2005 Acquisition of Hertz Global Holdings and Subsequent Events as a Prime Example 404\u003c\/p\u003e \u003cp\u003eSuper-Attractive Access to Capital Markets 404\u003c\/p\u003e \u003cp\u003eCash Payments to Sponsors and Sponsor-Controlled Funds 409\u003c\/p\u003e \u003cp\u003eSponsors’ Control of Hertz 410\u003c\/p\u003e \u003cp\u003eSponsors Attuned to the Needs of Bankers and the Wall Street Underwriting Community 411\u003c\/p\u003e \u003cp\u003eQuestions about LBOs 412\u003c\/p\u003e \u003cp\u003eSummary 413\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 26 The Use of Creative Finance in a Corporate Takeover 415\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Case 415\u003c\/p\u003e \u003cp\u003eThe Postscript 427\u003c\/p\u003e \u003cp\u003eInvestment Lessons 428\u003c\/p\u003e \u003cp\u003eThe Appraisal of Management 430\u003c\/p\u003e \u003cp\u003eSpotting Doable Deals 431\u003c\/p\u003e \u003cp\u003eSummary 432\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 27 The Use of Creative Finance to Benefit Controlling Stockholders 433\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Problems Faced in the Schaefer Corporation Deal 435\u003c\/p\u003e \u003cp\u003eThe Background of the Deal 435\u003c\/p\u003e \u003cp\u003eDiscount Purchases of Restricted Corporate Stock 437\u003c\/p\u003e \u003cp\u003eCorporation’s Acquisition of Brewing 440\u003c\/p\u003e \u003cp\u003eProblems and Wealth Creation Potentials for the Parties in Interest 449\u003c\/p\u003e \u003cp\u003eSummary 467\u003c\/p\u003e \u003cp\u003eGlossary of Acronyms 469\u003c\/p\u003e \u003cp\u003eAbout the Authors 471\u003c\/p\u003e \u003cp\u003eIndex 473\u003c\/p\u003e  \u003cp\u003e\u003ci\u003e“Modern Security Analysis\u003c\/i\u003e is full of useful discussions of such standard topics as creditworthiness, market efficiency, diversification, and financial accounting. But it also includes descriptions of more controversial ideas about the overriding importance of tangible net asset value, the shortcomings of the Graham–Dodd approach to value investing, and the irrelevance of both modern capital theory and broker\/dealer research.”\u003cbr\u003e —\u003ci\u003e\u003cb\u003eCFA Institute Book Review\u003c\/b\u003e\u003c\/i\u003e\u003c\/p\u003e  \u003cp\u003e\u003cb\u003eMARTIN J. WHITMAN\u003c\/b\u003e is Chairman of the Third Avenue Funds and founder of Third Avenue Management, an investment adviser to private and institutional clients. Mr. Whitman has proven for more than fifty years that active, opportunistic investors can find under-priced securities in companies with strong balance sheets. He is also an adept control investor who was an important participant in the rehabilitation of Nabors Industries and Covanta Energy, among others. He was Third Avenue's Chief Investment Officer from its founding through January 2010. \u003c\/p\u003e\u003cp\u003eFor over thirty years, Mr. Whitman was a Distinguished Management Fellow at the Yale School of Management. He is also an honorary trustee at Syracuse University which is also home to the Whitman School of Management. He is a frequent speaker and commentator within the financial services community. \u003c\/p\u003e\u003cp\u003e\u003cb\u003eFERNANDO DIZ\u003c\/b\u003e is the Managing Director of the Orange Value Fund, LLC, the Martin J. Whitman Professor of Finance and the Director of the Ballentine Investment Institute at Syracuse University. He teaches classes in value, control and distress investing and created and directs the two-year Orange Value Fund program. He is the co-author with Martin J. Whitman of \u003ci\u003eDistress Investing: Principles and Technique\u003c\/i\u003e. Professor Diz received his MSc and PhD degrees from Cornell University.   \u003c\/p\u003e\u003cp\u003eWith the crash of 2008 still ringing in the market's collective ears, the value investing philosophy has never seemed more relevant or sound. But in the eighty years since Benjamin Graham and David Dodd's \u003ci\u003eSecurity Analysis\u003c\/i\u003e took the investing world by storm, much has changed in the investing environment.\u003c\/p\u003e \u003cp\u003eWorking from the simple guiding principle that \"safe and cheap\" is the most reliable way to minimize investment risk while maximizing long-term returns, Whitman, over the course of his more than fifty years as an investor and fund manager, has developed an investing approach that has made fortunes for his many clients—and himself—in all economic climates.\u003c\/p\u003e \u003cp\u003eA book that is sure to become an investing classic, \u003ci\u003eModern Security Analysis\u003c\/i\u003e reveals the details of Whitman's approach to analyzing businesses and the securities they issue.\u003c\/p\u003e \u003cp\u003eWhile conventional approaches to investing, including Graham and Dodd fundamentalism and academic finance, take a top-down approach to analyzing securities and businesses, the bottom-up approach you'll discover here looks at companies not merely as aggregates of operational cash flows and earnings—their pure going concern attributes—but also as entities actively involved in wealth-creating \"resource conversion\" activities. In essence, that entails identifying a company's potential for generating wealth in many different ways, in addition to flows from operations, including mergers and acquisitions, spinoffs, recapitalizations, liquidations, changes of control, having attractive access to capital markets, and more.\u003c\/p\u003e \u003cp\u003eClearly accessible with the help of numerous examples and several case studies, Martin Whitman and co-author Professor Fernando Diz describe proven methods for:\u003c\/p\u003e \u003cul\u003e \u003cli\u003eDeveloping a thorough understanding of many companies' business and wealth generating attributes\u003c\/li\u003e \u003cli\u003eAppraising business managers not only as operators but also as dealmakers, investors, and financiers\u003c\/li\u003e \u003cli\u003eUnderstanding the importance of credit worthiness for any economic entity\u003c\/li\u003e \u003cli\u003eUnderstanding the important differences between control and passive investing\u003c\/li\u003e \u003cli\u003eAppraising and avoiding investment risk\u003c\/li\u003e \u003cli\u003eChoosing the right amount of diversification or the level of portfolio concentration\u003c\/li\u003e \u003cli\u003eBuying growth without paying for it\u003c\/li\u003e \u003cli\u003eAvoiding the many pitfalls of following conventional wisdom\u003c\/li\u003e \u003cli\u003eUnderstanding the significance of resource conversion activities in the generation of business value\u003c\/li\u003e \u003cli\u003eUnderstanding what value investing is relative to other forms of investing\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eOffering a unique opportunity to learn a proven, time-tested alternative to conventional security analysis from an investing legend, this book is must-reading for finance professionals, including security analysts, money managers, institutional investors, finance academics, and economists as well as anyone seeking to invest with a large margin of safety.\u003c\/p\u003e  \u003cp\u003eWith the crash of 2008 still ringing in the market's collective ears, the value investing philosophy has never seemed more relevant or sound. But in the eighty years since Benjamin Graham and David Dodd's \u003ci\u003eSecurity Analysis\u003c\/i\u003e took the investing world by storm, much has changed in the investing environment. \u003c\/p\u003e\u003cp\u003eWorking from the simple guiding principle that \"safe and cheap\" is the most reliable way to minimize investment risk while maximizing long-term returns, Whitman, over the course of his more than fifty years as an investor and fund manager, has developed an investing approach that has made fortunes for his many clients—and himself—in all economic climates. \u003c\/p\u003e\u003cp\u003eA book that is sure to become an investing classic, \u003ci\u003eModern Security Analysis\u003c\/i\u003e reveals the details of Whitman's approach to analyzing businesses and the securities they issue. \u003c\/p\u003e\u003cp\u003eWhile conventional approaches to investing, including Graham and Dodd fundamentalism and academic finance, take a top-down approach to analyzing securities and businesses, the bottom-up approach you'll discover here looks at companies not merely as aggregates of operational cash flows and earnings—their pure going concern attributes—but also as entities actively involved in wealth-creating \"resource conversion\" activities. In essence, that entails identifying a company's potential for generating wealth in many different ways, in addition to flows from operations, including mergers and acquisitions, spinoffs, recapitalizations, liquidations, changes of control, having attractive access to capital markets, and more. \u003c\/p\u003e\u003cp\u003eClearly accessible with the help of numerous examples and several case studies, Martin Whitman and co-author Professor Fernando Diz describe proven methods for: \u003c\/p\u003e\u003cul\u003e \u003cli\u003eDeveloping a thorough understanding of many companies' business and wealth generating attributes\u003c\/li\u003e \u003cli\u003eAppraising business managers not only as operators but also as dealmakers, investors, and financiers\u003c\/li\u003e \u003cli\u003eUnderstanding the importance of credit worthiness for any economic entity\u003c\/li\u003e \u003cli\u003eUnderstanding the important differences between control and passive investing\u003c\/li\u003e \u003cli\u003eAppraising and avoiding investment risk\u003c\/li\u003e \u003cli\u003eChoosing the right amount of diversification or the level of portfolio concentration\u003c\/li\u003e \u003cli\u003eBuying growth without paying for it\u003c\/li\u003e \u003cli\u003eAvoiding the many pitfalls of following conventional wisdom\u003c\/li\u003e \u003cli\u003eUnderstanding the significance of resource conversion activities in the generation of business value\u003c\/li\u003e \u003cli\u003eUnderstanding what value investing is relative to other forms of investing\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eOffering a unique opportunity to learn a proven, time-tested alternative to conventional security analysis from an investing legend, this book is must-reading for finance professionals, including security analysts, money managers, institutional investors, finance academics, and economists as well as anyone seeking to invest with a large margin of safety.\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47989644394725,"sku":"NP9781118390047","price":75.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9781118390047.jpg?v=1761784936","url":"https:\/\/k12savings.com\/es\/products\/modern-security-analysis-isbn-9781118390047","provider":"K12savings","version":"1.0","type":"link"}