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I like both, but you will never in a trillion years find a found footage movie more scary than Texas Cahinsaw Massacre.
UPDATE: I take back what I said about PA3, it sucks! Texas Chainsaw Massacre is still better nevertheless.
Two great, chilling horror films. I can't decide, because I need to rewatch Paranormal Activity 3. Whatever's higher.
Like both, but TCM is the clear winner.