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Valuation is at the heart of any investment decision, whether that decision is to buy, sell, or hold. In The Little Book of Valuation, expert Aswath Damodaran explains the techniques in language that any investors can understand, so you can make better investment decisions when reviewing stock research reports and engaging in independent efforts to value and pick stocks.
Page by page, Damodaran distills the fundamentals of valuation, without glossing over or ignoring key concepts, and develops models that you can easily understand and use. Along the way, he covers various valuation approaches from intrinsic or discounted cash flow valuation and multiples or relative valuation to some elements of real option valuation.
- Includes case studies and examples that will help build your valuation skills
- Written by Aswath Damodaran, one of today's most respected valuation experts
Written with the individual investor in mind, this reliable guide will not only help you value a company quickly, but will also help you make sense of valuations done by others or found in comprehensive equity research reports.
Valuing money-making companies that have long histories and established business models is straightforward. It is when you encounter difficult-to-value companies that you feel the urge to go over to the dark side of valuation—where you abandon first principles and create new metrics. Aswath Damodaran looks at a range of these companies, from start-ups in new businesses to distressed companies, from banks facing regulatory turmoil to commodity firms, and from emerging market upstarts to multinationals that spread across geographies and businesses. With each grouping, he helps you examine the call of the dark side and its practices and frameworks to value these firms.
To answer these questions, Aswath looks at companies across the life cycle and in different markets, from Uber and Shake Shack at one end of the spectrum to Vale, Royal Dutch, and United Technologies at the other end.
In the process, you learn how to
- Deal with “abnormally low” and negative risk-free rates in valuation
- Adapt to dynamic and changing risk premiums
- Value young companies that are disrupting existing businesses
- Analyze commodity and cyclical companies across cycles
- Value a company as the sum of its parts or as an aggregation of its users/subscribers and customers
- Determine the difference between pricing and valuation, and why some investments can only be priced
Valuation is at the heart of any investment decision, whether that decision is buy, sell or hold. But the pricing of many assets has become a more complex task in modern markets, especially after the recent financial crisis. In order to be successful at this endeavor, you must have a firm understanding of the proper valuation techniques. One valuation book stands out as withstanding the test of time among investors and students of financial markets, Aswath Damodaran'sInvestment Valuation.
Now completely revised and updated to reflect changing market conditions, this third edition comprehensively introduces investment professionals and students to the range of valuation models available and how to chose the right model for any given asset valuation scenario. This edition includes valuation techniques for a whole host of real options, start-up firms, unconventional assets, distressed companies and private equity, and real estate. All examples have been updated and new material has been added.
- Fully revised to incorporate valuation lessons learned from the last five years, from the market crisis and emerging markets to new types of equity investments
- Includes valuation practices across the life cycle of companies and emphasizes value enhancement measures, such as EVA and CFROI
- Contains a new chapter on probabilistic valuation techniques such as decision trees and Monte Carlo Simulation
- Author Aswath Damodaran is regarded as one of the best educators and thinkers on the topic of investment valuation
This indispensable guide is a must read for anyone wishing to gain a better understanding of investment valuation and its methods. With it, you can take the insights and advice of a recognized authority on the valuation process and immediately put them to work for you.
This thoroughly revised and updated edition of Investment Philosophies covers different investment philosophies and reveal the beliefs that underlie each one, the evidence on whether the strategies that arise from the philosophy actually produce results, and what an investor needs to bring to the table to make the philosophy work.
The book covers a wealth of strategies including indexing, passive and activist value investing, growth investing, chart/technical analysis, market timing, arbitrage, and many more investment philosophies.
- Presents the tools needed to understand portfolio management and the variety of strategies available to achieve investment success
- Explores the process of creating and managing a portfolio
- Shows readers how to profit like successful value growth index investors
- Aswath Damodaran is a well-known academic and practitioner in finance who is an expert on different approaches to valuation and investment
This vital resource examines various investing philosophies and provides you with helpful online resources and tools to fully investigate each investment philosophy and assess whether it is a philosophy that is appropriate for you.
Bien sea para comprar, vender o esperar, la valoración es esencial en cualquier decisión relacionada con la inversión. En este libro fundamental, el experto Aswath Damodaran explica con un lenguaje accesible las técnicas para llevar a cabo esa valoración, que permitirán a cualquier inversor tomar la mejor decisión cuando, tras leer los informes sobre las acciones de una compañía, intente valorarlas y actuar en consecuencia.
De una manera sintética y brillante, Damoraran sintetiza los fundamentos de la valoración, sin demorarse en exceso ni ignorar los conceptos clave y desarrolla modelos de fácil comprensión y uso. A lo largo de estas páginas, utiliza técnicas tanto de valoración intrínseca como relativa para valorar empresas basándose en los elementos estándar: los flujos de caja, el crecimiento y el riesgo.
El pequeño libro de la valoración de empresas incluye, además, casos de estudio y ejemplos que te ayudarán a mejorar tus capacidades de valoración. Pensado para un inversor profesional y para un particular, esta fiable guía no solo te ayudará a valorar rápidamente una compañía, sino a entender las valoraciones hechas por otros o que recogen los informes sobre acciones.
Renowned valuation expert Aswath Damodaran reviews the core tools of valuation, examines today’s most difficult estimation questions and issues, and then systematically addresses the valuation challenges that arise throughout a firm’s lifecycle in The Dark Side of Valuation: Valuing Young, Distressed and Complex Businesses.
In this thoroughly revised edition, he broadens his perspective to consider all companies that resist easy valuation, highlighting specific types of hard-to-value firms, including commodity firms, cyclical companies, financial services firms, organizations dependent on intangible assets, and global firms operating diverse businesses. He covers the entire corporate lifecycle, from “idea” and “nascent growth” companies to those in decline and distress, and offers specific guidance for valuing technology, human capital, commodity, and cyclical firms.
Damondaran on Valuation will not only convince you of the vitalityof the many valuation models available to you, it will help ensurethat you develop the acumen needed to select the right model forany valuation scenario.
Written by a gifted teacher and respected valuation authority, Damodaran on Valuation offers systematic examination of the threebasic approaches to valuation - discounted cash-flow valuation,relative valuation, and contingent claim valuation - and thevarious models within these broad categories.
Using numerous real-world examples involving both US andInternational firms, the book illuminates the purpose of eachparticular model, its advantages and limitatations, thestep-by-step process involved in putting the model to work, and thekinds of firms to which it is best applied. Among the toolspresented are designed to:
- Estimate the cost of equity - including the capital asset pricingmodel and arbitrage pricing model
- Estimate growth rates - with coverage of how to arrive at aweighted average of growth rates by blending three separateapproaches
- Value equity - focusing on the Gordon Growth Model and thetwo-and three-stage dividend discount model
- Measure free cash flow to equity - cash flows that are carefullydelineated from the dividends of most firms
- Value firms - including free cash flow to firm models, which areespecially suited to highly leveraged firms
- Estimate the value of assets by looking at the pricing ofcomparable assets - with insight into the use and misuse ofprice/earning and price/book value ratios, and underutilizedprice-to-sales ratios
- Measure the value of assets that share option characteristics -including a comparative look at the classic Black-Scholes andsimpler binomial models
Supported by an optional IBM-compatible disk, which consists ofspreadsheet programs designed to help users apply the modelshighlighted in the book, Damodaran on Valuation providespractitioners involved in securities analysis, portfoliomanagement, M&A, and corporate finance with the knowledge theyneed to value any asset.