Customer Reviews

The Real Options Solution: Finding Total Value in a High-Risk World

5 star:		(8)
4 star:		(2)
3 star:		(1)
2 star:		(0)
1 star:		(1)

 

 

I would like to congratulate Dr. Boer on his success with making "real options" real for the practitioners. I have read many, if not most, most of the books out there on this topic, and found none to be as accessible and fun to read as Dr. Boer's treatment of this subject.

I have also bought his other book, The Valuation of Technology - Business and Financial Issues in R&D. Again, full of practical insights that are not available elsewhere.

I fail to understand the scathing review of the reader from Norway. Was this person expecting to learn about financial options, instead of real options, from this book? In that case, it was the reader's mistake for picking the wrong book! For real options, this book has no peer. I would recommend it to anyone who wants to apply the real options theory to real-world problems.

Thanks Dr. Boer for a job well done and for making a real contribution to realistic valuation and pricing of business opportunities.

Dr. Peter Boer's latest book, THE REAL OPTIONS SOLUTION, extends the Yale professor's reputation for highly relevant insights into HOW to best adapt valuation and management decision approaches to today's new challenges. One needs to look no further than Winter 2001-2 headlines about corporate collapses to realize that there's are major limitations with ordinary first generation discounted cashflow (DCF) methods when it comes to valuation of complex companies-- particularly those in advanced technology fields and/or with complex financing structures. The near-term witch hunt response is to dump 'em all. But when the temporary period of Post-Enron / Post-3G and Fiber Excessive Pessimism recedes, management and institutional investors alike will realize that they still need new guidance for valuing corporate decisions. Towards this aim, Professor Boer elevates Real Options from its slightly dusty academic origins to a new dynamic role at the center of major corporation decision making and financial marketplace valuation. To me, the key word in the book's title is SOLUTIONS-- applied in the way that Dr. Boer describes, Real Options are used to represent strategy alternatives to supplement and fundamentally improve core discounted cashflow valuation. His prize, for readers: a full perspective on the corporation's ultimate source of wealth: THE VALUE OF ITS STRATEGIC DECISIONS. This is must reading for corporate executives who seek highest value decisions and ultimately, highest possible shareholder value for the corporation they run. This is also essential reading for institutional investors and other valuation-influencers searching for the best methods for separating tomorrow's outperforming corporations in value terms from the dross.

Dr. Boer's ideas about the economics and management of industrial R&D have had a significant impact. This novel and wonderfully written book provides a modern framework for the analysis of high-risk, high-reward endeavors which include research and development. The methodology has great intellectual appeal: it integrates real options analysis and net present value analysis, thus capturing the traits of the "new" and "old" economies in the same analytical framework. This it does in a practical, pragmatic manner, suitable to real-life problems in opportunity (and risk) management.

This book attempts to expose the reader in a nontechnical manner to the new technique of evaluating investments in the New Economy characterised by volatility and uncertainty.The author does so without resorting to mathematical methods.The book is basically expository and attempts to build upon the readers'familiarity with financial options.It concentrates in describing the real options which each business decision is confronted with and demonstrates the flexibility which managers face. He views these opportunities as options even the decision not to implement the plan. This is a creative approach to understanding what real options is all about.

This is an excellent text for an introduction to real options. I especially like the author's overall valuation model for high-technology companies, the "Total Value Model", that combines static discounted cash flow models for products currently generating revenue, and real options for technologies and products in development. I have already recommended this book to several CEOs because its so easy to read and understand. The text does not contain a single formula and is almost totally conceptual, absolutely excellent!!! I am already adopting the author's valuation approach in my own valuation service. Thank you Dr. Boer.

This book was a real revelation to me. The real options approach to valuation is a very valuable new tool, and this book explains how it works in clear terms. Perhaps more important is the extensive, thoughtful and provocative discussion throughout the book of risk and innovation, how to think understand them, and how to frame and manage the full process of value creation in business. This book is cutting edge, but any decision maker or investor in innovative business enterprises should definitely read it.

I have just finished reading this book and thoroughly enjoyed it. Further, I have induced three of my colleagues buy it!

If you are involved in business planning, strategy formulation or capital planning and are looking for an accessible overview on the application of Real Options, I think this book is an excellent place to begin. For me, this was a three airline flight read.

A comprehensive analysis of managing risk, with facinating lessons from the actions of nations, business, and individuals combined with interesting insights on how science, technology, creativity, and innovation help create value. Particularly appropriate to our current business crisis is the brief discussion of darkness and fog. Bottom line--planning and analysis should be a high-priority and ongoing process in management.

The book is interesting and reads well. But it doesn't deliver up to the expectations for the following:

- It is too basic. Most of the readers won't be able to use real options at all after reading
- It is not so practical. Lacks the tools that the other book by Boer included

Overall, is an interesting read to get familiar with the kind of situation where real options are of use and increase your culture on the matter, but it is not a practical "solution"

The Real Options Solution is a must read for anyone interested in the creation of value or wishing to understand or quantify the total value of a company. It clearly sets out why the value of any company must include the value of its business plans and the options that these afford, before going on to explain the more technical aspect of valuing such plans or options.

F.P.Boer, in the first section of this book, successfully achieves a discussion of value and its components that will satisfy anyone wishing to understand how to perform a calculation of the value of a real option, detailing what data would be required, how to build this into a total value caluclation etc. Yet the use of only a limited number of diagrams and numerical examples makes this book accessible to all, not just those interested in a text book approach, without in any way compromising the content or quality of the material provided. In the second section several topics are discussed, with numerous examples both contemporary and from history, including 1) risk, it's upside as well as downside potential and the treatment of different types of risk in valuations, 2) intellectual capital, what is and how it could be valued and 3) innovation and why this is essential to future value creation, with all issues discussed adding an important dimension to this very practical guide to value.