You buy financial assets for the cash flows you expect to gain. The price of a stock cannot be justified by assuming there will be other investors around who will pay a higher price in the future. That is the equivalent of playing an expensive game of musical chairs. As a prudent investor, you need to value the investment you are considering before buying it.
Valuation is at the heart of any investment decision, whether that decision is to buy, sell, or hold. In The Little Book of Valuation, financial expert Aswath Damodaran explains valuation techniques in everyday language so that even those new to investing can understand. Using this important resource, you can make better investment decisions when reviewing stock research reports and engaging in independent efforts to value and select stocks for your portfolio.
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 implement. He also makes the case that the two popular, and often divergent, approaches (intrinsic and relative) to valuation can be used in tandem. Damodaran discusses how both of these approaches can significantly improve your odds by helping you select stocks that are undervalued not only on an intrinsic level but also on a relative basis.
Once you become familiar with the techniques outlined in this book, you will be able to value a company with confidence. In addition, The Little Book of Valuation:
Written with the individual investor in mind, this reliable guide will not only allow you to value a company quickly, but will also help you make sense of valuations done by others or found in comprehensive equity research reports.
LITTLE BOOK BIG PROFITS®
THE LITTLE BOOK OF VALUATION
"There is nothing 'little' about Damodaran's The Little Book of Valuation. The whole gamut of ideas that form the basis for all business valuations covered in his many multi-hundred page classics-are all here, with the same rigor, clarity, pointedness, and wit."
Professor Anant K. Sundaram Tuck School of Business, Dartmouth College
"The Little Book of Valuation is a great book that I will recommend to my students and friends. This book is an impressive synthesis of sound theory and best practice. It is completely accessible to the novice. It is also an important addition to the professional library of the finance specialist. Acquire it without hesitation."
Pablo Fernandez, Professor of Finance IESE Business School, Spain
"Damodaran's fast read book offers valuable insights for both institutional and sophisticated individual investors. Within the confines of 'intrinsic' (income approach) and 'relative' (market approach) analysis, he identifies the 'value drivers' in several broad categories of stocks and the most important factors to look for, and how to treat them in valuation for each category."
Shannon Pratt Chairman and CEO, Shannon Pratt Valuations
It seems like it should be a simple little book, but it actually packs quite a wallop. Aswath gives helpful and specific advice on how different approaches work best in specific... Read morePublished 1 month ago by Richard Ballina
It is a remarkable summary on market fundamentals on valuationPublished 2 months ago by Rodrigo González González
A very efficient use of time in gaining an practical understanding of the subject of valuation. A wonderful primer for finance students.Published 4 months ago by Dennis A. Starliper
Great read, prop trader looking to learn more about valuationPublished 5 months ago by Joseph Hofland
I received the book very fast. It is as advertised and has very good information, although it is a bit technical. I would recommend this book and this seller.Published 5 months ago by res0333
Book arrived as described. The book is not for everyone; mainly those in corporate finance - but a good book for anyone.Published 7 months ago by Keith
I think it`s useful for quick search and can be an introductory reading as well. So, I recommend this book for individual investors as a first reading to fundamental analysis. Read morePublished 8 months ago by Angelo Freitas
I got turned on to the little book series with "The Little Book that Builds Wealth" that is still probably my favorite book, but this one was also an enjoyable, and quick... Read morePublished 13 months ago by Valerie C. Lynn