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John Burr Williams
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The Theory of Investment Value Paperback – June 1, 1997

by John Burr Williams (Author)

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This book was first printed in 1938, having been written as a Ph.D. thesis at Harvard in 1937. Our good friend, Peter Bernstein mentioned this book several times in his excellent Capital Ideas which was published in 1992. Why the book is interesting today is that it still is important and the most authoritative work on how to value financial assets. As Peter says: "Williams combined original theoretical concepts with enlightening and entertaining commentary based on his own experiences in the rough-and-tumble world of investment." Williams' discovery was to project an estimate that offers intrinsic value and it is called the 'Dividend Discount Model' which is still used today by professional investors on the institutional side of markets. Appendix, Tables
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  1. Print length
    525 pages
  2. Language
    English
  3. Publication date
    June 1, 1997
  4. Dimensions
    6 x 1.19 x 9 inches
  5. ISBN-10
    087034126X
  6. ISBN-13
    978-0870341267
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Product details

  • Publisher ‏ : ‎ Fraser Publishing Company
  • Publication date ‏ : ‎ June 1, 1997
  • Edition ‏ : ‎ Reprint
  • Language ‏ : ‎ English
  • Print length ‏ : ‎ 525 pages
  • ISBN-10 ‏ : ‎ 087034126X
  • ISBN-13 ‏ : ‎ 978-0870341267
  • Item Weight ‏ : ‎ 1.59 pounds
  • Dimensions ‏ : ‎ 6 x 1.19 x 9 inches
  • Best Sellers Rank: #828,843 in Books (See Top 100 in Books)

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John Burr Williams

John Burr Williams

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Top reviews from the United States

  • RUPESH PAUL
    5.0 out of 5 stars amazing work of finance and economics
    Reviewed in the United States on February 16, 2009
    Verified Purchase
    Warren Buffet mentioned this as one of the most important works in investment and finance. It is an amazing read though one needs to go very slow.It has lots of details on investment, dividends, interest rates and correlation of all the factors in order to arrive at an intrinsic valuation. The concepts of marginal opinion, dividend discount model valuations, economics of dividends & interests as well as the detailed idea of impact of taxation are amazing. Indeed as John Burr Williams defines this book himself as a work for scientist & economists rather than a maxim for speculators. This book has been a foundation of investment philosophies of Markowitz, Buffet and many others.
    9 people found this helpful
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  • AVS
    5.0 out of 5 stars Clearly an outstanding work, but too theoretical
    Reviewed in the United States on September 30, 2016
    Verified Purchase
    The thing I found very hard to understand though, were the initial chapters centered around "marginal opinion". I think the author builds on top of a an "assumed" foundation which is a demanding prerequisite indeed! Once the central idea of Net Present Value is well understood, then putting it to practice is far-far easier than to read through rest of the chapters. The case studies might be more useful though! But I haven't gotten to that stage yet. Since finance/investing is not my profession, I am inclined to review the book through the lens of practicality than through theoretical value - And that makes me critical of anything that is non-procedural information.
    5 people found this helpful
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  • Andreas
    4.0 out of 5 stars Tough read but well worth it
    Reviewed in the United States on August 10, 2015
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    Classic for any person who want to get in deep with serious long term investment. Remember this was originally a doctoral dissertation and the language is influenced by that, as well as the time it was written. Don't expect any smart investment guru jargon. It is a tough read but well worth if you take the time.
    5 people found this helpful
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  • Jonathan I. Kine PMP
    5.0 out of 5 stars Learn the rules of the game
    Reviewed in the United States on July 28, 2025
    Verified Purchase
    You must read this now.
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  • Erik Ramirez
    5.0 out of 5 stars calculus is a must
    Reviewed in the United States on May 18, 2023
    Verified Purchase
    the plain words that jack boggle advocates: index invest at the lowest cost possible; it is a summary of the calculation of the differential equation of decay. easy math, but calculus is needed to understand it.
    well, if you can find the costs of index investing using diferential equations; then this book will give you a similar challenge.
    probably these quants have and edge over the average investor because they understand the abstract math.
    don't get discouraged though, the modern world is sophisticated and you need to get sophisticated too.
    One person found this helpful
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  • michael albert
    5.0 out of 5 stars As Expected, Great
    Reviewed in the United States on November 20, 2023
    Verified Purchase
    A staple in investment value. A must-read and the transaction was as expected. Thank you
    One person found this helpful
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  • Befragt
    3.0 out of 5 stars An important work
    Reviewed in the United States on June 15, 2006
    Verified Purchase
    The Theory of Investment Value is clearly an important work, as reflected in Benjamin Graham's citations to it and the prevalence of the dividend discount model in valuing stocks. The theories expounded in this book are of particular import to those to seek to by stock at a value less than the intrinsic value of a company as they determine it to be.

    The book itself initially appears intimidating, as there are a lot of mathematical equations, but in reality, the math is nothing more than simple algebra, mostly different models related to computing dividend values going forward.

    I found the book to be an interesting read, but it is highly theoretical in nature. The central theme of the book is that stocks are worth the present value of their dividends, paid in perpetuity. It does not discuss earnings manipulation, effect of dilution, securities with superior or inferior claim to payment, etc. Moreover, as Graham points out in Security Analysis, companies that have a high return on invested capital would be well advised to reinvest their profits, while less successful companies would be better off paying higher dividends (relative to book value). This would, of course, tend to make the practical application Williams' theory somewhat complicated, insofar as it makes computing future dividends more difficult.

    Readers looking for a more practical guide to valuing stocks might be better served reading Securities Analysis by Benjamin Graham, or any number of more "practical" books related to stock market analysis, particularly as those analyzing financial statements to determine the intrinsic value of a company. Some readers might also find "The Aggressive Conservative Investor" by Marty Whitman and Martin Shubik to be a good read for a competing view, since the authors of that book take the position that, with respect to non-controlling shareholders, a company's stock is worth the net after-tax cash that they expect to realize in the future, whether from dividends, liquidating events, etc. However, if a reader is truly interested in obtaining an understand of how dividends affect stock prices, the book is a worthy read.
    50 people found this helpful
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  • Amazon Customer
    5.0 out of 5 stars ... you are a value investor this will be a good book for you
    Reviewed in the United States on February 9, 2017
    Verified Purchase
    If you are a value investor this will be a good book for you. It is advanced so make sure you have read other books on the subject and have a moderate understanding of the theories of value investing.
    4 people found this helpful
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Top reviews from other countries

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  • Carlos Meléndez
    3.0 out of 5 stars Complicated
    Reviewed in Mexico on October 16, 2024
    Verified Purchase
    Don't let the 3 stars trick You. It is a book that does give You some insights of investing, but it is very complicated. If You would like to know how did NPV, DCF and other valuation methods we're created, this is a book for You. I would urge You to re-study Your algebra and calculus to get the Best from book.
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  • Utente
    2.0 out of 5 stars Errori di stampa
    Reviewed in Italy on June 7, 2024
    Verified Purchase
    Il libro è ottimo come contenuto, tuttavia la stampa presenta evidenti errori nei grafici e nelle tabelle.
    In particolare i grafici sono incompleti e alcune tabelle mancano.
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  • Robert Ciszewski
    1.0 out of 5 stars Bad quality
    Reviewed in Germany on June 10, 2025
    Verified Purchase
    Poor print quality, text and mathematical formulas are printed on top of each other.
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    Robert Ciszewski
    1.0 out of 5 stars
    Bad quality

    Reviewed in Germany on June 10, 2025
    Poor print quality, text and mathematical formulas are printed on top of each other.
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  • Abdullah Sadi
    3.0 out of 5 stars 5 Stars for the content, 3 stars the physical copy
    Reviewed in the United Kingdom on December 21, 2021
    Verified Purchase
    This book is no doubt one of the best investment books out there that attracts mostly long term investors. So what the book contains really does not need any review in my opinion.

    But I am not happy with the cheap paperback I got for the money I paid. It is not worth the price I paid for the copy in my opinion. The print quality inside is good, but the printing itself is almost edge to edge on the papers, making it look like the publisher tried saving paper as much as possible, leaving the minimum amount of margin space possible. That will make it difficult to write notes in margins!

    With this book, I also ordered 8 other books in total and they are all great.
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