Aswath Damodaran

Clearly I'm not up to the level of this book; there's lots I still have to learn about this business and I do plan to revisit this book after I get a better hold on this subject.

Having said, I did learn quite a few things about valuation - intrinsic vs relative, being the main categories there are towards the valuation of a company. The author explanation about how banks, tech/pharma and manufacturing companies are all very different types of companies.

But after doing for some accounting practices (honestly, I didn't understand what those were), apparently, they're all on the same field and the value of any company rests on three ingredients: cash flows from existing assets, the expected growth in these cash flows, and the discount rate / uncertainty that reflects the risk in those cash flows.

The core of the book seemed to be about Discounted Cash Flow - again one of those things that I'd like a book that teaches DCF from the very basics.

Giving a 5-star since this book definitely taught me some things and I'm encouraged to learn more about it.… (mehr)

Professor Damodaran basically holds that narrative and numbers are linked: The founder needs a story to justify his valuation, and the publicist needs numbers to validate her pitch. Quants will enjoy Damodaran's portfolio manager approach, judging from the sharp-pencil references to Tufte and Bayes in the margins of my borrowed copy. Still, communicators who can handle a bit of MBA-level analysis can learn a lot from his observations. A forecast can be imprecise yet accurate (reading this in 2020, I thought about Bill Gates warning of a once-in-a-century pathogen). A market can grow only so big, and one brand gets only a share of it. VCs and value investors have different outlooks on growth. Corporate news is better framed around assets rather than earnings (would accountants agree?). Often the economy's in charge, not the boardroom. Startups have more room for narrative than mature companies. Finally, CEOs should stick to their story and act accordingly to reach a satisfying conclusion.… (mehr)