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Investment Valuation: Tools and Techniques for Determining the Value of Any Asset
Investment Valuation
Tools and Techniques for Determining the Value of Any Asset
Valuation is at the heart of every investment decision, whether that decision is to buy, sell, or hold. But the pricing of any financial asset has become a more complex task in modern financial markets. Now completely revised and fully updated to reflect changing market conditions, Investment Valuation, Second Edition, provides expert instruction on how to value virtually any type of asset-stocks, bonds, options, futures, real assets, and much more.
Noted valuation authority and acclaimed NYU finance professor Aswath Damodaran uses real-world examples and the most current valuation tools, as he guides you through the theory and application of valuation models and highlights their strengths and weaknesses.
Expanded coverage
* Valuation of unconventional assets, financial service firms, start-ups, private companies, dot-coms, and many other traditionally valued assets
* Risk in foreign countries and how best to deal with it
* Using real option theory and option pricing models in valuing business and equity
* The models used to value different types of assets and the elements of these models
* How to choose the right model for any given asset valuation scenario
* Online real-time valuations that are continually updated at www.damodaran.com
A perfect guide for those who need to know more about the tricky business of valuation, Investment Valuation, Second Edition, will be a valuable asset for anyone learning about this critical part of the investment process.
Tools and Techniques for Determining the Value of Any Asset
Valuation is at the heart of every investment decision, whether that decision is to buy, sell, or hold. But the pricing of any financial asset has become a more complex task in modern financial markets. Now completely revised and fully updated to reflect changing market conditions, Investment Valuation, Second Edition, provides expert instruction on how to value virtually any type of asset-stocks, bonds, options, futures, real assets, and much more.
Noted valuation authority and acclaimed NYU finance professor Aswath Damodaran uses real-world examples and the most current valuation tools, as he guides you through the theory and application of valuation models and highlights their strengths and weaknesses.
Expanded coverage
* Valuation of unconventional assets, financial service firms, start-ups, private companies, dot-coms, and many other traditionally valued assets
* Risk in foreign countries and how best to deal with it
* Using real option theory and option pricing models in valuing business and equity
* The models used to value different types of assets and the elements of these models
* How to choose the right model for any given asset valuation scenario
* Online real-time valuations that are continually updated at www.damodaran.com
A perfect guide for those who need to know more about the tricky business of valuation, Investment Valuation, Second Edition, will be a valuable asset for anyone learning about this critical part of the investment process.
992 pages, Hardcover
First published January 1, 1995
262 people are currently reading
2925 people want to read
About the author
Aswath Damodaran
88 books726 followersAswath Damodaran is a Professor of Finance at the Stern School of Business at New York University (Kerschner Family Chair in Finance Education). He is well known as the author of several widely used academic and practitioner texts on Valuation, Corporate Finance and Investment Management; as well as a provider of comprehensive data for valuation purposes.
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Displaying 1 - 21 of 21 reviews
February 12, 2021
Really interesting book. It reminds me a bit of How to Measure Anything: Finding the Value of "Intangibles" in Business which is one of the best business books I've ever read (my review).
Professor Damodaran has a clear, basic writing style so the reader doesn't have to be a CFA or CPA to easily understand the concepts he presents. Each concept is described in text as well as an equation (where appropriate). The book is well-edited, too, so there's little unintended repetition.
This is such an informative book, I wish I'd found it when I first started investing.
Note: The author says there's no difference between Investment Valuation and the University Edition, and to just buy which ever one is cheaper.
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Professor Damodaran gave a talk at Google. Fun, interesting video: https://www.youtube.com/watch?v=uH-ff...
Professor Damodaran has a clear, basic writing style so the reader doesn't have to be a CFA or CPA to easily understand the concepts he presents. Each concept is described in text as well as an equation (where appropriate). The book is well-edited, too, so there's little unintended repetition.
This is such an informative book, I wish I'd found it when I first started investing.
Note: The author says there's no difference between Investment Valuation and the University Edition, and to just buy which ever one is cheaper.
------
Professor Damodaran gave a talk at Google. Fun, interesting video: https://www.youtube.com/watch?v=uH-ff...
January 29, 2009
I read this book for the first time when I was a freshman, then again when I was a sophomore, then again when I was a junior/senior. If you are serious about valuation this is a must.
December 4, 2020
Great book about pegging a value to any asset. From public companies like Palantir to paintings like Picasso. Aswath Damodaran has the formulas laid down step by step in this book.
The professor is great at finding an asset and informing you of when you've found something that is priced more than it's worth or when you've found a bargain at 20% below its value. So you're buying a dollar for 80 cents, essentially.
However, the book misses the boat, from an investing standpoint because sure you've bought an asset at a good price, but how do you know that that asset is going to then grow into a gigantic company much larger than it was when you bought it? And for me, the answer to that question is "rate of innovation". You can see how Amazon surpassed Walmart because Amazon runs 5,000 experiments per year now, however, when was the last time you something new or innovative at Walmart? Never.
The professor is great at finding an asset and informing you of when you've found something that is priced more than it's worth or when you've found a bargain at 20% below its value. So you're buying a dollar for 80 cents, essentially.
However, the book misses the boat, from an investing standpoint because sure you've bought an asset at a good price, but how do you know that that asset is going to then grow into a gigantic company much larger than it was when you bought it? And for me, the answer to that question is "rate of innovation". You can see how Amazon surpassed Walmart because Amazon runs 5,000 experiments per year now, however, when was the last time you something new or innovative at Walmart? Never.
December 14, 2008
Hohoho this book makes me understand especially about sensitivity analysis, beta, and so on...
Still hoping I will got score A for Corporate Valuation hehehe
Still hoping I will got score A for Corporate Valuation hehehe
January 14, 2023
This book was published a long time ago, back in 2012. It is the most popular book on valuation. Despite its immense popularity and the vast number of reviews available, I still felt compelled to share my thoughts on it, as my opinion differs from that of other readers.
Please keep in mind the following. I read the Investment Valuation book to improve my trading and investing performance, not aiming to become a certified financial specialist.
The author lacks clarity in expressing his thoughts in a way that is easily understandable for readers. The sentences in the book are very long and confusing. The Investment Valuation book offers valuable insights. However, extracting them will require a considerable amount of your precious time and effort.
Unfortunately, this book holds a near-monopolistic position in its field of knowledge. There is also a comprehensive book on investment valuation written by McKinsey staff. Many readers say it is even worse in quality than Damodaran's book. Currently, I have no plans to check it myself.
Note. As I write this review, I am yet to become acquainted with Aswat Damodaran's videos and articles. Perhaps they are more digestible. I have read several chapters of his book on risk management. It has the same awful style as Investment Valuation. However, it has several alternatives.
I highly recommend reading The Five Rules for Successful Stock Investing by Pat Dorsey as your first step towards successful stock investing. Begin your in-depth exploration of Investment Valuation only after you have completed it.
You would better have some understanding of the discounted cash flow method beforehand. Otherwise, you may get confused in the book of Damodaran. Also, from Pat Dorsey, you will learn about the moats that protect some companies from competitors and make them more valuable. It is a hugely important concept that Damodaran doesn't even mention.
Also, please read the Investment Valuation book only after you have completed at least an elementary course in statistics.
You must know how to test the hypotheses rigorously, what a p-value is, and how to apply linear regression. Beyond that, you should understand the limitations of statistical methods, why sample size matters, and how to avoid delivering overconfident conclusions. Aswath Damodaran uses statistical tools in his book but does not explain the basics.
I hope that one day, a book on investment valuation with the same level of detail but superior writing will become available. However, since 2012, it has not happened.
Please keep in mind the following. I read the Investment Valuation book to improve my trading and investing performance, not aiming to become a certified financial specialist.
The author lacks clarity in expressing his thoughts in a way that is easily understandable for readers. The sentences in the book are very long and confusing. The Investment Valuation book offers valuable insights. However, extracting them will require a considerable amount of your precious time and effort.
Unfortunately, this book holds a near-monopolistic position in its field of knowledge. There is also a comprehensive book on investment valuation written by McKinsey staff. Many readers say it is even worse in quality than Damodaran's book. Currently, I have no plans to check it myself.
Note. As I write this review, I am yet to become acquainted with Aswat Damodaran's videos and articles. Perhaps they are more digestible. I have read several chapters of his book on risk management. It has the same awful style as Investment Valuation. However, it has several alternatives.
I highly recommend reading The Five Rules for Successful Stock Investing by Pat Dorsey as your first step towards successful stock investing. Begin your in-depth exploration of Investment Valuation only after you have completed it.
You would better have some understanding of the discounted cash flow method beforehand. Otherwise, you may get confused in the book of Damodaran. Also, from Pat Dorsey, you will learn about the moats that protect some companies from competitors and make them more valuable. It is a hugely important concept that Damodaran doesn't even mention.
Also, please read the Investment Valuation book only after you have completed at least an elementary course in statistics.
You must know how to test the hypotheses rigorously, what a p-value is, and how to apply linear regression. Beyond that, you should understand the limitations of statistical methods, why sample size matters, and how to avoid delivering overconfident conclusions. Aswath Damodaran uses statistical tools in his book but does not explain the basics.
I hope that one day, a book on investment valuation with the same level of detail but superior writing will become available. However, since 2012, it has not happened.
February 27, 2018
Totally awesome book on the subject. especially if you sum it with the Free video of valuation course on Prof.Damodaran website. there is all material you need for valuation: Video, presentation, question, and instruction on how to implement such a model. Well done professor.
October 25, 2019
Damodaran is one of the world's leading experts when it comes to valuation. The book offers a great base for everyone interested in this topic. Besides the book I also highly recommend his NYU lectures. You can find them online. His views are transforming the industry.
April 9, 2018
An essential for anyone that work in finance; almost a bible by itself. This is an absolute must have.
September 15, 2018
Full of examples and deeply explanation. Really recommended but for one who already has background knowledge in finances.
May 19, 2020
For us practicioners, this title is omnipresent within our valuation efforts. A must.
November 30, 2020
It really helped me for my Master Thesis
January 25, 2021
Best there is. Difficult to top this.
September 7, 2021
Simply the best on the subject
November 12, 2023
Must read for valuation
August 12, 2024
Useful and practical
This textbook provides clear and simple explanation of what many authors might try to explain in more complicated and convoluted ways.
This textbook provides clear and simple explanation of what many authors might try to explain in more complicated and convoluted ways.
January 25, 2023
This book is the most comprehensive literature in the subject of investment valuation. There are so many methods to making an evaluation of an asset. Damodaran breaks down all the details and asks critical questions of all the evaluation methods by giving arguments and counter-arguments for all these methods.
This book is great for getting a lay of the land and being used as a reference while performing an evaluation.
This book is great for getting a lay of the land and being used as a reference while performing an evaluation.
May 7, 2015
Provides in-depth coverage on how to value firms.
June 9, 2017
I read this book for my Graduate Finance Equity Valuation Course.
It was riddled with so many errors I wanted my money back.
It was riddled with so many errors I wanted my money back.
May 21, 2013
Very clear and precise about valuation methods. Helpful technical manual.
April 25, 2015
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August 26, 2017
Standard textbook.
Displaying 1 - 21 of 21 reviews