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The Little Book of Valuation: How to Value a Company, Pick a Stock and Profit
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The Little Book of Valuation: How to Value a Company, Pick a Stock and Profit

3.96  ·  Rating details ·  1,301 ratings  ·  72 reviews
An accessible, and intuitive, guide to stock valuation Valuation is at the heart of any investment decision, whether that decision is to buy, sell, or hold. In The Little Book of Valuation, expert Aswath Damodaran explains the techniques in language that any investors can understand, so you can make better investment decisions when reviewing stock research reports and enga ...more
ebook, 256 pages
Published March 29th 2011 by Wiley (first published March 21st 2011)
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Average rating 3.96  · 
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Jeremy Reeves
Apr 02, 2013 rated it really liked it
Good stuff for more advanced investors. A little too advanced for me which made it hard to read, but that's how you grow :) ...more
Vikash Anand
Aug 14, 2019 rated it it was amazing
The Little Book of Valuation by Aswath Damodaran gives comprehensive overview of factors that needs to be taken into account for valuation of a company while investing. The book gives immense value in terms of understanding valuation of a company.

Value investing is the discipline of buying securities at significant discount from their current values and holding them until more of their values is realized. Valuing a company/business is the most important aspect of investing. It’s a daunting task.
...more
Martin Helgeby
Oct 19, 2020 rated it it was amazing  ·  review of another edition
I see a few reviews commenting on level of difficulty in reading this book so I’ll add my $0.02. For whom is it suitable?

I personally read this book to serve as both a refresher and primer in the subject: having taken various bachelor’s level courses in finance some 10 years ago as part of my degree, without having spent any of my subsequent professional life working specifically in valuation; and preparing to read the subject as part of an MBA this autumn. For others with a similar background o
...more
Paramveer
Apr 01, 2017 rated it it was amazing  ·  review of another edition
A good read for understanding basic principles of valuation of a company.

Crisp, clear, easy to understand, limited usage of jargons, covering all the scenarios and different types of companies. Just basic knowledge of finance required to understand, very practical cases explained.
brother_rebus
Apr 28, 2020 rated it it was amazing
Great quick book for gaining unique insights on dual valuation methods. After reading, plan to use as a reference book for replacing given examples with your looks & picks.
Jiliac
Aug 26, 2020 rated it it was amazing
Shelves: finance
What an awesome book! Hypothesis: you are already a convinced "value investor". Damodaran argues a little in favor of this approach, but not much. This book is not an introduction to the subject. Graham, "The Intelligent Investor", would be a better starting point. The *goal* of this book: give you all the tool to determine a value for any good. While Damodaran pays lip service to relative valuation, the book really is about Discounted Cash Flow valuation (DCF). The books teaches you how to set ...more
Helen
Jun 05, 2015 rated it liked it
Shelves: lib, e-books, inv-fin
This is a great book for the experienced or advanced stock market investor, but not so great for the beginner or casual investor. It's too technical and reads like an economics textbook or a math book with complex equations and formulas.

I rated this book 3 stars, not because it's an average book, but because it focuses specifically on valuation (as the title states), which is not what I'm interested in at this time. However, it's a great reference book and I'm sure I'll be returning to it in th
...more
Effendy Yahaya
Sep 21, 2014 rated it it was amazing
i love it! for all the varies in valuation method, it emphasis on what you are really keen on to assess for certain organization. Key valuation on whether intrinsic of relative value bring more towards assessing risk that affects value. Adjusted PE ratios and ammortized R&D must be taken seriously towards proper weight in both valuation and demand by market value, highly to be considered. "Look at the past, and the think about the future!" Thanks Aswath! ...more
Iliya Polihronov
Dec 07, 2016 rated it it was amazing
Aswath Damodaran does a good job of introducing the different concepts of valuation and describes well and with examples how to use these different valuation methods in practice. Might be a somewhat overwhelming if that's the first thing you read on valuation, as this little book is packed with information. ...more
Indra
Oct 27, 2016 rated it really liked it
A great resource and an enjoyable read for non-finance folks and anyone interested in investments. The author makes complex concepts into easily understandable short paragraphs, while giving concrete examples and comparisons between different approaches.
Christopher Durand
Nov 25, 2014 rated it really liked it
Very brief but contains tons of information. An absolute must if your interested in valuation.
Kevin
Feb 02, 2015 rated it it was amazing
Shelves: business
Very good overview of different valuation strategies for different types of companies. Provides the perfect place to delve further into valuation methods and start performing them myself.
Hariharan Ragunathan
Best beginner book to understand valuing companies - Intrinsic & relative valuation of companies across across different life cycle of companies.
Alex Gleason
Mar 21, 2015 rated it liked it
Three and a half. Really good.
Pranjal Bhatia
Apr 16, 2015 rated it it was amazing
Fast Forward version of Damodaran on Valuation -- Must read for all wannabe investors
Adhiraj Jain
Feb 19, 2021 rated it really liked it
I read this book at a really interesting time. In a market that has supposedly forgotten the word ‘valuations’, I think this book is a good read as a reminder for investors like me in a market where it seems that the majority of the crowd has come to a consensus that ‘valuations don’t matter. So, here is a refreshing little book on the art of valuation. Aswath Damodaran has written this book with utmost simplicity such that it's extremely easy to understand.
Valuations can be a tricky area for in
...more
Frederic Kerr
Apr 29, 2018 rated it liked it
The title is a misnomer, as the author spends no time on stock picking. He does break down several valuation methods and suggests which might be most relevant in various situations as companies grow, mature and decline.

There is not much discussion of earnings or cash flow based multiples and their application to various sectors, as he prefers the bottom up, discounted cash flow models that comprise the bulk of the book. These are more rigorous but are also rife with assumptions.

Despite the titl
...more
James Ford
Aug 14, 2020 rated it it was ok
This book really only covers the very basics of valuation and does so in a bit more of a technical way, not sure who the intended audience would be. I was disappointed mainly because I am a big fan of Damodaran's and very much enjoy his other writings, especially his blog posts. Did not take away much from this book unfortunately.

Notes:

1 - "companion variables": key variable that dominates when it comes to explaining each multiple.
2 - intangible assets are often expensed rather than capitalized.
...more
Luke Durbin
Jan 19, 2020 rated it really liked it
For such a small book, this certainly packs a punch. The valuation principles outlined by Damodaran are sound and succinctly expressed. While I acknowledge that this is intended to be a short read covering the essentials, I would have awarded an additional star if the examples were a little more fleshed out.
That said, Damodaran is the top of his field in valuation and corporate finance and he does provide in an depth companion to the book on his website damodaran.com. I have gone down the rabbi
...more
Justin Aquino
Aug 21, 2018 rated it it was amazing
Shelves: studies
I'm In plant operations for a developing world company. Our challenges is valuing our internal investments and justifying the manhours in process and system improvement this book is instrumental in making me more capable in valueing equipment, processes, and skills - things a low Biz process maturity company needs to prioritize improvements to justify investments in time and effort.
Of course it's one thing if one person understands such concepts it's another if the board can see the utility of t
...more
Bozhidar
Aug 06, 2020 rated it really liked it
Shelves: personal-finance
An approachable and short introduction to the complex subject of valuations. Nothing more, nothing less. While some formulas might be a bit intimidating you don't really need to know much about mathematics or finance to benefit from this book. For me the most useful topics in the book were the different valuation models for the different types of businesses - e.g. young, growth and mature companies, financials, cyclicals/commodity producers, etc. ...more
Kaustubh Chaharia
Apr 18, 2018 rated it it was ok
Shelves: investing
The book has a few interesting points on business valuations here and there in bits and pieces. Author has used a lot of formulas to be used while valuing a company - something that put me off. If I have to pick one chapter to read from this book, it'd be the last one - valuation of firms with intangible assets. ...more
Keshav Jangra
Feb 11, 2019 rated it liked it
An overview into the concept of valuing companies. This book is a good first read for someone trying to understand the basics of valuation. While the examples in the book are only hypothetical, they help explain the basic things to keep in mind while attempting valuations. This clarifies that valuations aren't an exact science but estimates and could vary from person to person. ...more
Jai Gupta
Nov 10, 2017 rated it liked it
I've read both, this version as well as the first draft of the book and the latter is much better since it has what it says. This final version is a bit too jazzy and has unnecessary metaphors and illustrations. ...more
Ivan Kuznetsov
May 05, 2018 rated it really liked it
Damodaran is an oustanding teacher and mentor with incredible ability to share his knowledge. I would have preferred to see more examples and case studies but this is largely offset by all the blogs, other books and models built and shared by Mr. Damodaran with the public.
Alessandro Orlandi
Jun 13, 2019 rated it really liked it
Shelves: investors
I think that it's interesting given the fact that valuing companies it's hard job and there are thousand ways and approach. It's a nice attempt from Aswath to do that, but I think that unfortunately the result it's even more confusing and puzzling.
...more
Sandip Bhattacharya
Not for novice

This is not for beginners. Novice in stock market should not try to understand valuation from this book. People with basic knowledge of financial valuation can buy it.
David Blynov
A brief guide to which factors must be accounted for when making a value judgement in order to know whether or not a company stock is worth buying. Talks about intrinsic vs relative valuing in different contexts.

3.9/5, wish I understood more than I did
Francisco
Jul 16, 2020 rated it liked it
This book has a lot of insight in general company valuation. It's more intrinsic valuation biased and it's best practised than read as it contains a reasonable amount of numbers and calculations. Good for intermediary investors and not beginners. ...more
Kevin Wu
Dec 30, 2020 rated it really liked it
Ngl I’m pretty stoked on Aswath Damodaran. Pretty good book, but I’ll hark what other reviews say: it’s technical, a little rough, but a great crash course into valuation. Shout out to Papa Werling for the recommendation.
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Aswath Damodaran is a Professor of Finance at the Stern School of Business at New York University (Kerschner Family Chair in Finance Education), where he teaches corporate finance and equity valuation. He is best known as author of several widely used academic and practitioner texts on Valuation, Corporate Finance, and Investment Management.

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