andreweverett360 Book Review, Finance

Narrative and Numbers

Narrative and Numbers: The Value of Stories in Business

by Aswath Damodaran

Aswath Damodaran is a professor of finance at NYU who has written several books on business valuation, including The Little Book of Valuation: How to Value a Company, Pick a Stock, and Profit.

In this book, he computes valuation based on the business narrative. “One of the most important lessons I have learned is that a valuation that is not backed up by a story is both soulless and untrustworthy and that we remember stories better than spreadsheets.” Conversely, “when a storyteller has wandered into fantasyland, the easiest way to bring him or her back to Earth is with data that suggests the journey is either impossible or improbable.” Thus, “you need to bring both stories and numbers into play in investing and business, and valuation is the bridge between the two.” Continue reading “Narrative and Numbers” →

andreweverett360 Book Review, Finance

The Little Book of Valuation

the-little-book-of-valuation

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

by Aswath Damodaran

How do you determine if a stock is overpriced or a bargain? NYU finance professor Aswath Damodaran explains.

“There are dozens of valuation models but only two valuation approaches: intrinsic and relative… The intrinsic value of an asset is determined by the cash flows you expect that asset to generate over its life and how uncertain you feel about these cash flows. Assets with high and stable cash flows should be worth more than assets with low and volatile cash flows… In relative valuation, assets are valued by looking at how the market prices similar assets.”

Continue reading “The Little Book of Valuation” →

andreweverett360 Book Review, Finance

The Interpretation of Financial Statements

the-interpretation-of-financial-statements

The Interpretation of Financial Statements: The Classic 1937 Edition

by Benjamin Graham and Spencer B. Meredith. New Introduction by Michael F. Price

Benjamin Graham (1894-1976) was a pioneer in the field of value investing. He is most famous for being Warren Buffet’s teacher at Columbia Business School. The Interpretation of Financial Statements was originally published in 1937. This 122-page book focuses on the balance sheet and income statement. Graham also wrote Security Analysis, first published in 1934, and The Intelligent Investor, first published in 1949. Continue reading “The Interpretation of Financial Statements” →

andreweverett360 Book Review, Finance

Seeing the Big Picture: Business Acumen

seeing-the-big-picture-business-acumen

Seeing the Big Picture: Business Acumen to Build Your Credibility, Career, and Company

by Kevin Cope

The premise of this book is that an employee who understands business fundamentals will be taken more seriously by management. “If, through your questions, ideas, comments, analysis, proposals, and performance, you exhibit business acumen, you will be seen as a more valuable contributor. You will demonstrate your worth to the company, and other people will notice.” Continue reading “Seeing the Big Picture: Business Acumen” →