A survey of the theory and evidence aswath damodaran stern school of business, new york university, 44 w. Damodaran said he is uncertain about the companys ability to. The dark side of valuation valuing stable, money making companies with consistent and clear accounting statements, a long and stable history and lots of comparable. Aswath damodaran looks at a range of these companies, from startups in new businesses to distressed companies, from banks facing regulatory. If you want a book to accompany this class, try one of my valuation books i have four. Valuing moneymaking companies that have long histories and established business models is straightforward. He is often referred to as wall streets dean of valuation. The dark side of valuation aswath damodaran if this is your first visit, be sure to check out the faq by clicking the link above. Aswath damodaran begins with an overview of the markets dramatic shift towards technology stocks specifically new technology stocks. A jedi guide to valuing difficulttovalue companies. His books include damodaran on valuation, investment valuation, corporate finance. Damodaran 15 approaches to valuation discounted cash. He teaches the corporate finance and equity valuation courses in the mba program. The comprehensive guide to valuing technology companies projections for future revenues, earnings, cash flows, the impact of stock options, and more 5 detailed case studies cover the entire tech lifecycle.
Valuation should play a central part of acquisition analysis. But the pricing of many assets has become a more complex task in modern markets, especially after the recent financial crisis. Basis for approach where cf t is the cash flow in period t, r is the discount rate appropriate given the riskiness of the cash flow and t is the life of the asset. Then you can start reading kindle books on your smartphone, tablet, or computer no kindle device required. Vanquishing the dark side overcoming the temptation to use unrealistic or simplistic valuation methods revisiting the macro inputs that go into valuation. You can read the preface to the book by clicking here. The true test of your valuation skills is when you have to value dif. Theory and practice, and applied corporate finance. Aswath damodaran, kerschner family chair in finance education, nyu stern, on the dark side of valuation, took place friday, january 11, 20 but was posted. The true test of your valuation skills is when you have to value difficult companies.
This becomes a bit of a challenge for firms that are engaged in multiple businesses and operate in many countries, since usually there is no other company. It is when you encounter difficulttovalue companies that you feel the urge to go over to the dark side of valuation where you abandon first principles. He discusses the nuances of valuing firms that are in different parts of the life cycle as well as in different industries. It is when you encounter difficulttovalue companies that you feel the urge to go over to the dark side of valuation where you abandon first principles and create new metrics. The little book of valuation by aswath damodaran damodaran confesses in the books preface that even though valuation models can. Merton 1973 2 introduced the riskneutral valuation model for financial assets. In the dark side of valuation, the worlds top expert on valuation brings together todays best practices for accurately valuing young, distressed, and complex businesses.
Aswath damodaran has thoroughly revised this book, broadening its perspective to consider all companies that resist easy valuation. Wikimedia commons nyu finance professor aswath damodaran is widely respected for his work in valuation. Security analysis for investment and corporate finance enter your mobile number or email address below and well send you a link to download the free kindle app. Firms with no earnings, no history and no comparables 1999.
Valuing stable, money making companies with consistent and clear accounting statements, a long and stable history and lots of comparable. Mauboussin, chief investment strategist, legg mason capital management and author of more than you know. What you must know about riskfree rates, risk premiums, and other macroeconomic assumptions valuing idea and nascent companies. Value investors generally characterize themselves as the grown ups in the investment world, unswayed by perceptions or momentum, and driven by fundamentals. This is an online valuation class that aims to compress what i do in a regular valuation class into bite size pieces about 1220 minutes apiece.
Aswath damodaran looks at a range of these companies, from startups in new businesses to distressed companies, from banks facing regulatory turmoil to commodity firms. The dark side of valuation 3rd edition by aswath damodaran. This 3rd edition is now 740 pages long but it is arguably necessary given the amount of material damodaran covers. Aswath damodaran, kerschner family chair in finance education, nyu stern, on the dark side of valuation, took place friday, january 11, 20 but was posted in june and likely not discovered until now. If you are interested in the theory or practice of valuation, you should have damodaran on valuation on your bookshelf. For an asset to have value, the expected cash flows have to be positive some time over the life of the asset. Aswath damodaran is professor of finance at the stern school of business at new york university. How global prosperity is reshaping our needs, values, and lifestyles. Aswath damodaran looks at a range of these companies, from startups in new businesses to distressed companies, from banks facing regulatory turmoil to.
Valuing young, distressed, and complex businesses, 3rd edition. Wall streets dean of valuation makes a surprising call on tesla. The dark side of valuation this book looks at the valuation of technology firms, using five technology firms, ranging from motorola to to rediff. Relative valuation, estimates the value of an asset by looking at the pricing of comparable assets relative to a common variable like earnings, cash. Valuation by parts recall that the idea behind relative valuation i.
This cited by count includes citations to the following articles in scholar. Investment valuation, damodaran on valuation, the dark side of valuation and the little book on valuation less. 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. Firms with no earnings, no history and no comparables can be valued. Finding financial wisdom in unconventional places damodaran on valuation is a marvel.
Aswath damodaran has published four books on equity valuation damodaran on valuation, investment valuation, the dark side of valuation, the little book of valuation and two on corporate finance corporate finance. He has coedited a book on investment management with peter bernstein investment management and has two books. The dark side of trying to invest in young, fastgrowing companies like facebook. In order to be successful at this endeavor, you must have a firm. May 05, 2017 wall streets dean of valuation makes a surprising call on tesla. Jun 28, 2018 new edition of the dark side of valuation. The models that we use in valuation may be quantitative, but the inputs leave plenty of room for. Valuing old tech, new tech, and new economy companies kenneth r. Damodaran contrasts the dark side and the light side of valuing different types of firms. Avoiding the winners curse international business peter marber money changes everything. Aswath damodaran investment valuation easyonlinebooks.
Wall streets dean of valuation makes a surprising call on. The definitive source of information on all topics related to investment valuation tools and techniques valuation is at the heart of any investment decision, whether that decision is buy, sell or hold. Wall streets dean of valuation makes a surprising call. Valuing young, distressed, and complex businesses by aswath damodaran.