Book on valuation framework

[jaguar]

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Basically, most value investors regard large portions of academic financial teachings as useless rubbish. Specifically the ideas that the market is always efficient, or that a stock's beta measures it's risk level.


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I have yet to run into anyone in the finance community who really belives markets are 100% efficient. Also for the market to be fully efficient there have to be plenty of people beliving that it isnt effeicent that are researching prices looking for mispriced assets. If the market was fully efficient such work wouldnt be worth its time and to few people would do it and therefor the market cant stay fully efficient. Point i want to make is that most people belive that assets can be mispriced but the price tend to adjust to the value of the cashflow for the asset. The EMH is however a quite useful assumption when designing models.


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You probably don't to hear that that some people regard that expensive education you worked so hard for as worthless (but you don't have to agree with them either!)

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I must be lucky that education is free in my country and its a good excuse to be able to play poker without having people too look down on you as a gambling loser. =)

Thanks for the tip however, will add this to my long "to read" list.

[adios]

You can also download his latest version of Investment Valuation as well.

[lu_hawk]

Valuing companies precisely is very difficult to impossible, what is much easier is finding companies that are so far off from what they should be worth that you don't need to be precise. Believe what I say and read books that will help you learn to think this way. Any book that contains a formula with more than 2 variables should definitely not be read.

[Sniper]

Valuation is in the eye of the beholder!