The tools and practice of valuation is intimidating to most laymen, who assume that they do not have the skills and the capability to value companies. In this talk, I propose to lay out four simple propositions about valuation. The first is that valuation is not an extension of accounting, insofar as it is not about recording the past but forecasting the future. The second is that valuation is not just modeling, where people put numbers into Excel spreadsheets and pump out values. A good valuation requires a narrative that binds the numbers together. The third is that valuing an asset or business is very different from pricing that asset or business, a difference that is often blurred in practice. The fourth is that luck plays a disproportionate role in whether you make money off your valuations. Put differently, you can do everything right and still walk away with nothing or worse at the end.
About the Author
I view myself, first and foremost, as a teacher. I do teach valuation and corporate finance not only to MBAs at Stern but to anyone who will listen (on iTunes U, online and on YouTube). I love to write books, teaching material and blog posts. After 30 years of teaching finance, I still find it fascinating as an interplay of economics, psychology and number crunching.
Ex-Barclays boss Diamond set for million payday
LONDON (Reuters) – Former Barclays chief executive Bob Diamond is set to be paid about 2 million pounds ( million) in July, a year after he left the bank following its Libor interest rate rigging scandal. Diamond is entitled to a year’s salary, pension and benefits, which will be paid in a lump sum on July 3, Barclays’ annual report released on Friday showed. Benefits include the use of a company car and chauffeur, private medical insurance, life insurance cover, accommodation while in Britain and tax advice. …
ECB should cut rates, allow higher inflation: Lagarde
DUBLIN (Reuters) – The European Central Bank should cut interest rates further and strong economies such as Germany should allow higher inflation and wage growth, the head of the International Monetary Fund said on Friday.
Icahn demands Dell pay billion dividend to avert fight
Activist investor Carl Icahn is demanding Dell Inc pay out .7 billion in special dividends, joining a growing chorus of opposition to founder Michael Dell’s plan to take the world’s No. 3 personal computer …
Google’s Motorola to Cut Staff 10%
Google Inc.’s Motorola Mobility hardware unit has begun laying off about 1,200 employees, or more than 10% of its headcount, according to a company email reviewed by The Wall Street Journal, as the smartphone …
Video Rating: / 5