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Valuation Readings


Blog Posts
Bias in Valuation  
  1. The Rise of Jack Grubman
  2. The Fall of Jack Grubman
  3. The Consequences of a Sell Recommendation
  4. A Sage on Enron
  5. Fairness Opinion: What's fair about it?
  6. Second Opinions?
  7. Regulation FD: The SEC's shot at evening the playing field
Valuation Approaches
  1. Thoughts on intrinsic value
  2. If you have a D(iscount rate) and a C(ash) F(low), you have a DCF
  3. If it is a strategic growth investment in China.. (March 2014)
  1. Dumb Investors, Smart Markets
  2. Why don't they teach you to invest like Warren Buffet?
  3. Valuation Basics (courtesy of the Motley Fool)
  4. Why don't they teach you to invest like Warren Buffett?
  5. An open letter to Warren Buffett (from a non-admirer)
Riskfree Rate
  1. Risk free Rates and Value: Dealing with historically low risk free rates
  2. The Fed, Interest Rates and Stock Prices: Fighting the Fear Factor
  3. January 2016 Data Update: Interest Rates, Exchange Rates and Currencies
  4. Negative Interest Rates: Impossible, Unnatural or just Unusual?
Estimating Riskfree Rates
Risk Premium
  1. An ERP Retrospective: Looking back and looking forward
  2. Another Market Crisis: My Survival Manual/ Journal
  3. January 2016 Data Update: The US Equity Markets
  1. Classic Rule of Risk Premium under attack (WSJ)
  2. Greenspan on the Risk Premium
  3. Estimating Risk Premiums
  4. Those were the days... An argument for lower risk premiums
  5. Historical Risk Premiums: A reexamination
  6. Country bond default spreads over time
Risk Parameters
  1. Alternatives to the CAPM - Part 1- Relative Risk Measures
  2. Alternatives to the CAPM - Part 2 (Proxy Models)
  3. Alternatives to the CAPM - Part 3 (Cost of debt based models)
  4. Alternatives to the CAPM - Part 4 (Market Implied Expected Returns)
  5. Alternatives to the CAPM - Part 5 (Risk adjusting cash flows)
  6. Alternatives to the CAPM - Part 6 (Wrapping up)
  1. Estimating Risk Parameters
  2. A contrary view on betas
Cost of Debt & Capital
  1. Putting the D in the DCF: The Cost of Capital
  2. January 2016 Data Update: The Costs of Capital
  1. S&P on the Ratings Process (Check under Ratings & Criteria)
  2. Off Balance Sheet Items
Estimating Earnings
  1. R&D: Implications for Profitability and Value
  1. R& D's effects on earnings
  2. Smoothing Earnings
  3. Is this debt?
  4. Operating Leases as Debt
  5. One-time Write off?
  6. The Accounting Black Box
  7. The Practices of Five Companies: GE, Coke, AIG, Williams and IBM
  8. Warnings Signs in Earnings Report
Cash Flows
  1. A Primer on Financial Statements
  2. Adjusting for Operating Leases
  3. Adjusting for R&D Expenses
  4. Accounting versus Cash Earnings
  5. Working Capital and Cashflows
Growth and Growth Patterns
  1. Growth (Part 1): The Limits of Growth (October 2011)
  2. Growth (Part 2): Scaling up Growth (October 2011)
  3. Growth (Part 3): The Value of Growth (October 2011)
  4. Growth (Part 4): Growth and Management Credibility (October 2011)
  5. How much is growth worth? (May 2012)

  1. Estimating Growth
  2. ROIC rules
  3. Measuring ROE and ROC rigtht
  4. The inside of earnings growth in the 1990s
  5. Evaluating analyst growth estimates
  6. Competitive Advantage Period
  7. Growth at young firms: How long does it last?
Terminal Value
  1. Dealing with low interest rates
Cash and Cross Holdings
  1. Parent versus Consolidated Financial Statements (June 2010)
  2. Cash and Cross holdings (May 2010)
  3. How much cash is too much cash? Looking at Apple (January 2011)
  4. Yahoo: A Puzzle, a Mystery and an Enigma (May 2014)
  1. Dealing with Cash and Cross Holdings
Dealing with options
  1. Stock Based Employee Compensation: Value and Pricing Effects (February 2014)
  1. Dealing with Management Options
  2. Option backlash at companies
  3. Options at dot.com firms
  4. The growth of option compensation and problems
  5. Market based solutions to pricing employee options
Value Enhancement
  1. Microsoft learning cost-cutting from GE
  2. Learning from the Super Companies
  3. Dare to keep your stock price low
  4. Value Enhancement: Back to Basics
  5. EVA as elixir
  6. An EVA debate
Narrative and Numbers
  1. Numbers and Narrative: Modeling, Story Telling and Investing (June 2014)
  2. Possible, Plausible and Probable: Big Markets and Networking Effects (July 2014)
  3. Reacting to Earnings Reporst: Narrative Adjustments and Value Effects (August 2014)
  4. DCF Myth 2: A DCF is an exercise in modeling and number crunching (August 2015)
  5. Narrative Resets: Revisiting a Tech Trio (August 2015)
  1. HP's deal from hell: The mark-it-up and write-it-down two step
  2. Acquisition Archives: Winners and Losers
  3. Acquisition Hubris: Over confident CEOs and Compliant Boards
  4. Acquisition Advice: Big deal or good deal?
  5. Acquisition Accounting I: Accretive (Dilutive) Deals can be bad (good) deals
  6. Acquisition Accounting II: Goodwill, more plug than asset
  7. Acquisition Alchemy: Creating value from deals
  8. Comcast bids for Time Warner: Synergy, Reverse Synergy or Ego Trip?
  9. Value and Taxes: Breaking down the Pfizer-Allergan Deal
  10. Winning at a Losers' Game? Control, Synergy and the Inbev/SAB Merger
  1. Synergy in Mergers
  2. The Keys to Success in M & A: The KPMG Report
  3. Stocks versus Cash Acquisitions: The Performance of Acquirers
  4. New Rules on Goodwill
  5. The Merger Bonus: Skewed Incentives?
  6. CEO Egos and Big Mergers
Relative Valuation
  1. Facebook buys Whatsapp for $19 billion: Value and Pricing Perspectives (February 2014)
  2. Incremental News, Price and Value: The Twitter Earnings Report and Market Reaction (February 2014)
  3. A Tangled Web of Values: Enterprise Value, Firm Value and Market Cap (June 2013)
  4. Storied Asset Sales: Valuing and Pricing "Trophy" Assets (August 2015)
  5. The Golden Rule? Thoughts on Gold as an investment
  6. Ballmer's Bid for the Clippers: Investment, Trade or Expensive Toy?
  1. Malkiel on PE ratios
  2. Interest rates and PE ratios
  3. Low price to book ratios: Not always a bargain
Asset Based Valuation
  1. Breaking up is easy to do (September 2011)
  2. Corporate Breakups: Value and Pricing Effects (October 2014)
  3. Focus Pocus: Is breaking up a cure for corporate attention deficit disorder?
  1. The Octopus: Valuing Multi-Business, Multi-National companies
Private Company Valuation
  1. Staying Private or Going Public: Changing Landscape (July 2011)
  2. Billion Dollar Babies: A Blessing of Unicorns or a Parcel of Hogs
  1. Valuing Young, Start-up and Growth Companies
Option Pricing Models
  1. Contrarian Investing: Going against the flow
  1. Making real options real
  2. Literature on real options in venture capital and R&D
  3. Real Options in Valuation
  4. Real Options and Business Strategy
  5. How much is flexibility worth?
  6. Get Real
  7. Reality Check: A skeptical look at real options
  8. The Real Power of Real Options