Let me start with a confession. All of my valuaton books are built around the same first principles and you can probably get away getting any of them. The differences, though, reflect both the focus that each brings to valuation and the target audience. Thus, if you want a book that follows a text book format, with chapters on each topic sequentially, followed by practice problems, Investment Valuation is the right choice; just buy the cheapest version of it you can find, preferably in the most recent edition. Damodaran on Valuation was my very first book, and it has changed the most since its first edition, partly because I have learned more about what I don't know since I wrote the first edition, and partly to reflect the damage that I have seen the loose ends in valuation (like control, synergy and brand names) do to valuations. The Dark Side of Valuation remains one of my favorite books, simply because I have always believed that valuation tools are remarkably adaptable to different markets and sectors and this book gives me a chance to put that proposition to tests. If you are investor or someone who wants just a big picture perspective on valuation, I would suggest either the Little Book of Valaution or my more recent book, Narrative and Numbers.
Topic | Description | Target Audience | My take |
Damodaran on Valuation | Covers basics, but focus is on the loose ends in valuation (valuing synergy, control, illiquidity etc.). |
Appraisers and Analysts |
If your work requires wresting with loose ends, this book is for you. |
Investment Valuation | My only valuation textbook. Covers the DCF inputs (cashflows, growth & risk) in the most detail, and also covers pricing and real options. |
Valuation classses |
Long and not meant to be a quick read. It has problem sets and supplements my regular class. It is sold in both university & trade editions, but they are identical. |
The Dark Side of Valuation | Valuation of difficult-to-value companies, from start-ups to commodity companies |
Practitioners in difficult-to-value sectors/markets. |
Suited for someone who already understands the basics of valuation. |
The Little Book of Valuation | A compressed version of the Dark Side of Valuation |
Investors |
Gives you a big picture perspective on valuation. |
Narrative and Numbers | Understand how valuation models (and spreadsheets) connect to stories |
Everyone |
I try to bridge different disciplines (from strategy to finance to marketing) and to work on my weak side (which is story telling). |