Book Description
This book was first printed in 1938, having been written as a Ph.D. thesis at Harvard in 1937. Our good friend, Peter Bernstein mentioned this book several times in his excellent Capital Ideas which was published in 1992. Why the book is interesting today is that it still is important and the most authoritative work on how to value financial assets. As Peter says: "Williams combined original theoretical concepts with enlightening and entertaining commentary based on his own experiences in the rough-and-tumble world of investment." Williams' discovery was to project an estimate that offers intrinsic value and it is called the 'Dividend Discount Model' which is still used today by professional investors on the institutional side of markets. Appendix, Tables, Index.
Customer Reviews:
Awesome book on classical valuation.......2007-01-05
This is probably one of the oldest, if not the first, serious academic works on valuation. The coverage is highly theoretical compared to the more practical valuation books of today (dividends are used instead of free cash flow, continuous time is used instead of discrete time, and "cookie cutter" product cycle scenarios are presented instead of more complex business forecasting).
The real value of this dissertation-turned-book though is its general insights. Although Warren Buffett doesn't tout this book as often as Graham's "Intelligent Investor", you will find that he utilizes the insights from this book almost as frequently.
Robert Stephenson-Padron
MSc student (economics & finance)
University of Navarra, Spain
An important work.......2006-06-15
The Theory of Investment Value is clearly an important work, as reflected in Benjamin Graham's citations to it and the prevalence of the dividend discount model in valuing stocks. The theories expounded in this book are of particular import to those to seek to by stock at a value less than the intrinsic value of a company as they determine it to be.
The book itself initially appears intimidating, as there are a lot of mathematical equations, but in reality, the math is nothing more than simple algebra, mostly different models related to computing dividend values going forward.
I found the book to be an interesting read, but it is highly theoretical in nature. The central theme of the book is that stocks are worth the present value of their dividends, paid in perpetuity. It does not discuss earnings manipulation, effect of dilution, securities with superior or inferior claim to payment, etc. Moreover, as Graham points out in Security Analysis, companies that have a high return on invested capital would be well advised to reinvest their profits, while less successful companies would be better off paying higher dividends (relative to book value). This would, of course, tend to make the practical application Williams' theory somewhat complicated, insofar as it makes computing future dividends more difficult.
Readers looking for a more practical guide to valuing stocks might be better served reading Securities Analysis by Benjamin Graham, or any number of more "practical" books related to stock market analysis, particularly as those analyzing financial statements to determine the intrinsic value of a company. Some readers might also find "The Aggressive Conservative Investor" by Marty Whitman and Martin Shubik to be a good read for a competing view, since the authors of that book take the position that, with respect to non-controlling shareholders, a company's stock is worth the net after-tax cash that they expect to realize in the future, whether from dividends, liquidating events, etc. However, if a reader is truly interested in obtaining an understand of how dividends affect stock prices, the book is a worthy read.
Heavy Stuff.......2005-09-21
Helpful book for a Fundamental Value Investor since it layed the groundwork on DCF methodology (1934). Helped me to understand how the DCF or Dividend Discount Model was derived but a good undderstanding of economics is required to follow the author's concept. The two case studies are a bit dry but very interesting both from a historic and Value Investing perspective.
Definately worth reading!.......2005-05-18
This truly is a fantastic book on stock and bond investing. It's one of the best investing books I've ever read. Toss out your mass-market Peter Lynch books, this one really gets down to what determines how much a stock is worth, which most ordinary investors probably don't understand at all. It shows you how to calculate intrinsic value and is full of math. Trust me, I'm no mathematician but I still loved it.
This is one of the books that influenced Warren Buffett. However, I would recommend this over Benjamin Graham's "Security Analysis" or Philip Fisher's "Common Stocks and Uncommon Profits". There's a reason why "The Theory of Investment Value" is still in print almost seven decades after it was first published.
Amazon.com lists the length of this book as 240 pages, but it is really 564 pages long.
Truly one of the most amazing finance books I have ever read.......1999-11-19
A book like this will continue to be a valuable investment for as long as there stock markets
Book Description
Value-at-risk (VaR) is a measure of market risk that has been widely adopted since the mid-1990s for use on trading floors. This is the first advanced book published on VaR. It describes how to design, implement, and use scalable production VaR measures on actual trading floors. It takes readers from the basics of VaR to the most advanced techniques, many of which have never been published in book form.
Practical, detailed examples are drawn from markets around the world, including: Euro deposits, Pacific Basin equities, physical coffees, and North American natural gas.
Real-world challenges relating to market data, portfolio mappings, multicollinearity, and intra-horizon events are addressed in detail. Exercises reinforce concepts and walk readers step-by-step through computations.
Sophisticated techniques are fully disclosed, including: quadratic ("delta-gamma") methods for nonlinear portfolios, variance reduction (control variates and stratified sampling) for Monte Carlo VaR measures, principal component remappings, techniques to "fix" estimated covariance matrices that are not positive-definite, the Cornish-Fisher expansion, and orthogonal GARCH.
* First advanced text on Value-at-Risk
* Practical, detailed examples drawn from markets around the world
* Exercises reinforce concepts and walk readers step-by-step through computations
Customer Reviews:
The Bible.......2006-03-30
I work in finance as a software developer. I had done some work with risk management and had read Jorion's book and Butler's. When I had to do my own VaR implementation, a colleague recommended Holton's book. It is amazing. The level of domain expertise is above anything else out there. It is sophisticated and well written. I thought I knew about VaR before reading Holton, but I didn't really. Now I know about VaR.
I noticed that someone has been posting negative reviews of the book here on Amazon. Those reviews are blatantly dishonest. I assume they are posted by a jealous competing author.
Holton is the bible.
Not helpful.......2005-06-27
This book looks good only at first sight. However, try and solve the exercises and you see there is more to VaR than the author wants us to believe. This book is too incoherent to be of any use. Just take a look at the index: A lot of things are introduced but are never used again later in the book. This makes me wonder why they were introduced at all. Some examples from the index: Hessian, GARCH, Markov process, etc.
The biggest fault however in my opinion is the treatment of Monte Carlo, the most essential tool for VaR calculation: Condensed in roughly 30 pages compared to roughly 110 pages for mathematical preliminaries and probability cannot cater to the same audience.
A good book on VaR.......2005-06-25
A good book on VaR, but finally lost its charming. Incomplete and solved cases in a pathetic manner. Theory: 80%, Practice: 10%, pathetic exercises 10%. This book doesn?t reflect its complete main purpose: theory and practice. I would choose mastering Value at Risk by Cormac Butler and Value At Risk by Jorion. My rate is 2 stars. Do it again. Don?t forget solved cases in spreadsheets.
A Smart Book.......2005-06-08
There are plenty of elementary books on VaR. This is an exception. It is a smart book for practitioners. It covers practicalities such as data cleaning, day counts and modeling intra-horizon events. It explains cutting-edge theory such as quadratic VaR, variance reduction techniques and holdings remappings. It introduces all the mathematics you need to know.
The prerequisites are modest -- about the same as for John Hull's book "Futures, Options and Other Derivatives." Holton does use some more advanced concepts, such as the Cornish-Fisher expansion or moment generating functions. He explains all of these before using them. Actually, he goes out of his way to make the mathematics accessible, devoting several chapters to explaining essential concepts. There are chapters on probability, statistics, the Monte Carlo Method, etc. Later in the book, whenever technical concepts come up, you will find an accompanying reference to an explanation in one of the earlier mathematics chapters. In this regard, the book is wonderfully self contained!
The author does make extensive use of matrix notation. This may take some getting used to if your background in linear algebra is limited, but it is worth it. Formulas that would be extremely complicated become simple when expressed with matrices. The author's notation is intuitive and used consistently throughout the book. If you see a symbol on page 10, it is going to mean exactly the same thing on page 310.
If you are serious about value-at-risk, this is the book to read.
no words needed - just buy it!.......2005-01-18
the ultimate resource for VAR theory and practice.
excellent writing, math and all.
don't spend time and money elsewere, just buy it!!
Book Description
PRAISE FOR ACHIEVING BUSINESS VALUE FROM TECHNOLOGY
"Clearly, IT investments have never before played such a critical part in business growth. The book addresses the weakness existing in most management systems involving the lack of a systematic process to realize the economic benefits of the IT investment and provides a clear A-Z methodology for business to bridge this gap. This book is clearly written for all levels and backgrounds in business management and is a must-do for those whose business involves IT, is considering IT, or would like to significantly tailor IT investments for their economic advantage."
—Professor Richard P. Wool, University of Delaware, President and CEO, Cara Plastics Inc.
"Tony Murphy addresses the difficult question of the value of IT investments head on. He translates an elegant theory into effective practice. The case studies in the book effectively reinforce his key messages."
—Dr. Dermot Moynihan, Senior Vice President, World Wide Chemical Development, GlaxoSmithKline
"This book is the answer to most CIOs' need for a well-structured, pragmatic, and easily implemented set of tools and practices designed to answer the universal problem of managing and measuring IT's contribution to the business. Tony Murphy's unique blend of practical experience, industry best practice, and excellent communication skills provides the reader with a valuable-and highly readable-guide on how best to achieve that elusive objective of reliably realizing the business benefits of IT investments."
—Michael Rice, oup Director of IT, Kerry Group plc
"At Oxfam we are one year into a three-year IT strategy based on the principles Tony Murphy lays out in this book, and there is a real, positive difference in how IT is perceived, and in its real strategic position within the organization. If you have ever wondered just how you can gain strategic alignment for your IT function, and then how to make the practical link to IT investment for the organization, Tony has provided a framework that joins them both."
—Simon Jennings, Head of Information Systems, Oxfam GB
Customer Reviews:
Clear modern thinking about Business Value.......2002-10-18
Clearly written, this book debunks some myths and sets a modern path towards pursuit of business value. We need plain talking books that bridge the business/IT divide and tell it the way it is.
Great reading and immediately useful.
Well written, well organized, very practical.......2002-10-08
I was leary when I saw the words "practical guide" in the title as I find that the phrase is often far from the truth. I guess I was in a gambling mood because I took a shot and found that this is a rare case where the advice here is actually implementable. The book includes detailed case studies, very specific advice on appropriate measures or "pillars" as the author calls them of IT project value, and lists of sample questions and metrics for each pillar.
All in all this is a very useful book for justifying IT projects particularly in today's environment when your pal the CFO is squeezing every penny trying to get blood out.
Book Description
Valuation Methods and Shareholder Value Creation provides a comprehensive examination of valuation tools and guidance for analyzing and valuing a business. It covers the basics of valuation methods and shareholder value creation in addition to rigorous approaches to discounted cash flow valuation and real options for valuing a company.
By examining eight different methods of discounted cash flow valuation and discussing the pros and cons of each method, Fernández offers thorough, accessible coverage of corporate valuation. With examples and case studies from international markets, this book provides well-structured guidance for students and executives alike.
* Highlights quantitative analyses of firm value
* Emphasizes qualitative management assessments
* Integrates data from international companies
Customer Reviews:
A great book with excellent support web site.......2002-11-18
A great book with clear explanations and excellent support web site.
The book describes many tools on how to do the valuation (DCF, ratios, real options etc.). I particularly like the explanation of eight models of DCF. Chapters 19, 20 and 21 are the best ones I have ever read about discounted cash flow valuation.
For finance professionals, "Valuation methods and shareholder value creation" is a wonderful book to study, to keep and to look up for reference. I strongly recommend investment bankers (and clients), finance managers and MBAs to have one.
It explains Adjusted Present Value much better than Copelandýs and Damodaran's books. Now, I understand it!!!
All the valuation methods that you ever wanted to read about.......2002-11-14
In his new book on valuation, Pablo Fernandez presents and analyzes a variety of valuation methods. The book is comprehensive in covering ALL of the methods and contains a wealth of information, data and examples on the relevant topics. The book is a valuable source for obtaining details on the different methods. However, there is a risk, although small, that the number of trees may overwhelm the reader and the reader may miss the forest.
In Part III, which is the theoretical part of the book, he examines all the various approaches for Discounted Cash Flow Valuation. In particular, Pablo Fernandez makes the unusual claim that for FCF in perpetuity with a constant growth rate of g, the discounted value of the tax shield (DVTS) is not the present value of the tax shield (PVTS). Furthermore, he defines the PVTS as follows: PVTS = T*D*Ku/(Ku - g). At first sight, this definition of the PVTS seems very strange. To obtain this result, which is in direct contradiction with the formulas in Copeland's book, he assumes that the return to levered equity Ke does not depend on whether the growth rate is zero or nonzero. This departure from the accepted definition of the PVTS may surprise those readers who are familiar with other books on valuation.
In common with other books on valuation, the examples on the cost of capital are restricted to cash flows in perpetuity. Without providing the necessary justification, the author assumes that the formulas for the cost of capital carry over to finite cash flows. The book would be strengthened if there were numerical examples that linked the discussion on the cost of capital directly to the finite cash flow statements that are derived from the usual financial statements.
Book Description
Discover the principles that made Warren Buffett a billionaire! Developed by legendary Wall Street wizard Benjamin Graham, mentor of Warren Buffett, value investing strategies are the most reliable, fail-safe, and successful money-making methods ever invested for investing on Wall Street. Janet Lowe presents these methods in a crisp, readable, and easy-to-understand style, covering, how to: Size up a company's growth prospects; Spot intentionally manipulated and misleading balance sheets and income figures; Create a "margin of safety" for your investments.
Customer Reviews:
Book:Value Investing Made Easy.......2007-08-06
Concise and through treatment for the uninitiated investor interested in investing in the long view.
"Graham Lite".......2006-06-16
This book was a decent introductory work to value investing a la Ben Graham, but it was just that, an introduction. It is quite a bit more readable than Security Analysis or The Intelligent Investor, but it also lacks the depth of these works.
In particular, this book does an excellent job of summarizing Graham's thoughts with respect to ratio analysis, management analysis, and provides a general overview of how to view financial statements. That being said, it does not explain how to "drill down" into financial statements and adjust them for various condictions as Graham sets forth in "Security Analysis."
Another weakness of this book is that it does not delve into anything other than common stock ownership. This might be a particular problem, as Graham, for example, advised that any issue senior to the one being analyzed must be viewed as debt, since it has a prior claim on the company's earnings. Hence, using Graham's analysis, dividends in respect of preferred stock would be deducted from earnings (as a payment on debt), whereas they are generally considered dividends on a par with common by many investors. Similarly, Security Analysis also discusses adjusting financial statements (for purposes of analysis, including ratio analysis) for warrants, etc.
In all, though, this book is a much easier read than any of Graham's works, and it certainly provides a good introduction to his theories of investing. I would recommend that anyone who likes what is said in this book read Warren Buffett's annual reports and any of Graham's books as well.
Key Lesson- Stick to the Proven Performers.......2006-01-04
The author touts the book as a distillation of the key concepts of Benjamin Graham's classic text, Security Analysis, but fails to elaborate on a key point repeatedly mentioned in Graham's book. Graham noted that at times, some bonds make for better investments than stocks as a class of investments, and at other times, some stocks make for better investments than bonds as a class. This readily follows from Graham's definition of an investment, which he stated most succinctly in his book for the novice investor, The Intelligent Investor:
An investment is any activity which provides safety of capital with a reasonable expectation of income. All other activities are speculative.
Lowe's book concentrates solely on stocks, and ignores the potential of bonds as an investment. As a result, the book distills only some of the wisdom of Security Analysis, which, by the way, can be found in a more accessible form in Graham's book, The Intelligent Investor.
By saying this, I do not mean to imply that Value Investing Made Easy is not a worthwhile read. Rather, it is the book the novice should read if and only if he or she does not want to spend the time reading Graham's Security Analysis, a formidable text nearly a thousand pages long (however, in Graham's defense, most of these pages are devoted to graphs, charts and numerous examples of the application of his techniques).
Lowe's book presents most of the important tenets necessary for picking stocks along the lines of Graham and Dodd (and Warren Buffett). A careful reader will notice, however, that the stock universe for which the tenets are applicable limits him or her to solely the proven performers. Among other things, these stocks typically, but not always, pay dividends, or have a history of doing so.
I found the text to be somewhat of a letdown because most of it was devoted to the justification for value investing, and not on the techniques of value investing per se. The book relied heavily on notable anecdotes- star performers of value investing fame such as (yep, you guessed it) Warren Buffett, Irving Kahn and others, and a bit less on the techniques in action as I would have liked.
However, in its defense, the book contains several pearls of wisdom that the novice investor would do well to know like the back of his or her hand. The book lays down an appropriate definition for intrinsic value, provides a satisfactory explanation of the role and importance of assets and dividends, and most important, the use and limitations of long-term trends in earnings and dividends to make assessments of stock investments.
On a personal note, I feel the most important lesson of the book is contained on Page 20 of the text- How Trustworthy Are the Numbers? Here, Graham warns us that, "Deliberate falsification of the data is rare; most of the misrepresentation flows from the use of accounting artifices, which it is the function of the capable analyst to detect. Concealment is more common than misstatement."
I leave the potential reader with one critical admonishment taken from the text (Page 21) which is perhaps the most relevant of all of Graham's tenets for the novice investor:
"When an enterprise pursues questionable accounting policies, all of its securities must be shunned by the investor, no matter how safe or attractive some of them may appear."
Value Investing Demystified?.......2002-09-16
Intended as a more digestible and accessible version of the teachings of the brilliant Benjamin Graham and his associate David Dodd, Ms Lowe expertly cuts a delicate path between writing, on one hand an overly simplistic overview and on the other an unneccessarily rigorous text book.
Although this Book is more theory than practice and certainly more Art than Science it nevertheless affords the Novice to Intermediate Investor an excellent interpretation of the thinking behind/and the implementation of Value Investment in the Stockmarket,a technique that rewarded it's true Practioners handsomely over the years throughout widely differing market conditions.All of Benjamin Graham's Stock Market Investment tenets,such as The Margin Of Safety, Intrinsic Value,the avoidance of speculation,the preservation of Capital,the need to think and act independently of the crowd,to build an extra margin of safety into estimates by using conservative figures etc,etc are clearly and vibrantly related to the Reader.
Janet Lowe adds value through the use of real life Companies as examples and each chapters comes with several very useful "sturdy pillars" or quotations from Ben Graham to elucidate the central thrust of the particular passage concerned.
Although well written and carefully researched I have some small gripes in that some of the mathematical formula are not that clear but that should not deter potential readers from buying this Book.Furthermore if Buyers are expecting the Book to explain how to calculate a useful range of current intrinsic values for a stock or answer questions such as "at the current price what growth rate is the Stock Market discounting for this Company" using simple fundamental analysis then they will be disappointed(for this purpose I would recommend the excellent "The Vest Pocket Guide To Vale Investing by C.Thomas Howard,ISBN 0-7931-1728-3)
More humourously, in these more politically correct times, Ben Graham's advice for Women to buy there Stocks as if they were buying their Groceries rather than their Perfume is admonished as being sexist.I wonder if Ben Graham had advised Men to buy there Stocks as if they were buying Gardening Equipment and not aftershave have received the same treatment?I don't think so!
However ,in conclusion, I feel this Book will serve as an invaluable guide for the ordinary Investor looking for a time tested and proven technique who is willing to exercise both patience and discipline
Perhaps Value Investing "demystified" rather than "made easy" would have been a better title.Nevertheless I feel that Ben Graham would have approved.
Nice Try - A misinterpretation of the concepts.......2002-07-17
I like the idea, but...
Having recently undertaken the wonderful journey of studying Benjamin Graham and Warren Buffett through reading most of their writings, I felt obligated to comment on this book. Many important concepts are nicely explained, and the format is pleasing, however, a disturbingly significant number of facts presented are gross misinterpretations.
The author does a nice job of explaining commonly used Wall Street terminology and concepts, for the novice. However, she fails in the infinitely more important task of consistently explaining the core concepts of investing (and not just stock speculating -- as so many of us all too often do).
Two (among the many) misleading points involve investment diversification and Buffett's used cigar-butt approach. She implies both Graham and Buffett whole-heartedly embrace diversification. Unless I have been reading the wrong Graham and Buffett, they certainly do not do so, unconditionally. The author further misrepresents Buffett when she actually leaves it that he finds the "cigar butt" approach, a wise way to buy businesses. He indeed called that method, "foolish" [Mr. Buffett: if that is no longer the case, please excuse my error.]
If you are searching for enlightenment, the way I was, you will be 1000 times better served to read "The Essays of Warren Buffett", arranged by Cunningham and, of course, Graham's "The Intelligent Investor".
Average customer rating:
- A real page turner
- Who Is Joel Stern? Fortune Has Smiled on Him.
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Against the Grain: How to Succeed in Business by Peddling Heresy
Joel M. Stern , and
Irwin Ross
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The EVA Challenge: Implementing Value Added Change in an Organization
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The Quest for Value
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EVA: The Real Key to Creating Wealth
ASIN: 0471216003 |
Book Description
The unique story of a business heretic and his concept of Economic Value Added (EVA)
In
Against the Grain, Joel Stern shares for the first time, not only the story of how EVA swept the corporate world, but the story behind the story-the intellectual underpinnings of EVA, how he and his colleagues at Stern Stewart & Co. promoted the concept, won its initial acceptance by major corporations, and later turned the concept into a revolution. He has for good reason been called a one-man catalyst for change. In an engaging memoir, he has given us not only an account of his business strategy, but also provided fascinating anecdotes and vignettes of encounters with leading businessmen on four continents.
Joel M. Stern (New York, NY) has been the Managing Partner of Stern Stewart & Co. since its founding in 1982 and was coauthor of The EVA Challenge (Wiley: 0-471-40555-8). A recognized authority on financial economics, corporate performance measurement, corporate valuation, and incentive compensation, he is a leading advocate of the concept of shareholder value.
Irwin Ross (New York, NY) was retained to write The EVA Challenge with Joel Stern and John Shiely. He is a former roving editor of Reader's Digest and over the years has written for Fortune and a variety of other magazines.
Download Description
Success does not come easily in the world of business, especially if you choose to challenge some of the most widely held beliefs in modern finance. Nobody knows this better than Joel Stern--a man who swam against the strong current of conventional financial dogma and ended up revolutionizing the way CEOs and money managers value and measure performance. By maintaining a steadfast belief in his concept of Economic Value Added (EVA) and convincing individuals, institutions, and companies of its validity, Stern has become a catalyst for change in the world of finance. He has also become the man who made EVA the most insightful measure of today's corporate performance. In Against the Grain: How to Succeed in Business by Peddling Heresy, Stern shares for the first time, not only the story of how EVA swept the corporate world, but the story behind the story--the intellectual underpinnings of EVA, how he and his colleagues at Stern Stewart & Co. promoted the concept, won its initial acceptance by major corporations, and later turned the concept into a revolution that has continued to grip the worlds of business and finance.
Customer Reviews:
A real page turner.......2007-07-25
I read the entire book in one sitting. Better written than most novels, it was a pleasure to lose some sleep over this great read. After reading it a friend mentioned that he was in Mr. Stern's class at Columbia? and just as he writes received a phone call from Mr. Stern on his travels upon receiving an A on his paper.
In addition his coverage of Judaism and South Africa are facinating.
Who Is Joel Stern? Fortune Has Smiled on Him........2004-02-07
If you know who Joel Stern is, you may want to read this book. If you do not, you will probably not enjoy the book.
If you know and love Mr. Stern, the book will add many amusing anecdotes to your story of tales about this peripatetic self promoter.
Mr. Stern was originally known for visiting CEOs and telling them that "earnings per share don't count." That was a novel message to CEOs who usually got their bonuses for meeting budget targets for earnings. Intrigued by the comment, Mr. Stern would usually go on to explain that the stock market was highly efficient and followed the lead of "steers" like Warren Buffett who knew how to assess the economic effectiveness of an organization's performance. The book contains a copy of an early op-ed piece he wrote to explain his ideas.
What Mr. Stern wanted people to do was to focus on making the cash flow of their organizations that they did not have to reinvest grow ("free cash flow"). Turned into English, he wanted companies to make more money with their investments and invest as little as possible. He now characterizes that concept as "heresy." That's strange since businesses have been employing discounted cash flow as a discipline to making new investments since around 1890.
Since then, Mr. Stern has worked with his colleagues at Stern Stewart (his financial consulting firm) to turn these concepts into elaborate measures of economic performance called EVA and MVA that adjust for the cost of capital (something that has been around since the Capital Asset Pricing Model was introduced many decades ago). Mr. Stern also thinks of this as "heresy."
Few others than CEOs would have heard of Mr. Stern if he didn't constantly teach, speak and write about his work. The book has some elements of Adventure Capitalist as he describes his nomadic life.
His main prominence occurred after 1993 when Fortune Magazine made him the feature of a cover story. Why did Fortune do that? The book doesn't tell, but I once asked a friend who is an editor there. Stern Stewart was a tiny firm at the time, and barely breaking even (as Mr. Stern acknowledges in this book). The ideas were ones that had been around in academia for decades. What was so special? The editor told me that Roberto Goizueta, then chairman and CEO of Coca-Cola, had written to suggest the idea. Since Fortune had never received a letter like that from a CEO, they felt that they had to write the article. The Wall Street Journal later reported that Mr. Goizueta typically spent more than half his day writing letters to analysts and publications to get more exposure for his company's stock. Since then, Mr. Stern's firm continues to be published annually in Fortune, and prominent Fortune editors appear at his marketing conferences.
In that story, you get the essence of the book. Mr. Stern is a genius at persuading high profile people to endorse him and his work and help promote his career. This began while he was at Chase Manhattan Bank. I first met him in 1975 after the lending officer to our Fortune 200 company suggested we hire Mr. Stern to come speak to us. At the end of the presentation after Mr. Stern left, his internal sponsor in our company noted that Chase Manhattan did not use his concepts.
Not surprisingly, Mr. Stern eventually left Chase to start his own firm in 1982. Since then, his contribution has been to take the two groups of executives in our society who read the least (CEOs and CFOs) and teach them about the financial theory that is taught in every business school in the world. Before you dismiss that contribution, remember Peter Drucker's advice: There is no single measure of company performance that is any good. You should add more and use them all. In that vein, Mr. Stern has helped. He now has many competitors who provide reasonably similar versions of the same measurements.
If you want to know more about these measures, read The Quest for Value by Bennett Stewart rather than this book.
The most controversial part of his work is a compensation method based on EVA. I was amused to find out from this book that Stern Stewart does not use this method for its own compensation, although EVA is one part of the compensation determination.
If you are interested in how to be a high-profile consultant in the world of finance, you will get a good sense of the type of networking among academia, finance and senior executives that is required. If you want to live that nomadic life, cut off from your family, then the world is yours.
Book Description
The Best Extended Exposition Of Dow's Theory.
Customer Reviews:
Classic elaboration of the Dow Theory.......2000-08-02
William Hamilton was the successor (both at the Wall Street Journal and in expounding the Dow Theory) to Charles Dow, and the one who clarified the Dow Theory as most people understand it today. To students of the Dow Theory, and of Wall Street and Investment history in general, this is a must-have volume. Also see works by Robert Rhea.
An unecessary defense of the stock market.......1999-09-19
The stock market barometer is a completely unecessary defense of what the stock market is. It provides an incredible amount of uninteresting and completely trivious information. It is definitely NOT a must read.
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New Methods for the Arbitrage Pricing Theory and the Present Value Model
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Manufacturer: World Scientific Publishing Company
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ASIN: 9810218397 |
Book Description
A psychiatrist, with a background in business, offers you insightful principles that will make you more aware of the dynamic forces that shape your relationship with money. The "Wealth Therapy" system offers you the tools to modify your thinking, feelings and behaviors to achieve your financial goals.
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- The Whole Brain Business Book
- The World Is Flat [Updated and Expanded]: A Brief History of the Twenty-first Century
- Trading Up: Why Consumers Want New Luxury Goods... And How Companies Create Them (Revised and Updated)
- Turning to One Another: Simple Conversations to Restore Hope to the Future
- Unconventional Success: A Fundamental Approach to Personal Investment
- Valuation: Measuring and Managing the Value of Companies, Fourth Edition
- Web-Based Training: Designing e-Learning Experiences (With CD-ROM)
- Weekend Knitting: 50 Unique Projects and Ideas
Books Index
Books Home
Recommended Books
- Fundamentals of Organizational Communication
- Calm My Anxious Heart: A Woman's Guide to Finding Contentment
- Value Added Risk Management in Financial Institutions: Leveraging Basel II & Risk Adjusted Perfo
- Weddle's Recruiter's Guide to Employment Web Sites 2001
- Accounting Control Best Practices
- Catherine, Called Birdy
- Beginner's Chinese with 2 Audio CDs
- Canadian cases in financial accounting
- Trans-Status Subjects: Gender in the Globalization of South and Southeast Asia
- A Walk on the Wild Side: A Novel
Common Stocks and Uncommon Profits and Other Writings
Security Analysis
The Essays of Warren Buffett : Lessons for Corporate America
The Interpretation of Financial Statements
Interest, Growth & Inflation
