Practical analysis for investment professionals

valuation


What If the US Government Were Valued Like a Company?

If the US government were a normal company, it would have had to declare bankruptcy long ago.

Book Review: Valuation

The authors set out the core principles of valuation and offer a guide to measuring a company's value.

Top Five Articles from April: Portfolio Concentration, Cryptocurrencies, Quantamental
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An analysis of portfolio concentration and a primer on cryptocurrencies are among the leading posts from Enterprising Investor last month.

Assessing Value in the Digital Economy

Analysts need new tools to evaluate new business models.

The Case for Further Stock Market Gains

The stock market often moves contrary to consensus forecasts, says Mark Armbruster, CFA. In the face of many stock market naysayers, there is a reasonable argument for further gains.

Non-GAAP Business Performance Measures: An Investor Perspective

Non-GAAP company performance measures are growing in prominence. Is this a good thing for investors who rely so strongly on accounting numbers for evaluating performance and valuing businesses? A recent CFA Institute webinar explored the issue.

Over-Rated: Do Fund Asset Classifications Tell the Whole Liquidity Story?

Investors and advisers need to broaden and deepen their levels of analysis to get a better handle on liquidity risks. They may be drawn to the apparent certainty of putting funds into a small number of boxes, buckets, or categories, but this may prove to be a false comfort.

Weekend Reads for Investors: Montier, Musk, and Mauboussin

Central bankers in the US have long fixated on the equilibrium real interest rate (ERIR) as their lodestar, an obsession that GMO’s James Montier, in The Idolatry of Interest Rates, bemoans as “a massive exercise in navel gazing.” According to Montier, the broad acceptance of the theoretically dubious ERIR — the real interest rate consistent with full employment of labor and capital resources—is not an example of the wisdom of crowds, but rather “groupthink extraordinaire.” Further, investors’ collective preoccupation with interest rates as an economic “cure-all” and their “deification of central bankers” are equally misguided, says Montier.

The Global Instability Premium

The ongoing shifts in US and global equity valuations are something worth watching until the world calms down, because global military tensions could easily get much worse than they currently are. If and when this occurs, global equities could become compellingly cheaper in short order, presenting a potential strategic opportunity, at least if you believe in the global instability premium.

Aswath Damodaran: Reliable Investment Valuations Balance Numbers and Narratives

When it comes to valuing stocks, the most reliable valuations come from imaginative number crunchers and disciplined storytellers, says Aswath Damodaran.



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