The NYU professor applies a common-sense, mathematical approach to challenge general “rules of thumb” of valuation while still using accepted methodologies, such as the discounted cash flow model.
Timing the sale of a security is arguably the most important aspect of any successful investment strategy, and the only true, unbiased indicator of where a security should be trading is information itself. That said, there is still value in using price targets.
Human bias, complexity, and uncertainty are amongst the biggest obstacles investors face when it comes to investment valuation, and Aswath Damodaran recently offered some practical guidance on responding to the uncertainties commonly faced when deriving the intrinsic value of a stock.
Steven J. Sherman discusses the role of the International Valuation Standards Council and how it differs from that of the accounting standard setters. Mr. Sherman also provides his thoughts on the large number of restatements by public companies in recent years due to valuation issues.
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