Business-valuation

Were you disappointed with Rich Dad's Real Estate Riches? I was. But, here's what I was really looking for. This book fills in the details where Real Estate Riches glosses over with boring generalities. While you don't need to be a real number cruncher to understand the book's advice(the discussions read easily ), Eldred does go through the calculations to show that when you take account of all types of risks and returns, you can do much better with real estate--if you follow the principles of value investing. I also learned that to best choose your properties, you must forget the old cliche, " Buy below market", Instead, you need to focus on properties (locations) that stand the best chance of appreciating.Makes sense to me!

As an investor with 11 years left to retirement(I hope), I greatly appreciated the detailed and thoughtful way this author compared and and contrasted various investments. I like to think of myself as a smart investor who is extremely concerned about asset allocation and this book truly fills that need. Also, the book doesn't "trash" stocks. It shows that based on yield and risk, stocks will subperform well-selected income properties. It does not allege that stocks always rank poorly, nor does it claim real estate is always a great investment. Instead, it gave me the knowledge to make more profitable investments--regardless of whether I buy stocks or property. The book is extraordinarily well researched and referenced (hundreds of notes at the end of the book) for serious investors. Personally, I enjoyed reading these notes as much as the book, itself. Lots of insight into how we got to where we are and where we're going. If you decide to only browse through the real estate-stock analysis, the latter 6 or 7 chapters that focus primarily on property will give you more than your money's worth.

First of all, I have been in the investment business for years. I recommend stocks, mutual funds, bonds, treasuries, commodities, REIT's, etc. Many of the reviewers here don't have a clue what they are talking about. The stock market is not the only way to invest. In fact, given current market valuations and investor sentiment (historically high sentiment now-2003) future stock market returns will come nowhere close to what we've seen over the past 2 decades. Personally, I think that at least to 2010 we will be lucky to get market returns of 5% annually - very lucky!! The reason making money in real estate is so attractive now is that many rentals offer positive cash flow immediately (unless you live in most areas of CA, Boston, D.C, etc). Also, the KEY to making money in real estate is LEVERAGE. Example: You buy a $100k property that appreciates at 3% year for the next 5 years. You put down 20% ($20k). Your 30 yr fixed mortgage payments are $475 month ($80k at 6%). You rent the unit for $800 month ($9600). Expenses are $100 month. Taxes are $75 month. So, in Year 5 your property is now worth $116k. Your mortgage balance is $75k. You have equity of ($116-$75 = $41k). All this on a $20k cash investment. In the meantime, you've NETTED $150 month X 60 months = $9000 total. You've really turned $20,000 into $50,000 in 5 years (20.1% CAGR). This doesn't include annual rent increases OR tax deductions (both of which would equal thousands of dollars). The key is you get leveraged appreciation WITHOUT MARGIN CALLS. Unless you are Warren Buffett, forget about making money in the stock market now or EVER. Real estate is not for everyone though. If you are serious about real estate this book is a great read.

After reading many books on Warren Buffett and, more broadly, on the subject of value investing, I still found myself a bit lacking in how to identify the true worth of a business. The reason for this was that many of the books assumed more than, in fact, I really knew.

(This is not to say that such books were of no value to me or won't be for you. It is simply stating the obvious: without a solid grounding in how to evaluate, and quantify, what any of the businesses I looked at were worth, I was strongly limited in my efforts of making good investment decisions. I was able to tell, for instance, that a company was competently run but not whether it would earn enough in the future to justify its current price. And that, as every rational investor will tell you, is key to achieving investment success.)

_Value Investing for Dummies_ assumed virtually nothing. Sure enough this meant much in the book was a review of what I had already learned from others (and might be for you too) but to my mind there's nothing wrong with relearning what is already known. (Better to do so with a book at least than with one's own money.) In assuming little-to-nothing of the reader, the authors give the reader all the tools he or she needs to invest profitably in the future.

Crucial to the dummy reader and, in this case, that means me, the book shows how to understand the _language_ of business: accounting. Since this is where the book shines, I'll pause here to allow the authors themselves a chance to explain what it is they're setting out to do. In Part 2 of the book titled "Fundamentals for Fundamentalists" the authors state their intentions as follows:

"We open the value investor toolbox by first engaging in a short exploration of investing mathematics . . . Next up is a discussion of information and information sources key to the value investor. Then, we dig in further with a tour of the financial statement landscape, including balance sheets, income statements, and cash flow statements. Ratios and ratio analysis are explored as a way to make more sense of these numbers. Finally, we help you to find and interpret non-numeric influences in the value equation."

In the next section, Part 3, the authors again state their intentions:

"We help you to assess or _appraise_ the value of a company and relate that value to the stock price. We examine some of the proven methods of business value asessment, including intrinsic value, book value, discounted cash flow, and the strategic profit formula. Then we sprinkle in a dash of intangibles (investors shouldn't live by numbers alone) and discuss buy and sell decisions. To bring these tools and techniques together into a system, we use none other than the full example of the master, Warren Buffett. Finally, to provide practice and reinforcement we present case studies of value, and for further reinforcement we resort to the age-old technique of showing opposites: examples of _un_value."

As a reader of the book, and now a reviewer, I have the duty to tell you that the authors have done exactly what they intended to do--and they have done it well. The style is such that even somewhat boring topics seem lively and the technique, as it is explained above and practiced throughout, simply can not be improved upon. The crystal-clear definitions of accounting terms and financial ratios, the detailed explanations showing what they mean and why they are important, the real-life example of Warren Buffett, and the case studies taking you all the way through the process step-by-step make this book truly the best place to start for anyone interested in investing.

A good introduction to shareholder value -- despite its age. If Marakon Associates ever decides to update and revise the edition, I have a few suggestions: (1) add more graphical representations of the concepts, including strategic models; (2) add more case studies to the appropriate sections, and (3) provide a clearer description of the shareholder value calculations (particularly the cost of capital). If these critisisms don't deter you, you'll find "The Value Imperative" to be a helpful guide. As an independent consultant specializing in shareholder value, I would also recommend Young and O'Byrne's "EVA and Value-Based Management" as well as Marin and Petty's "Value Based Management."

Good ideas for day-to-day management to manage value as well as big ideas for strategy. There were interesting section on how budgeting strangles strategic planning and what to do with about it. I think this is a great book for executives managing large companies in mature industries. It shows how to focus on value creation at every level of the organization. It gave advice on how to take action and achieve results.

I consider this book the bible of all books on value creation and how to achieve it. It is eminently practical and should be on every financial practitioner's bookshelf. I also recommend reading it annually. It is a wonderful compliment to the other value-based managment books in the market which tend to go long on theory. They're also excellent; but this combines value-based managment and strategy superbly.

I have spent hours pouring over business texts as part of my studies and it is only recently that it occured to me that a pre-condition for business writing is verbosity. Where one word will do it seems that the norm is to write 10! I wouldn't mind if they were wise, witty or otherwise held my interest but for the most part seem to fit the catageory of "padding".

Value Drivers suited me very well because it seeme to highlight the pertinent issues quickly and accurately without going into unnecessary detail. The models introduced have been relevant to a number of the modules on my course including marketing and finance as well as strategy. Since I am interested in marketing then the case study examples given have also been relevant.

In a nutshell a fine example of brevity, clarity and precision. One small niggle. More illustrations, please. Pictures paint etc. My course load would reduce if more books were written in this way!

Whether looking in from the outside or evaluating an internal business unit, it is easy to forget that a business is a holistic undertaking made of many parts. From manufacturing to marketing, these parts impact each other and are neglected at the manager's peril. Mr. Scott's presentation takes the full view into account and provides a vauable framework for evaluating the elements and the role they play.

As a general manager, I found Mr. Scott's work excellent. In a clear and comprehensive manner, he gets at the essence of value creation. His work is a good read for any manager looking to step back from the daily urgency of his operations and regain a perspective on the big picture issues that drive strategy.

Our organization -- all the 12 top guys -- got copies and spent a couple days a month for 5 months going through all the steps in this book. Wow -- we now all agree on what we're good at, how to consistently increase cash flow, and -- most importantly -- what to NOT spend time on. Most of our time is now spent cheerleading and stressing our beliefs, letting the guys and gals on the line make decisions which agree with these.

Definitely not just for the public, professional manager. This stuff really works for the small company too!

This book, and another by Ferris, was a required textbook for a class taught by the author (Ferris) at the school where he teaches. It is an indication of the respect that the other Finance and Accounting profs have for Prof Ferris that his books are used by no other profs there- in fact, many riducle the simple errors and theoretical mistakes that are present in this book. As a guide to valuation of public firms, this book is useful only in outlining a simplisitc cookie-cutter format that lacks any depth or analysis.

A very thoughtful reference work. The country-by-country profiles in the second part of this work are particularly useful. Overall well balanced, but notable for a few of its omissions, including The Patent & License Exchange (pl-x) itself!

The authors present some potentially useful research findings from a multi-year study undertaken by A.T. Kearney, the consulting firm. Unfortunately, they present too little of the details from the research project for the book to be as useful as it could be. The book becomes quite repetitive after several chapters and seems to have little new to say after a point. It is worth reading for the limited number of researching findings presented--just don't expect too much.

The Value Growers addresses many important issues executives face when planning for strategic growth. The authors do a good job of translating a international study into a readible book that provides excellent case studies from around the world.

The authors rely on an interesting nautical metaphor throughtout the book as they demonstrate how to "navigate" your company to high growth and high profits. While there were parts of the book that would have benefitted from more hard data extracted from the A.T. Kearney study, I found the book well worth the read and would recommend it to any current or aspiring "C-level" executive.