Stock-valuation

This book was published in June 2002. The Nasdaq index peaked in March 2000, and that is taken as the high water market of the high technology boom, a grouping which encompasses the dot coms, startup telecoms and the biotechs. So you might read this book as a retrospective on those times. Especially if you had fruitlessly invested some of your own funds in any of those startups.

Kettell's ideas for new metrics by which to evaluate these and future startups are interesting. Though some (many?) might consider these to be discredited by the multiyear slump after March 2000, and the resultant bankruptcies of numerous startups. It was then said that the traditional metrics of performance were still best, and time-tested.

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.

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 Copeland's and DamodaranÂ's books. Now, I understand it!!!

This is an exact reprint of his earlier book, do not waste your time or money. (...). There are many other books more worthwile of your time and money than this one.

This book appeared first in 1996 under the title "Witch Doctor of Wall Street" and it turns out to be exactly the same book with an "epilogue" added yet neither the book nor the advertising suggest this. The book forms the basis of Professor Parks' course in Capital Markets and Investment at Pace University. The tone of the book is critical and curmudgeonly yet some interesting points are made and it makes a useful accompaniment to the standard finance text book (Sharpe, Brealy & Meyers, etc.). The first edition was full of misprints and errors which, I hope, have been corrected in this second edition.

As a student of Dr. Parks at Pace University, Lubin School of Business, this book has changed the way I view and analyze various financial topics. This books covers many current,complex,controversial and critical issues and examines the reasons and theories behind them as well as disproving many commonly held beliefs. Topics include: 1.The Gold Standard. 2. Passing an Amendment to have a balanced budget every year. (Why we don't need it!) 3. The fallacy with regards to the "Double Tax" on Corporate Shareholders and the "Double Tax Shield". 4. Reasons behind our nine post WWII recessions. 5. Linking Monetary policy with Fiscal Policy and its importance. 6.Discussing Supply side economics. 7. Explaining the MM Dividend Irrelevancy Theorm,(Why investing in a company that pays dividends or re-invests earnings will eventually result in equal gains.) 8.In-depth examination of our (US) economic history and the reasons why we've had booms and busts. etc.. This book covers a wide array of financial topics and explains difficult concepts in an easy to understand manner. Dr. Parks also examines the "herd" mentality on Wall Street and exposes the "parrots" and "hucksters" that work on the street. Essential reading for students of finance and anybody interested in broadening their financial knowledge.

Barlett basically takes you by the hand with MBS in such a way that you feel everything is explained thoroughly. I never felt that I needed to go to a second book to doubled-check my understanding of the material...such as with the Fabozzi Handbook. Too bad it's now out of print. Barlett should come out from hiding and update this great work with a new edition!

The most comprehensive treatment to Mortgages and Mortgage Backed Securities ever. Slightly dated.

I was first introduced to Fisher's concept of Super Stocks about 10 years ago. The idea behind the concept is buying stocks with a low Price-to-Sales Ratio (PSR), typically 1.0 or less. Simply having a low PSR is not sufficient to be a Super Stock. The valuation tool is combined with fundamental analysis (e.g. growth, margin analysis, balance sheet analysis, etc.) of companies to identify stocks with favorable characteristics that will make them Super Stocks. Fisher also introduces a complementery tool Price-to-Research Ratio (PRR) which is a measure of the company's reinvestment rate into growth.

Fisher spends a lot of time discussing how to make money off the "Glitch". Basically, he believes that many Super Stocks are stocks that have been hit by a "Glitch". A "Glitch" is a temporary setback experienced by a company that makes the out of favor (e.g. product life cycle delay, revenue short-fall, etc.) This attitude is indicative of his value-orientation in investing. In other words, his fundamental analysis may find a great stock, but he will wait for a pull-back from a "Glitch" to a more appropriate PSR before investing.

Overall, the concept of PSR is not so different from other valuation measures for "low-priced" stocks such as Price-to-Earnings or Price-to-Book. However, it doesn't hurt to have another tool in the kit.

On a more interesting side-note, Wall Street analysts have definitely not read this book. It is amusing to note that analysts in the hey-day of the Internet boom touted stocks with PSRs in excess of 10x. A careful fundamental analysis would have resulted in concluding that the growth, margins, and balance sheets of these companies did not justify such high valuations. Nothing in the business models indicated superior performance on any dimension. Even if a business model was found to be superior, prudence would have dictated waiting for a "Glitch".

This is a good intro book to this type of investment. It is similar to his father's Common Stocks Uncommon Profits. If you want to do seriously what he is describing then find more detailed books. He righly emphasises the business not the numbers, as they change each quarter and its the mangement within a 'fundamentals context' who will make them change. He currently runs Fisher Investments.

If you've read a few of Fisher's regular columns in Forbes, you know that he 1) is primarily a value-oriented investor, 2) applies numerous, diverse tools in formulating his opinions, and 3) is quite self-confident. I think most people would objectively agree that a combination of all three of these qualities is key to being a successful long-term investor. Super Stocks, which I read a decade ago and still refer to today, effectively captures and displays Fisher's approach. Fisher does an admirable job of describing his investment philosophy, then providing a detailed walk-through of how he implements it - that type of focus is lacking in so many other investment books. Beyond that, Super Stocks introduced me to several investment resources that I was not aware of and Fisher even closes the loop by providing advice on selling out of winners. Two primary concepts that have stuck with me over the years and still weigh heavily on my thinking today are the idea of what margins a company with a low PSR SHOULD produce on its sales and the opportunities presented by product/earnings glitches. In both cases, it allows me to look past a company's current difficulties and determine what the magnitude and probability of upside is going forward. Though my core approach is as a buy and hold, small cap growth investor, I can attest to the numerous profitable stocks I have uncovered thanks to the tools this book gave me. So, don't let any preconceived notions of the author get in the way of your enhancement of your investing skills. Buy the book, learn from it, and I honestly believe you'll pay yourself back many times over.

Everything you need to know about how to value a stock is inside this book - somewhere. Finding it however, can be a problem, as it sometimes seems that the editors used the random dart theory of selection in putting together the chapters. For example, in order to understand the concepts presented in Chapter two, you need information that is contained in Chapters three and five. Once you figure out how to navigate it, though, this book is a valuable resource and a powerful educational tool for investors from neophyte to intermediate. It's encyclopedic in its scope, and the pages in the included glossary are sure to become dog-eared from use. We [...] recommend this book to investors of all levels. Beginners will learn critical concepts and terms, while more experienced investors will come to rely on this book as a trusted reference companion.

This book is the best book on the stock market since a random walk down Wall Street. Its very basic, and has some good humor to it. The book is very detailed on many areas. It espically has helped me when I decided whether or not to investe in companies such as Oakley, Coca-Cola, Microsoft, and McDonald's. The Streetsmart Guide to Valuing a Stock helps me with just this. I now know if a stock is extremely over-rated or would be a good buy. I would like to esp. express my congrats to the 3 Penn State professors who wrote this book!!!

This book offers an economically sound approach to stock valuation. The associated free website is also very useful.