Investment Valuation: Tools and Techniques for Determining the Value of Any Asset 3rd Edition

As a businessman and a student of business, I consider this one of the most important business books that I own. I consult it regularly and use it in every consideration I have involving valuation. This is a complex and subtle topic. I know people wish it were a straightforward topic that you could simply apply inputs and crank the handle and receive a sure valuation that everyone could agree to. But real life isn’t like that. This is why every deal has a buyer and a seller. We each have different approaches, different needs, different desires, and different expectations about what tomorrow will bring.Professor Damodaran has gathered together a vast number of valuation techniques and gives us great background and context for applying them and when they will tend to provide good information and when they can mislead us. I think this is tremendously valuable. But it requires work on the part of the student or the business person trying to come up with a useful valuation for some asset.In reality, we should use multiple techniques when considering any asset and see how well they agree with each other and where there are divergent valuations. We should then consider what is causing those differences and see if that analysis yields some valuable insight.So, if you want to think deeply and seriously about valuation, this is a great resource. If you want a simple machine to crank out a number, this is not valuation for dummies.I recommend this book strongly.Reviewed by Craig Matteson, Saline, MI

I have great admiration and respect for Prof. Damodaran, and I don't know anyone who doesn't. I have attended some of his conferences and they are usually packed. Not only does he explain things with great clarity, but he delivers his conferences with gusto and humor.This is a fabulous reference text. The author covers practically every aspect of valuation: big firms, small ones, private cos., real estate, m&a, etc. What I really liked were his methods for including option theory and use of options formulae for calculating value when there is no cash-flow, such as oil or mining reserves, or some sort of contingent claim on an asset.The section on use of estimates for cost of equity and capital are highly detailed, and don't miss any of the many aspects that can affect the variables involved: country risk, default risk, etc.Although the book is readable, and very clear and organized in the layout of the methodology, it is heavy reading. I for one, read at most one or two chapters at a time, because of the high level of detail, and the many sub-themes within the broad chapters. Also, I have had to read quite a few chapters once or twice because the material is abundant and the many formulae are easy to forget. That is why i would consider it a reference text, as opposed to other books of Damodaran on this subject, which are much more synthetic. His most recent book: "Narratives and Numbers" complements this text very well.

Many of the numbers have been updated since the 2nd edition of this book was published some 10 years ago. That is, many charts and tables have data going through as late as 2011 (although some still use old data). To be fair, it is very hard to find really good examples of things, so I don't really blame him for not updating some of the examples. Most of the topics though are still pretty much the same as the 2nd edition (this is also to be expected), but, in some instances, the discussion is updated to cover recent events.Overall, this is still an excellent valuation book. Especially for someone that has not read the 2nd edition, this is an excellent resource. I would describe Damodaran's writing style as "honest," which means that he gives you both the good and the bad. He acknowledges that valuation is inherently a subjective process, which, in my opinion, can only be really done well with experience. I find this book as kind of a road map to good valuation fundamentals, as Damodaran shows you what alternatives you can do and what things to avoid.

Aswath Damodaran is the master when it comes to valuing companies.No one does a better job than he does.Small growing companies making losses, large behemoths lumbering to extinction, Mr Damodaran has a way to value them all.His blog is really good and the fact that he makes his spreadsheets available to download is literally priceless.Deals with all kinds of issues in valuation such as Net Operating Losses, Operating Leases, Research and Development Expenses, Stock Options, RSUs, and Cost of Capital Calculations.Invaluable.

Really well done! I've read this one and the valuation book authored by some folks from McKinsey. This book is excellent; however, it is much more academic. I really enjoy Damodaran's website and teachings, so I prefer this one a little more. That said, Valuation: Managing and Measuring the Value of companies is a great complement. Really comes down to preference.

Love this book, a definite must have for anyone interested in valuation. I have multiple degrees in finance and find myself referring to this book often, for many different situations. The author demystifies what is often perceived as a complicated subject area, which makes the material much more approachable. It isn't full of models to rinse and repeat, but instead contains useful explanations of theory to help with a variety of applications.

I've used this book as a supplement to the materials provided in my Financial Statements Analysis and Valuation class. From the perspective of a grad student (MBA) with a non-financial background, this is a very well organized and well-written book. There is a very clear and logical progression from basic to [more] advanced concepts; it makes material very easy to follow.

Helpful with some youtubing to clear a few concepts up