Summary of Aswath Damodaran's The Little Book of Valuation

By IRB Media

Get the Summary of Aswath Damodaran's The Little Book of Valuation in 20 minutes. Please note: This is a summary & not the original book. Original book introduction: Valuation is at the heart of any investment decision, whether that decision is to buy, sell, or hold. In The Little Book of Valuation, expert Aswath Damodaran explains the techniques in language that any investors can understand, so you can make better investment decisions when reviewing stock research reports and engaging in independent efforts to value and pick stocks.

Page by page, Damodaran distills the fundamentals of valuation, without glossing over or ignoring key concepts, and develops models that you can easily understand and use. Along the way, he covers various valuation approaches from intrinsic or discounted cash flow valuation and multiples or relative valuation to some elements of real option valuation.

• Language: English
• Publisher: IRB Media
• Release date: Dec 3, 2021
• ISBN: 9781669340584

IRB Media

With IRB books, you can get the key takeaways and analysis of a book in 15 minutes. We read every chapter, identify the key takeaways and analyze them for your convenience.

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Insights on Aswath Damodaran's The Little Book of Valuation

Contents

Insights from Chapter 1

Insights from Chapter 2

Insights from Chapter 3

Insights from Chapter 4

Insights from Chapter 5

Insights from Chapter 6

Insights from Chapter 7

Insights from Chapter 8

Insights from Chapter 9

Insights from Chapter 10

Insights from Chapter 11

Insights from Chapter 1

#1

Investors must try to value whatever they are buying before actually buying it, since paying more than it's worth is not permitted.

#2

The two valuation approaches are intrinsic and relative. In intrinsic valuation, we start with a simple premise: the intrinsic value of an asset is determined by the cash flows you expect it to generate over its lifetime and how uncertain you are about these cash flows. In relative valuation, we compare the asset to similar assets.

#3

Valuing a company involves assessing its worth. This requires an understanding of valuation fundamentals.

#4

The biases of the people performing the valuation should be taken into account when using their input. These biases could either work to your advantage or disadvantage, so be aware of them.

#5

The path you envision for a firm may not match up to the actual numbers, and the uncertainty you face in forecasting future earnings and cash flows can be different from