Company valuation. Storytelling and numbers. Aswath Damodaran [REVIEW]

Who is trying to trick us into stories about a company that will turn from a "garage" idea into a company worth billions of dollars? And who really has the potential for unlimited growth, but few have noticed it yet? Aswath Damodaran will not show you ready-made recipes in an easy way, because the valuation of the company is not the evaluation of a romantic comedy. But for the importance of the topic, a book "Company valuation. Storytelling and numbers " it is easy to read.

“Perhaps you belong to that group of people who fondly remember statistics classes during their studies and willingly use the knowledge gained then to play with numbers. Even if this is the case, you should be aware that you are a vast minority. The vast majority of us behave as if the statistics did not exist, and this makes us susceptible to manipulation " - this quote probably best describes the author's approach and his knowledge of people and numbers.

Aswath Damodaran is an expert in business valuation, but there are many people who can - for better or a little worse - do it. However, he has something more: he knows exactly where most cognitive errors come from and teaches how to avoid them in order to examine the condition and prospects of companies, based on a strong foundation, and not on ... what exactly?

First: a beautiful story

Why do some startups, which in fact did not go too far beyond the project phase, pay millions, while others fail and go bankrupt, even though they seem to have no worse idea at all?

Everything is based on ... a legend. But one that investors will believe. Often you don't have to support it with numbers, because sometimes no numbers at the initial level even exist. It's more about convincing an idea. And thanks to Aswath Damodaran, we will learn how to convince potential investors, but also how not to be fooled by being on the other side.

It is one thing to think logically, but to evaluate potential outcomes abstractly is another skill. However, it can be trained, you just need to know what to pay attention to.

Second, third, etc .: numbers

This part of the book is the most difficult part of the book, but it is undoubtedly also worth exploring. Because we will learn the history of the largest companies such as Uber, Twitter and Apple. And thanks to the specific examples cited, we will find out what conclusions can be drawn at each stage of the company's life by analyzing publicly available data. For some it will definitely open their eyes and show that you don't have to be an insider with access to strictly protected secrets to find investment certainty that will ensure a fair return on the stock market. You just need to know what numbers to pay attention to, what dependencies to pick out and what conclusions can be drawn from it.

Therefore, this book is worth reading not only if you want to sell or buy a company, but also to increase awareness of your equity investments.

About the Author

Aswath Damodaran is a professor of finance at New York University's Stern School of Business, where he teaches corporate finance and capital valuation. However, he is not a theorist detached from reality. He has even earned the nickname "Valuation Dean" on Wall Street because his views on the company's value are treated as sacred. Perfect valuation of enterprises - small and large - allows not only to sell or buy a company well, but also to earn a lot by investing in companies listed on the stock exchange. For years, it has had a recognized reputation on the market - both financial and academic, which does not always go hand in hand.

Company valuation - Where to buy

The book is available in Maklerska.pl bookstore at the price of 89 PLN.

We have a discount of all for our club members -5% to buy this book. Soon, a review of the book and a competition will appear in our website, in which you'll be able to win two copies.