With an emphasis on economic profit-as opposed to accounting earnings-valuation, Focus on Value challenges the conventional wisdom on portfolio construction and equity securities analysis. Moreover, it “debunks” the popular equity style (value, growth, or indexing) notions of equity portfolio management by focusing on economic profit valuation.
Book Details:
- Author: James L. Grant
- ISBN: 9780470305997
- Year Published: 2001
- Pages: 200
- BISAC: BUS027000, BUSINESS & ECONOMICS/Finance
About the Book and Topic:
With an emphasis on economic profit-as opposed to accounting earnings-valuation, Focus on Value challenges the conventional wisdom on portfolio construction and equity securities analysis. Moreover, it “debunks” the popular equity style (value, growth, or indexing) notions of equity portfolio management by focusing on economic profit valuation.
Trends come and go, but the shortest path to capital growth is through the fundamental tenets of value. Focus on Value: A Corporate and Investor Guide to Wealth Creation follows this principle by applying up-to-date research and recent discoveries in finance to time-tested techniques for estimating return based on: economic profit, invested capital, cost of capital, enterprise valuation, and much more. Filled with expert advice and unparalleled insights, this powerful resource provides managers and investors alike with a strategic look at how key economic profit factors determine company stock performance.
* Serves as a complete guide to wealth creation while providing a synthesized set of research tools to discover a solid company with an attractive stock. * Outlines methodology for determining sector and industry influences on company performance. * Shows how to estimate the return on invested capital. * Shows how to recognise the risk (to value) impact of cost of capital change. * “Now that investors have abandoned momentum and are migrating back to fundamental investing, the market has become a more rational place. This book is a manual for serious investors who believe that identifying growing corporate earning power is the foundation of value creation. Those following its precepts should minimize risk and be rewarded over the long term.” Byron R. Wien, Chief U.S. Investment Strategist, Morgan Stanley * “Economic profit is one of the most useful managerial tools as well as a key to understanding the valuation of companies. Focus on Value is an outstanding piece of work. It captures the full spectrum of the ‘Metric Wars’ without ever confusing the reader. The serious student of economic profit will be richly rewarded by reading this excellent book from cover to cover.” Mario A. Corti, Chairman and Chief Executive Officer, Swissair Group, Zurich
About the Author
JAMES L. GRANT, PhD, is with JLG Research and an Adjunct Professor of Finance at Baruch College, CUNY. JAMES A. ABATE, CPA, CFA, is Investment Director with Global Asset Management.