Global Value Investing
A multifaceted approach to value investing with stock valuation based on intrinsic value estimated from cash returns, appraised value of assets, and other facets of value.
The following books, articles,
and other resources are cited briefly elsewhere in the web site
or are considered useful for investors at different stages of the
craft and art of value investing.
NOTE: Article links often change. In case of a bad link, use the publication's search facility, which most have, and search for the headline.
|SOURCE||Book, Article or other Resource|
|Amazon.com ISBN 0393027384||Allais, Maurice, "Allais Paradox", 1990. In: The New Palgrave : Utility and Probability, pages 3-9, Eatwell, John, Murray Milgate and Peter Newman, eds. New York: W.W. Norton. A resolution of the St. Petersburg Paradox.|
|Amazon.com ISBN 0887309925||Anonymous and Timothy Harper, 1999, License to Steal : The Secret World of Wall Street Brokers and the Systematic Plundering of the American Investor. New York: HarperBusiness. A former senior vice president and stockbroker collaborates as a ghost-writer with a journalist for this personal account of the highly competitive world of Wall Street brokers, a world in which the agenda is always the brokers profit and never the needs of the client investor. Preface, pg. viii: "Brokers dont make money, however, if you buy and hold. Brokers make money by buying and selling stocks on your behalf. Yes, they try to get you to invest more and more with them, as much as you can. But what about when youre tapped? When your portfolio is maxed out, and theres no new money to invest? The only way for brokers to make money is to sell some of the stocks you own, and buy different stocks. If the client makes money, too, thats wonderful. But brokerage houses, big and small, exist primarily to make money for themselves, not for clients. Brokers like to present themselves as investment counselors. Some are. But first and foremost, they are salesmen."|
|Amazon.com ISBN 0075546027||Aristotle, 1954, The Rhetoric and the Poetics of Aristotle. New York: Modern Library.|
|Amazon.com ISBN 0812692454||Bacon, Francis, 1901, c1657, Novum Organum, editor, J. Devey. New York: P. F. Collier and Son. Idols of the mind.|
|Amazon.com hard back ISBN
soft cover ISBN 0684859386
|Belsky, Gary and Thomas Gilovich, 1999, Why Smart People Make Big Mistakes -- And How to Correct Them. New York: Simon & Schuster. An introduction to the new science of behavioral economics; How "mental accounting" can help you save or cost you money; How "loss aversion" and the "sunk cost fallacy" lead you to throw good money after bad; How the "status quo bias" and the "endowment effect" make financial choices difficult; "Money illusion," "bigness bias," and other ways that ignorance about math and probabilities can hurt you; Why "anchoring" and "confirmation bias" lead you to make important money decisions based on unimportant information; "Overconfidence" and the price of thinking that you know more than you do; "Information cascades" and the danger of relying too much on the financial moves of others; Principles to ponder and steps to take.|
|Amazon.com ISBN 0256267367||Bernstein, Leopold A. and John J. Wild, 1998, 6th edition, Financial Statement Analysis : Theory, Application, and Interpretation. Boston, MA: Irwin/McGraw-Hill.|
|Amazon.com ISBN 0471295639||Bernstein, Peter L., 1996, Against the Gods : The Remarkable Story of Risk. New York: John Wiley & Sons. Accessible account of the history of the measurement of risk in contrast to uncertainty and in particular investment risk. Silent on the important paradox-resolving Allais Paradox in discussion of the St. Petersburg Paradox, and silent on the more appropriate Stable Law distribution in discussion of normal or Gaussian probability distributions of changes in stock market prices. Addresses objective quantification and subjective belief.|
|Amazon.com ISBN 0486275426||Bierce, Ambrose, 1999, c1911, The Devils Dictionary. New York: Oxford University Press. The book title is a misnomer. If devils speak illusions and angels speak truth, then this is The Angel's Lexicon. Addressed by the author to "enlightened souls who prefer dry wines to sweet, sense to sentiment, wit to humor and clear English to slang." See entries for delusion, education, finance, folly, and fool.|
|book search or library||Blalock, Hubert M., Jr., 1979, Social Statistics, revised 2nd edition. New York: McGraw -Hill. An introduction to inductive statistics. The meaning of "proof" varies according to context. In pure mathematics, proof of a conjecture is established by the method of logical deduction. In physics and biology, proof of an hypothesis is established tentatively by the method of controlled experiment. In the social sciences such as economics, proof of an hypothesis is established tentatively by the method of logical induction. Inductive statistics applied to sociology is sociometrics, applied to psychology is psychometrics, and applied to economics is econometrics. See the listings for Peter Kennedy and John Y. Campbell..|
|Amazon.com ISBN 0256146381||Bodie, Zvi, Alex Kane and Alan J. Marcus, 1993, Investments, 2nd edition. Homewood, IL: Irwin. Part V Security Analysis, Chapter 17 Equity Valuation Models. Shows equivalence of the dividend discount, capitalized earnings, and free cash flow approaches. To see the Contents, go to academic textbook models.|
|Amazon.com ISBN 0812210026||Bohm, David, 1957, Causality and Chance in Modern Physics. Philadelphia: University of Pennsylvania Press. I. Causality and Chance in Natural Law, II. Causality and Chance in Classical Physics : The Philosophy of Mechanism, III. The Quantum Theory, IV. Alternative Interpretations of the Quantum Theory, V. More General Concept of Natural Law.|
|Amazon.com ISBN 007007190X||Brandes, Charles H., 1998, 2nd edition,Value Investing Today. New York: McGraw-Hill. Follows the common meaning of value investing without calculating intrinsic economic value from the expected dividends or cash flows.|
|Public Library ISBN 1556238975||Brandes, Charles H. and Glenn R. Carlson, 1995, International Value Investing : Making the Right Choice at the Right Price. Chicago: Irwin Professional Publishing. Follows the simple meaning of value investing without calculating intrinsic economic value from the expected dividends or cash flows.|
|Amazon.com||Brill, Hal, Jack Brill, and Cliff Feigenbaum, 1999, Investing with Your Values : Making Money and Making a Difference. Bloomberg Press. Guides you through the process of creating a profitable, values-based portfolio. It blazes a new trail, showing how we can bring our personal finances -- and the global economic system -- into alignment with our highest values.|
|Amazon.com ISBN 0691043019||Campbell, John Y., Andrew W. Lo, Archie Craig MacKinlay, John W. Campbell and Adnrew Y. Lo, 1997, The Econometrics of Financial Markets. Princeton, NJ: Princeton University Press.|
|UMI Number 9624265||Coleman, Robert D., 1996, Capital Market Efficiency of Firms Financing Research and Development. Ann Arbor, MI: UMI Dissertation Services.UMI Dissertation Number 9624265. The major findings of this original scholarly scientific research are presented in working papers for academic peer-reviewed journals. They include asset pricing circularity of size and related factors, the R&D effect, and the proprietary R&D effect. See abstracts, download, and author.|
|SVM Speech||Colin, McLean, October 1997, Cash Flow The Institutional Investors' Perspective, speech at Cash and Corporate Value: A Panel Discussion, Bank of England Museum. Scottish Value Management Limited, Edinburgh. "In summary, I believe that cash flow has become more talked about by investing institutions than genuinely understood. Companies need to explain that cash flow does not necessarily equal cash. They need to communicate the working capital characteristics of growth and avoid burying essential cash flow data in footnotes to the accounts. I believe that these changes could produce improvements in share ratings and share price stability, with the potential to reduce companys cost of capital."|
|SVM Speech||Colin, McLean, June 1997, Understanding Investment Risk, speech at PIMS Conference. Scottish Value Management Limited, Edinburgh. "In conclusion, risk is now big business, and we should not be surprised that an industry is growing up round about it to meet this need. However, if we wish to find out more about true risk, rather than just subscribing to a superficial rating that allows a compliance box to be ticked, we must recognise that much of the work to date is neither scientific nor useful. If you want genuinely to do your best to protect your clients, and for that matter your business, you should reject the specious nonsense that is implicit in all but three of the statements I opened with. Look more closely at investment processes."|
|SVM Speech||Colin, McLean, June 1997, Value Investing, speech at PIMS Conference. Scottish Value Management Limited, Edinburgh. "To sum up, the investment approach I have described has enjoyed outstanding long term success, but is not easy to apply. Over the short term, it will frequently lose to momentum investors, particularly in strong markets. Yet, while human nature should ensure that the stockmarket always offers opportunities for value investors, the unique demands of the discipline make it unlikely that it will ever be universally adopted. Thus, I see all the ingredients for value investing to continue its success in future."|
|Amazon.com ISBN 0471086274||Copeland, Tom,
Tim Koller, and Jack Murrin, 1st edition 1990,
2nd edition 1994, paperback 1995,Valuation :
Measuring and Managing the Value of Companies.
New York: Wiley. The method of valuation used by McKinsey
& Company. One 3˝ inch high-density floppy disk
included in 1994 edition. See
Table of Contents for Third Edition
See the book listing for L. Peter Jennergren.
|Amazon.com ISBN 0471133094||de la Vega, Joseph, 1688, Confusion de Confusiones. Boston: Baker Library, Harvard Graduate School of Business Administration. See the listing for Martin S. Fridson|
|publisher||Daly, Herman E. and Kenneth N. Townsend, eds., 1993, Valuing the Earth: Economics, Ecology, Ethics. Cambridge: MIT Press (800)356-0343. ISBN 0-262-54068-1 (pbk.). page 267, Sustainable Growth: An Impossibility Theorem.|
|Amazon.com ISBN 0471133930||Damodaran, Aswath, 1996, Investment Valuation : Tools and Techniques for Determining the Value of Any Asset. New York: John Wiley & Sons. For downloadable spreadsheet models, go to models.|
|Amazon.com ISBN 0471304654||Damodaran, Aswath,
1994, Damodaran on Valuation : Security
Analysis for Investment and Corporate Finance.
New York: John Wiley & Sons. Discusses discounted
cash-flow valuation models, relative valuation models,
contingent-claim valuation models, and a framework for
choosing the right model for any occasion, based upon the
characteristics of the asset being valued. Includes
optional disk that contains 15 customizable spreadsheets
formatted for use with Lotus 1-2-3 Version 2.3 or higher.
NOTE: These models include the beta factor and thus are pricing models rather than valuation models. Damodaran introduces the beta pricing coefficient as a measure of investment risk to determine the equity risk premium for the cost of equity capital used as the discount rate. The CAPM beta presumes informationally -efficient markets and homogeneous expectations among all market participants. This is a convenient academic solution to the unavoidable requirement of informed judgment that cannot be reduced to quantifiable methods for use by any market participant of any intelligence, knowledge, and judgmental ability. For a summary of the Contents, see the practical models of equity pricing.
|Amazon.com ISBN 0471120154||Damodaran on
Valuation, 1994 (Software).
NOTE: These models include beta factor and thus are pricing models rather than valuation models. Damodaran introduces the beta pricing coefficient as a measure of investment risk to determine the equity risk premium for the cost of equity capital used as the discount rate.
|Amazon.com ISBN 0471108979||Study Guide
for Damodaran on Valuation, 1994.
NOTE: These models include the beta factor and thus are pricing models rather than valuation models. Damodaran introduces the beta pricing coefficient as a measure of investment risk to determine the equity risk premium for the cost of equity capital used as the discount rate.
|Amazon.com ISBN 0393317552||Diamond, Jared, 1997, Guns, Germs, and Steel : The Fates of Human Societies. New York: W.W. Norton. Expands upon the theme of The Third Chimpanzee : The Evolution and Future of the Human Animal -- how the human species changed, within a short time, from just another species of big mammal to a world conqueror; and how we acquired the capacity to reverse all that progress overnight. Explains how the world came to be facing a man-made ecological crisis. Complements Daniel Quinn's Ishmael which explains why we came to be facing this crisis.|
|Amazon.com ISBN 1886654026||Donohue, Robert J., 1997, 5th Edition, An Introduction to Cashflow Analysis. Regent School Press. This text introduces to non-finance professionals the basic financial concepts and techniques required to evaluate a wide variety of cashflow situations. Explains Present and Future Values, Discounted Cash Flow, Internal Rate of Return, Modified IRRs, Net Present Value, Mortgage and Lease analysis, Stock valuation based on cashflows, Bond valuation, Bond Duration, and Real Estate investments. The text illustrates these concepts using the HP-12C calculator.|
|Amazon.com ISBN 0201479486||Dörner, Dietrich, 1997 (English), The Logic of Failure : Recognizing and Avoiding Error in Complex Situations. New York: Perseus Books. Chapter 1 'Time Sequences' reveals some of the fallacies of simplistic reductionist price charting to interpret market systems characterized by complexity, uncertainty, dynamic time-dependence, and intransparance. Recommends the use of simulation models to think through plans and decisions and improve effectiveness in forecasting and predicting critical variables.|
|library||Durand, David, 1957, "Growth Stocks and the Petersburg Paradox", Journal of Finance, (Vol. XII, No. 3, September 1957:348-363). See the listing for Maurice Allais.|
|Bourbon Street||Ellington, Duke, composer, In a Sentimental Mood (In Real Time), Johnny V's Music & Sound Extravaganza Midi Links, "Just Jazz Midi Files" downloaded on January 16, 1996, DeJo Vue Productions, Inc.|
|Amazon.com ISBN 0393957497||Erasmus, Desiderius, 1989, 1536, The Praise of Folly. Translated by Robert M. Adams. New York, NY: Norton. A classical satire that combines humor with attacks on human weaknesses and excesses including those of academicians and fortune-hunters.|
|Amazon.com ISBN 0130519138||Ferris, Kenneth R., Kirk L. Tennant, and Scott I. Jerris, 1992, How to Understand Financial Statements : A Nontechnical Guide for Financial Analysts, Managers, and Executives (Computer Disk Included). Englewood Cliffs, NJ: Prentice-Hall. Sections: (1) An Overview of the Institutional Environment, (2) The Income Statement, (3) The Balance Sheet, (4) The Statement of Cash Flows, and (5) The Quality of Reported Earnings and Assets.|
|Amazon.com ISBN 096657690X||Finkelstein, Ken H., 1998, The Tax Haven Guide Book, Big Island Media Corporation. Overview to moving money offshore for privacy, protection and tax advantage. The details are time sensitive and change as new tax laws and tax treaties are negotiated in and between nations.|
|Amazon.com ISBN 0070210403||Finnerty, John D., 1986, out-of-print, Corporate Financial Analysis : A Comprehensive Guide to Real-World Approaches for Financial Managers. New York: McGraw-Hill. (1) Basic Techniques of Financial Analysis, (2) Analyzing Capital Investment Projects and Measuring the Required Rate of Return, (3) The Capital Structure Decision, (4) The Dividend Decision, (5)Working Capital Management and Short-Term Financing, (6) Long-Term Financing, (7) Liabilities Management, (8) Financial Planning and Strategy, (9) Sources of Financial Information.|
|Amazon.com ISBN 0879918640||Fisher, Irving, 1930, The Theory of Interest : As Determined by Impatience to Spend Income and Opportunity to Invest It. New York: The Macmillan Company. Revision of The Rate of Interest, 1907.|
|Amazon.com ISBN 0471133094||Fridson, Martin S., editor, 1996, Extraordinary Popular Delusions and the Madness of Crowds & Confusion de Confusiones. New York: John Wiley & Sons.|
|Amazon.com ISBN 0471155519||Fridson, Martin S., 1993, Investment Illusions : A Savvy Wall Street Pro Explodes Popular Misconceptions About the Markets. New York: John Wiley & Sons. His healthy skepticism seems to fail only when it comes to the integrity of academic journal articles.|
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