The Theory of Investment Value
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- Type：Epub+TxT+PDF+Mobi
- Create Date：2022-10-09 05:53:00
- Update Date：2025-09-06
- Status：finish
- Author：John Burr Williams
- ISBN：1607966654
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Summary
Why the book is interesting today is that it still is important and the most authoritative work on how to value financial assets。 "Williams combined original theoretical concepts with enlightening and entertaining commentary based on his own experiences in the rough-and-tumble world of investment。" Williams' discovery was to project an estimate that offers intrinsic value and it is called the 'Dividend Discount Model' which is still used today by professional investors on the institutional side of markets。
Reviews
Jon Højlund
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A must read if you're interested in the historical origins of value investment。 Also I believe just reading in depths analysis of markets in different time periods may make you a better investor。 A must read if you're interested in the historical origins of value investment。 Also I believe just reading in depths analysis of markets in different time periods may make you a better investor。 。。。more
Joey
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This review has been hidden because it contains spoilers。 To view it， click here。 Chapter XV: A Chapter for Skeptics（1） Are formulas too intricate？ - By making all heretofore implicit assumptions explicit （e。g。 growth， leverage， etc）， one is better able to assess the absolute and importantly relative merits of investments; （2） Are LT forecasts too uncertain？- Good forecasting is not impossible and can be useful- Market prices can be used to deduce implied expectations of the duration of growth and margins and whether these valuations are plausible（3） Is the theory too impract Chapter XV: A Chapter for Skeptics（1） Are formulas too intricate？ - By making all heretofore implicit assumptions explicit （e。g。 growth， leverage， etc）， one is better able to assess the absolute and importantly relative merits of investments; （2） Are LT forecasts too uncertain？- Good forecasting is not impossible and can be useful- Market prices can be used to deduce implied expectations of the duration of growth and margins and whether these valuations are plausible（3） Is the theory too impractical？- Discounted cash analysis forms the basis on which fully rational investors （i。e。 entire business owners） would behave and prices should converge on those values in the LT（4） Is the theory corroborated by experience？- there is no reason to expect the market to ever converge on the right price; if it gets it wrong today of course it may get it wrong tomorrow 。。。more
MADHUKAR DAYAL
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A great book when written in 1938， but outdated now。 Perhaps someone may consider writing a major update。
Matt Kowalczyk
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Timeless classic to the art of investment analysis as the founder of the discounted cash flow model。 Formulas are dated and can be discarded with fundamental understanding of TVM and financial modeling in Excel or other programming languages used as a modern substitute。 Principles and theory are still as relevant today as in 1938 when this book was published。 Users of this theory would not have been caught severly in either the 2001 bust or 2008 crash。 Case studies are thought provoking and appl Timeless classic to the art of investment analysis as the founder of the discounted cash flow model。 Formulas are dated and can be discarded with fundamental understanding of TVM and financial modeling in Excel or other programming languages used as a modern substitute。 Principles and theory are still as relevant today as in 1938 when this book was published。 Users of this theory would not have been caught severly in either the 2001 bust or 2008 crash。 Case studies are thought provoking and applicable to even the modern economic world of today。 Read for the theory and take the concepts for use with modern tools and application。 。。。more
Yashavanth Somashekhar
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super
Rakesh
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You have to read it to know how important this book is。
Harold Citron
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Got about 2/3 of the way through and didn't finish， ultimately put back on the bookshelf。 Got about 2/3 of the way through and didn't finish， ultimately put back on the bookshelf。 。。。more
Tu Nguyen
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hi
Iliya Polihronov
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I think this is pretty much the only book one needs on how to value an investment。 Nothing I've seen published after that has improved too much on it， and many writing actually regressed。 It's a long read and there is some math， but the basic concepts are easy to grasp:1。 An investment is worth the discounted value of the dividends it delivers until the end of time。2。 The discount rate is not based on "equity risk premium"， but either a desired return or the risk-free alternative （depending on t I think this is pretty much the only book one needs on how to value an investment。 Nothing I've seen published after that has improved too much on it， and many writing actually regressed。 It's a long read and there is some math， but the basic concepts are easy to grasp:1。 An investment is worth the discounted value of the dividends it delivers until the end of time。2。 The discount rate is not based on "equity risk premium"， but either a desired return or the risk-free alternative （depending on the purpose of valuation）。3。 The prediction of earnings and dividends is based on analytical approach of breaking down and studying the business。4。 It's enormously important what a company will do with its earnings and whether they choose to retain them or pay them out as dividends。 And it all depends on the return a business can get on a dollar of retained earnings。 。。。more
Petras
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Considering it was first published in 1938， it is a classic that describes how to value the securities by looking at their cash flows。
Gabriel Pinkus
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The term "the intelligent investor" was used in the preface in this book。 I think there's a good possibility it inspired the naming of Ben's The Intelligent Investor。There are two absolutely wonderful ideas in this book （even though it takes hundreds of pages for John to get it out）。1。 The intrinsic value of a business （or any asset） is the discounted value of the cash that will be taken out of it over the rest of its lifetime。2。 A business which can reinvest its earnings at a satisfactory rate The term "the intelligent investor" was used in the preface in this book。 I think there's a good possibility it inspired the naming of Ben's The Intelligent Investor。There are two absolutely wonderful ideas in this book （even though it takes hundreds of pages for John to get it out）。1。 The intrinsic value of a business （or any asset） is the discounted value of the cash that will be taken out of it over the rest of its lifetime。2。 A business which can reinvest its earnings at a satisfactory rate of return ought to do so。 A business which cannot reinvest its earnings at a satisfactory rate of return ought not do so。 The idea is that $1 is often worth more in the hands of a good business with a good capital allocator than a bad business with a poor capital allocator。 。。。more
Claudius Odermatt
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Williams puts forth the idea that the true Intrinsic value of a business is its payout of dividends throughout its lifetime discounted back to the present value。 Great tool for valuation for those seeking fixed income from securities。 Fun Fact: Williams was one of the first to economically explain the idea of discounting a stream of income to the present value which ultimately came to be known as the discounted cash flow model。 originally used to value bonds he was the first to apply it to equit Williams puts forth the idea that the true Intrinsic value of a business is its payout of dividends throughout its lifetime discounted back to the present value。 Great tool for valuation for those seeking fixed income from securities。 Fun Fact: Williams was one of the first to economically explain the idea of discounting a stream of income to the present value which ultimately came to be known as the discounted cash flow model。 originally used to value bonds he was the first to apply it to equities。 。。。more
Hundwitiro Herménégilde
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Is ok
Sagar Shah
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