McKinsey vs Damodaran on Valuation

CFA General
#21

I also happen to have Benninga/Sarig’s “Corporate Finance”. My old valuation prof says that this is his favorite book. It dives deeper into the accounting than any other book he’s seen. The worst thing about this book is that is dated (1996), and that the authors will probably never collaborate on another work again.

http://www.amazon.com/Corporate-Finance-A-Valuation-Approach/dp/0070050996/ref=sr_1_3?ie=UTF8&qid=1359734593&sr=8-3&keywords=benninga+valuation

–

The prof also said that Pratt is better at diving into all other issues, like legal structures, etc.

http://www.amazon.com/Valuing-Business-5th-McGraw-Hill-Investment/dp/0071441808/ref=sr_1_1?s=books&ie=UTF8&qid=1359735474&sr=1-1&keywords=pratt+valuing

Again–I haven’t used either, outside of in the MBA classroom. I’m going by what others have said.

#22

This the fellow?

http://poetsandquants.com/2012/10/22/worlds-best-b-school-professors-aswath-damodaran/

Aswath Damodaran** Stern School of Business**

Claim to Fame: Finance expert

Education:

UCLA, PhD, Finance UCLA, MBA, Finance Indian Institute of Management; MS, Management Madras University, BCom, Accounting

At Stern Since: 1986

Before Stern: Visiting lecturer at the University of California, Berkeley

Fun Fact: I used to teach tennis before I started teaching finance.

If I wasn’t teaching, my dream job would be: Playing shortstop for the Yankees.

Best part of the job: Having a captive audience for my shtick and then getting to review that audience (with grades). Making a difference in how people think about numbers/finance and being my own boss.

Worst part of the job: Assigning a substandard grade to someone who has learned a great deal but may not have been able to show that in tests/exams/reports.

When Professor Aswath Damodaran sets out to teach a class or give a lecture, his goal is to convert each student into a born again finance enthusiast. Damodaran’s passion for teaching finance has garnered him high marks for teaching excellence. In 1988 and 1990 he was presented with Stern’s Excellence in Teaching Award and NYU’s Distinguished Teaching Award, respectively. The impression he has left on MBA students over the years is demonstrated by his repeated rank as the leading vote-getter for Professor of the Year, an award he has received five times during his career at Stern.

Professor Damodaran’s enthusiasm stems from his research and interests in the areas of valuation, corporate finance, and investment management. He has written several key texts on these topics; texts which are highly regarded and widely used throughout academia. In 2011 he partnered with Anant Sundaram from the Tuck School of Business to create an iPad app for investors. uValue is a free valuation tool available for investors on iTunes.

Students Say:

What I find amazing about Professor Damodaran is his accessibility. He makes himself available to speak with students, not only immediately before and after class, but also nearly anywhere or anytime he is on campus. And when he’s not on campus he often responds to emails within minutes, no matter the day or time or where he might be in the world at that particular moment. — Michael Tarulli – MBA Class of 2011

#23

That’d be him.

#24

I wanted a 100% practical approach so I bought Wall Street Prep. You will not learn any new theory if you have a finance/accounting background. However, you will learn how to build models from a practical point of view. I recently was asked by my boss to build a model (my first in the real world yay!) and he was impressed by the quality of the model. I had to change the layout and assumptions but it doesn’t matter when you understand how it works. I bought the full package and it took me 55 hours to complete. I did took my time and often paused the videos.

#25

which book is every1 referring to here? is it damodran on valuations or investment valuation by a. damodran??

#26

Valuation is closer to practice, and focuses more on corporate finance than straight equity valuation, but only slightly. Both are all around outstanding books with their virtues. I honestly can’t pick one over the other, although Damodaran’s book had very useful insights on some uncommon valuation issues and theory.

The book we refer to is Investment Valuation. Pratt has good books with more focus on small businesses, and specific issues.

#27

how relevant is the book for learning equity valuation¿ if i already dis fiancial modelling ny simon bennings does the book have any overlap? any better books for learning eauity valuations?

#28

I think Valuation is the better book for starters. No one model is the same for each industry, or even company. There is an excellent template by McKinsey you can use to practice. But you need to understand it’s a little more complicated than that, and ultimately, you’d have to deviate from presets for idiosyncracies.

#29

valuation as in investment valuation by damodran?right? and thanks

#30

No, Valuation by McKinsey, not Investment Valuation by Damodaran.

#31

He isn’t the authority on valuation, but he is good enough to pay attention to.