Title Details

ASWATH DAMODARAN is Professor of Finance at New York University's Leonard N. Stern School of Business. He has been the recipient of numerous awards for outstanding teaching, including the NYU university-wide Distinguished Teaching Award, and was named one of the nation's top business school teachers by BusinessWeek in 1994. In addition, Damodaran teaches training courses in corporate finance and valuation at many leading investment banks. He is the author of Investment Valuation, Corporate Finance, Investment Management, and Applied Corporate Finance, all published by Wiley, as well as The Dark Side of Valuation.

CHAPTER 1: Introduction.

What Is an Investment Philosophy?

Why Do You Need an Investment Philosophy?

The Big Picture of Investing.

Categorizing Investment Philosophies.

Developing an Investment Philosophy: The Step.

Conclusion.

CHAPTER 2: Upside, Downside: Understanding Risk.

What Is Risk?

Equity Risk and Expected Return.

A Comparative Analysis of Risk and Return Models.

Models of Default Risk.

Conclusion.

CHAPTER 3: Numbers Do Not Lie—or Do They?.

The Basic Accounting Statements.

Asset Measurement and Valuation.

Measuring Financing Mix.

Measuring Earnings and Profitability.

Measuring Risk.

Differences in Accounting Standards and Practices.

Conclusion.

CHAPTER 4: Show Me the Money: The Basics of Valuation.

Intrinsic Value.

Relative Valuation.

Valuing an Asset with Contingent Cash Flows (Options).

Conclusion.

CHAPTER 5: Many a Slip: Trading, Execution, and Taxes.

The Trading Cost Drag.

The Components of Trading Costs: Traded Financial Assets.

Trading Costs with Non-Traded Assets.

The Management of Trading Costs.

Taxes.

Conclusion.

CHAPTER 6: Too Good to Be True? Testing Investment Strategies.

Market Efficiency and Investment Philosophies.

Market Efficiency: Definition and Implications.

Closing Thoughts.

Conclusion.

CHAPTER 7: Smoke and Mirrors? Charting and Technical Analysis.

Random Walks and Price Patterns.

Investor Irrationality.

The Foundations of Technical Analysis.

Technical Indicators and Charting Patterns.

Conclusion.

CHAPTER 8: Graham’s Disciples: Value Investing.

Who Is a Value Investor?

The Passive Screener.

The Contrarian Value Investor.

Activist Value Investing.

Conclusion.

CHAPTER 9: The Allure of Growth: Small Cap and Growth Investing.

Who Is a Growth Investor?

Passive Growth Investing.

Activist Growth Investing.

Conclusion.

CHAPTER 10: Information Pays: Trading on News.

Information and Prices.

Trading on Private Information.

Trading on Public Information.

Implementing an Information-Based Investment Strategy.

Conclusion.

CHAPTER 11: A Sure Profit: The Essence of Arbitrage.

Pure Arbitrage.

Near Arbitrage.

Speculative Arbitrage.

Long Short Strategies—Hedge Funds.

Conclusion.

CHAPTER 12: The Impossible Dream? Timing the Market.

Market Timing: Payoff and Costs.

Market Timing Approaches.

The Evidence for Market Timing.

Market Timing Strategies.

Connecting Market Timing to Security Selection.

Conclusion.

CHAPTER 13: Ready to Give Up? The Allure of Indexing.

The Mechanics of Indexing.

A History of Indexing.

The Case for Indexing.

Why Do Active Investors not Perform Better?

Alternative Paths to Indexing.

Conclusion.

CHAPTER 14: A Road Map to Choosing an Investment Philosophy.

A Self-Assessment.

Finding an Investment Philosophy.

Conclusion.

REFERENCES.

INDEX.

“…a complete guide to the approaches that is needed for those whose dream is to be rewarded vast wealth…”(Portfolio International, May 2003)