Investment Philosophies: Successful Strategies and the Investors Who Made Them Work
Since the inception of the financial markets, investors have been bombarded with sales pitches from experts claiming to have found the secret formula or the magic model that guarantees investment success. In one corner, you have seasoned veterans telling you to buy businesses with solid cash flows and liquid assets because that's what worked for Warren Buffett. In another, you have financial professionals advising that in the new world of technology, you have to bet on companies with solid growth prospects. And still others recommend passive index investment as the way to outperform most active investors, or nontraditional investment strategies that have worked for a select group of successful hedge funds. The only thing this barrage of claims and counterclaims has created is investor confusion.
To successfully implement any investment strategy, you must first adopt an investment philosophy that is consistent at its core and which matches not only the markets you choose to invest in, but your personal preferences (risk tolerance, time horizons, etc.). In Investment Philosophies: Successful Strategies and the Investors Who Made Them Work, Aswath Damodaran will help you do this by going beyond the simple explanations of traditional and alternative investment strategies, to discuss the individual underlying philosophies that support these techniques.
Investment Philosophies explores many of the time-tested investment philosophies that investors have used over the years-from value investing and growth investing to technical analysis and market timing-and discusses some of the investors who made these philosophies work. This unique book will expose you to a wide range of investment philosophies to give you a sense of what drives investors in each philosophy, how they attempt to put these philosophies into practice, and what determines ultimate success. Damodaran offers an unbiased forum for the presentation of different investment philosophies, while supplying you with the tools-the definition and measurement of risk, the notion of market efficiency and how to test for inefficiencies, the components and determinants of trading costs-and the empirical evidence to make your own judgments on the investment philosophy that fits your specific investment goals and views of how markets work.
Filled with valuable insights, useful formulas, and comprehensive charts, this book provides you with the tools to pick an investment philosophy that is right for you. With Investment Philosophies as your guide you can be more confident in the way you or your fund managers invest.
Valuing an Asset with Contingent Cash Flows Options
Traded Financial Assets
Trading Costs with NonTraded Assets
Activist Growth Investing
Trading on Private Information
Trading on Public Information
Implementing an InformationBased Investment Strategy
The Foundations of Technical Analysis
The Contrarian Value Investor
Activist Value Investing
accounting acquisitions analysts annual returns arbitrage argue average beta bid-ask spread bond rate book value bubble buy stocks categorized companies consider correlation coupon coupon bond debt default risk discount divestiture dividend yield earnings announcements equity investors estimate evidence excess returns expected growth rate expected return factors Figure firm flows to equity forecasts futures contract growth investing hedge funds higher returns income increase index funds indicators initial public offerings instance interest rates investment philosophy investment strategies long-term look market risk market value measure multiple mutual funds negative NUMBER WATCH option PE ratios PEG ratios percent performance period portfolio managers positive premium present value price impact price-to-book private equity profits regression relative screens sector sell shares Sharpe ratios small cap stock prices stock returns success term tion trading costs transactions costs treasury bond undervalued valuation value investing value of equity variables
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