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Strategies & Market Trends : The Rational Analyst -- Ignore unavailable to you. Want to Upgrade?

To: Scott H. Davis who wrote (110)	12/26/1997 2:47:00 PM
From: ftth	Read Replies (2) \| Respond to of 1720

[Growth models] Hi Scott, the basic Gordon growth model is used for valuing a company that is in it's steady-state (i.e. mature) stage of growth. Additional factors are added in for 2-stage or 3-stage growth estimates, but the parameters remain the same, they are just scaled in tiers and added together. One book which talks about many different methods of valuation is "Investment Valuation" by A. Damodaran. If you go to www.amazon.com, click on "search", then click on "By ISDN." The ISDN is 0471133930. A basic table of contents is listed. I think it is an excellent book, and discusses in great detail the pros and cons of numerous valuation methods and models. The chapter on PSR valuation derives the intrinsic PSR for a stable growth firm, expands this to a high growth firm, gives real examples, speaks to cross-industry PSR's, as well as using PSR's in investment strategies. O'shaughnessy just duplicated a lot of the information in Damodaran's book, but O'shaughnessy's book gets all the bogus acclaim like "Very likely, it will be the most important book on investing in this decade--Stock trader's Almanac; "could well become a classic" and on and on. Personally, I put "What works on Wall Street" at or near the bottom of the dozens of investment-related books I own. But hey, what do I know--my opinion is in stark contrast to the financial press that just drools over it for some reason. I have never referred to it again as a reference, after carefully reading it through once. I frankly don't know what the financial press see in it! dh