Investment Philosophies

Damodaran is a well-informed scholar with a gift for organized, clearly written syntheses of complex topics in modern finance. With Investment Philosophies he provides the uncensored facts about winning in the market place. If you are a fund manager, an investor, or simply a student of finance, you will want to read this book. Tom Copeland Managing Director of Corporate Finance, Monitor Group Professor Damodaran has zeroed in on the most important missing element of many investment management processes: a clearly defined investment philosophy which can serve as a beacon in difficult markets. He offers a cornucopia of philosophies and strategies that have worked for many of the most successful investors, and which have stood the test of time. Rob Arnott Chairman, First Quadrant, LP; Editor, Financial Analysts Journal As an investor, I always have to look back to my philosophy and strategy for taking risk and making money. This book is an invaluable aid for taking stock' before buying stock. It lays out the concepts and tools for understanding the basics of risk and return in the stock market, and presents a framework for any investor to construct his or her own investment philosophy. Mitch Julis Managing Partner, Canyon Capital Advisors Choosing an investment philosophy is the heart of successful investing. To make the choice, though, you need to look within before you look outside. 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 strategies that have allowed investors to reap rewards over the years, including value investing, growth investing, technical analysis, market timing, arbitrage, and indexing.

Contents :

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.