Summary of Michael J. Mauboussin & Alfred Rappaport's Expectations Investing , livre ebook

Everest Media LLC - Everest Media

Découvre YouScribe en t'inscrivant gratuitement

Je m'inscris

Obtenez un accès à la bibliothèque pour le consulter en ligne
En savoir plus

32 pages

English

Vous pourrez modifier la taille du texte de cet ouvrage

Obtenez un accès à la bibliothèque pour le consulter en ligne
En savoir plus

A propos
Informations
Extrait

Description

Please note: This is a companion version & not the original book.
Sample Book Insights:
#1 The central theme of this book is that the ability to read market expectations and anticipate revisions of those expectations is the springboard for earning superior long-term returns. Stock prices express the collective expectations of investors, and changes in those expectations determine investment success.
#2 Expectations investing is a practical application of corporate finance principles that many companies have used for decades. It incorporates the concepts of value creation and competitive strategy analysis.
#3 The disappointing performance of professionally managed funds is not an indictment of active management, but rather reflects the suboptimal strategies used by many active professionals.
#4 Expectations investing draws from finance theory to pinpoint the market's expectations. It then taps appropriate competitive strategy frameworks to help investors anticipate revisions in expectations.

Sujets

Général

Finance

Informations

Publié par	Everest Media LLC
Date de parution	25 mars 2022
Nombre de lectures	0
EAN13	9781669364290
Langue	English
Poids de l'ouvrage	1 Mo

Informations légales : prix de location à la page 0,0150€. Cette information est donnée uniquement à titre indicatif conformément à la législation en vigueur.

Extrait

Insights on Michael J. Mauboussin & Alfred Rappaport's Expectations Investing
Contents Insights from Chapter 1 Insights from Chapter 2 Insights from Chapter 3 Insights from Chapter 4 Insights from Chapter 5 Insights from Chapter 6 Insights from Chapter 7 Insights from Chapter 8 Insights from Chapter 9 Insights from Chapter 10 Insights from Chapter 11 Insights from Chapter 12
Insights from Chapter 1

#1

The central theme of this book is that the ability to read market expectations and anticipate revisions of those expectations is the springboard for earning superior long-term returns. Stock prices express the collective expectations of investors, and changes in those expectations determine investment success.

#2

Expectations investing is a practical application of corporate finance principles that many companies have used for decades. It incorporates the concepts of value creation and competitive strategy analysis.

#3

The disappointing performance of professionally managed funds is not an indictment of active management, but rather reflects the suboptimal strategies used by many active professionals.

#4

Expectations investing draws from finance theory to pinpoint the market's expectations. It then taps appropriate competitive strategy frameworks to help investors anticipate revisions in expectations.

#5

The asset-weighted expense ratio for actively managed U. S. equity mutual funds averages about 0. 68 percent of asset value. In contrast, the equivalent expense ratio for passive funds is 0. 09 percent of asset value.

#6

The shift from identifying mispriced stocks to minimizing the variance from the benchmark has resulted in a decline in active share, a measure of how different portfolios are from their benchmarks. This has reduced the probability of outperforming benchmark indexes and index funds.

#7

Expectations investing helps identify undervalued stocks to buy or hold, and overvalued stocks to avoid or sell in the investor’s target universe. It not only helps investors identify undervalued stocks, but it also helps them identify overvalued stocks.

#8

The long-term discounted cash flow model is the right tool to read expectations because it mirrors the way the market prices stocks. Investors can be agnostic about the investment opportunity because the goal is to simply understand what financial expectations are priced in by the market.

#9

After we estimate current expectations, we apply the appropriate strategic and financial tools to determine where and when revisions in expectations are likely to occur. This allows investors to focus on the potential revisions that matter most.

#10

The full demonstration of expectations investing in the following chapters will reveal its superiority to widely used investment tools. But three prevalent misconceptions in the investment community deserve special mention: the market takes a short-term view, earnings per share dictate value, and price-earnings multiples determine value.

#11

The market is not reacting mechanically to quarterly earnings reports. It uses unexpected earnings results and management’s guidance about future earnings to revise expectations for a company’s future cash flows when appropriate.

#12

The shortcomings of earnings include the fact that they do not take into account the cost of capital, the incremental investments needed to support a company’s growth, or the time value of money.

#13

The two fundamental steps that determine earnings are revenue recognition and matching expenses with revenue. Companies can recognize revenue when they deliver products or services and can reasonably establish the amount they will collect from customers.

#14

The price-earnings ratio does not determine value, but rather derives from it. Price-earnings analysis is not a shortcut. It is an economic cul-de-sac.

#15

The shareholder value of EGI is $165 million, but the company’s actual value is $150 million because the $15 million investment increases annual after-tax cash flow by $1. 2 million, which is worth exactly $15 million. When new investments yield a return below the cost of capital, shareholder value decreases even as earnings increase.

#16

Earnings growth, even when accompanied by increases in shareholder value, can trigger reduced investor expectations and a fall in the stock price.
Insights from Chapter 2

#1

The process of expectations investing starts with the stock price, a rich and underutilized source of information, and determines the cash flow expectations that justify that price. Those expectations, in turn, serve as the benchmark for decisions to buy, sell, or hold a stock.

#2

The discounted cash flow model, which is based on long-term cash flows, sets prices in all well-functioning capital markets.

Univers
Ebooks
Livres audio
Presse
Podcasts
BD
Documents

Summary of Michael J. Mauboussin & Alfred Rappaport's Expectations Investing , livre ebook

Général

Finance

YouScribe

Le catalogue

Le service

Les conditions