I'm trying to learn more about valuation and how it would be employed on the buy side.

I've looked some older posts, and noticed that Damodaran (On Valuation, The Little Book of Valuation, Investment Valuation), Rosenbaum (Investment Banking:...), and McKinsey are all common recommendations, but this might be more for the sell-side.

If you could only choose one for buy-side learning, which one would you choose?

Comments (6)


Rosenbaum is for IB monkeys, hardly something you want to mention at HF or AM interviews. For general guides on valuation, I have read McKinsey, Damodaran, and Financial statement analysis and security valuation by Penman and found McKinsey and Penman to be more interesting ones.
But really, you should start trading (or investing).

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Do you have any suggestions on learning about valuation as you start investing? Other than my retirement, I have started to personally invest in order to become more "invested" in companies I find interesting. I feel comfortable spending time understanding the businesses and thinking about different future outcomes, but then start feeling a little lost when I need to contextualize with valuation.

It's funny, some analysts discount the importance of valuations, others say since the multiple is 50% of the share price, you should spend 50% of your time on it.


to me it's all just...an assumption. it's just about...if I were to word it, "just right enough" where it's not about the exact price, but just a sense in range of how much upside or downside. If we were all good at valuation, we'd be retired millionaires. I think of values given to companies just as..."fake values" being given. The books you've wrote will give you the basis and foundation you need. I'd maybe look at some others not based on just valuation.



Some others such as?


A few I loved.

-Margin of Safety by Klarman. I love Klarman but this is a good book. If you can't find it for cheap, that's fine.

2 that I love and recommend to a lot of people:

-The Most Important Thing by Marks. I loved it.

-7 Habits of Highly Effective People by I think Covey? Just read it. It's not related to valuations and finance but it's a good read.

I think another one I would say is recommended a lot is Einhorn's Fooling some of the People. Another good one is Dale's How to make friends and get people to like you?

There's a lot of books on finance. You have to decide whether you're looking for a textbook or something else. I will admit I've gotten most and enjoyed most of less financial jargon heavy books, where people really talk about their experiences and more of their history.


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