Kerschner Family Chair Professor of Finance
Stern School of Business, New York University
- Big picture perspective on lessons on valuations with a review of the basics of valuation and how to convert tools and models into valuations
- Accounting is not finance—a look at the divide between an accounting mindset and a valuation mindset
- Just because you have a D and a CF does not mean that you have a DCF: Intrinsic value is about asking and answering questions about businesses and making consistent assumptions.
- Valuation is not modeling; valuation is more than modeling, it is better to be accurate than precise, and accuracy is relative.
- Precise models are not always accurate models, and the payoff to valuation is not determined by how accurate your valuation is but how accurate it is, relative to other people valuing the same asset—a look through the IPO valuation of Twitter.
- Price is not value: The value process and the pricing process are driven by different determinants and often yield different numbers for the same asset.
- Valuation is a craft: You have to keep working at it to get better, and investing takes faith; you have to have faith in your value (with no confirmation) and faith that the price will adjust to the value (with no proof). Both faiths will be tested, and most of us will be found wanting.
Specialty Focus Area: Capital Markets