EXPECTATIONS INVESTING BY ALFRED RAPPAPORT PDF

Read as pdf… Link to Amazon…. A great value investor needs to be a business analyst who grasps the competitive dynamics of businesses, who knows accounting - the language of business, who can value companies and also understand the psychology of others and himself. An excellent investor needs to be a contrarian. Reading value investing books is often a rehearsal on these key themes. What is yet distinctive is that they endorse starting the analysis with the most reliable signal of all - the price of the stock.

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Michael J. Investment Strategist at Credit Suisse. Michael joined CS in as a packaged food industry analyst. Michael has been an adjunct professor of finance at Columbia Business School since and is on the faculty of the Heilbrunn Center for Graham and Dodd Investing. BusinessWeeks Guide to the Best Business Schools highlighted Michael as one of the schools Outstanding Faculty, a distinction received by only seven professors.

Michael earned an A. He is also affiliated with the Santa Fe Institute, a leading center for multi-disciplinary research in complex systems theory, and is on the board of directors of Sermo, an online community for physicians. Goodreads helps you keep track of books you want to read. Want to Read saving….

Want to Read Currently Reading Read. Other editions. Enlarge cover. Error rating book. Refresh and try again. Open Preview See a Problem? Details if other :. Thanks for telling us about the problem. Return to Book Page. Preview — Expectations Investing by Alfred Rappaport. Peter L. Bernstein Foreword. Expectations Investing offers a unique and powerful alternative for identifying value-price gaps.

Rappaport and Mauboussin provide everything the reader needs to utilize the discounted cash flow model successfully. And they add an important twist: they suggest that rather than forecasting cash flows, investors should begin by estimating the expectations embedded in a compa Expectations Investing offers a unique and powerful alternative for identifying value-price gaps.

And they add an important twist: they suggest that rather than forecasting cash flows, investors should begin by estimating the expectations embedded in a company's stock price. An investor who has a fix on the market's expectations can then assess the likelihood of expectations revisions. To help investors anticipate such revisions, Rappaport and Mauboussin introduce an "expectations infrastructure" framework for tracing the process of value creation from the basic economic forces that shape a company's performance to the resulting impact on sales, costs, and investment.

Investors who use Expectations Investing will have a fundamentally new way to evaluate all stocks, setting them on the path to success. Managers will be able to use the book to devise, adjust, and communicate their company's strategy in light of shareholder expectations. Get A Copy.

Paperback , pages. More Details Original Title. Other Editions 3. Friend Reviews. To see what your friends thought of this book, please sign up. To ask other readers questions about Expectations Investing , please sign up.

Be the first to ask a question about Expectations Investing. Lists with This Book. Community Reviews. Showing Average rating 3. Rating details. More filters. Sort order. Apr 06, Arturo rated it it was amazing Shelves: finance , broyhill. Merece la pena leerse y reestudiarse. Oct 13, InvestingByTheBooks. A great value investor needs to be a business analyst who grasps the competitive dynamics of businesses, who knows accounting - the language of business, who can value companies and also understand the psychology of others and himself.

An excellent investor needs to be a contrarian. Reading value investing books is often a rehearsal on these key themes. What is yet distinctive is that they endorse starting the ana A great value investor needs to be a business analyst who grasps the competitive dynamics of businesses, who knows accounting - the language of business, who can value companies and also understand the psychology of others and himself.

What is yet distinctive is that they endorse starting the analysis with the most reliable signal of all - the price of the stock. The reason I picked up this book was that I wanted to improve on how to filter out interesting stocks. Screening may be a quick and easy tool but it's just the first step.

Multiples don't tell enough about whether a stock is cheap or not. Research shows that the market takes the long-term view and value companies based on discounted cash flows. In a recent podcast episode featuring Mauboussin, he mentioned that "you have to earn the right to use a multiple" and it ticked my interest. When I found out that he had co-written a book with Rappaport named Expectations Investing I decided to read it.

The book is structured in three parts where the first introduces the reader to the activities needed to grasp the price implied expectations PIE - the key theme of the book. The second, which is the most important part of the author's view on which I agree , deals with how to implement the method. The last part focuses on corporate signals and when they should lead the investor to update the outlook. The authors recommend beginning with an analysis of what the market consensus is about future sales, margins, taxes, and investments.

Knowing that leads to a free cash flow estimate. Discounted to today, it tells the investor how many years the company is expected to earn a return above the cost of capital. Believing the market is misjudging what the company should reasonably produce in the future, based on a historical analysis or through having special insights about the company and industry, it may be an interesting prospect.

This is where the hard works starts. Will the break from consensus come from unexpected volume growth, a better price and mix, cost efficiencies, barriers to entry or something else? Chapter nine of the book is great for the researcher as it describes the key drivers for physical-, service- and knowledge businesses.

Another aid is the concept of the "turbo trigger". If growth in sales is most likely to impact the value of the company, the focus should be on the factors leading to higher sales.

What if management is fraudulent? Well, to study its past actions and if the management incentives are aligned with the shareholders are always important.

Lastly, and maybe most crucially, beware of psychological biases. The best piece of the book in my view is a case study of the computer company Gateway which summarizes much of the ideas in the book and that can be used as a template for your security analysis.

I have already incorporated some of it in my work as I used the example on a company I was interested in while reading the book. To test concepts of a practical book while reading, is arguably the best way to learn. There is also a website for the book with case studies and free material www. If I were to mention something negative about Expectations Investing it is that the authors use a lot of technical terms that are hard for the beginner to grasp.

That is no issue for the more experienced investor though. On the other hand, time is a scarce resource and putting a lot of effort into researching stocks that are priced for perfection seems like a waste. Both methods have their drawbacks and are both hard but having read the book, I have tilted my process a bit in favor of Rappaport and Mauboussin's approach. Offers a fundamental framework to evaluate performance based expectations of the company to properly value of a stock in the long term.

Her is a key distinction: long term. Perhaps a one line summary would be: "The key to successful investing is to estimate Offers a fundamental framework to evaluate performance based expectations of the company to properly value of a stock in the long term. Perhaps a one line summary would be: "The key to successful investing is to estimate the level of expected performance embedded in the current stock price and then to assess the likelihood of a revision in expectations.

Jan 16, Peter S rated it it was ok. Second, you will earn superior returns only if you correctly anticipate revisions in those price-implied expectations. Prices reflect the expectations the market has for future cash flows. But investing the way outlined in this book, even with all the explanations given, seems sub optimal. Sep 05, Asif rated it liked it. Bit of a letdown actually. The framework for reverse engineering the stock price was not very new.

I learned things on those segments which has not been covered in any other book. Jan 20, Phil Toop rated it really liked it Shelves: finance. I found this to be a challenging read.

Implementing to techniques covered in the book would be a lot of work, and there would still be a lot left to guesswork. I did find a few useful points which could come in handy in company analysis.

Jun 28, Spence Byer rated it liked it.

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Tobias Carlisle: So much the better for chatting with you right now. You may be able to see in my bookshelf back there, many of your books are on prominent display. I think the story about how you came to write that is quite interesting, so would you let us know, how did that come about? I studied government. Well I take that back, I took accounting for non-business majors when I was a senior and got a C plus in the course, out of the gracious heart of the professor. I guess to some degree we still have those, but that was certainly the main thing I confronted.

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Expectations Investing: Reading Stock Prices for Better Returns

Identify an error in those perceptions; you, as an investor, have uncovered a Alfred Rappaport , Michael J. Expectations Investing offers a unique and powerful alternative for identifying value-price gaps. Rappaport and Mauboussin provide everything the reader needs to utilize the discounted cash flow model successfully.

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Below are the available bulk discount rates for each individual item when you purchase a certain amount. Publication Date: February 18, Rappaport and Mauboussin provide everything the reader needs to utilize the discounted cash flow model successfully. And they add an important twist: they suggest that rather than forecasting cash flows, investors should begin by estimating the expectations embedded in a company's stock price. An investor who has a fix on the market's expectations can then assess the likelihood of expectations revisions.

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