Course Work

Value Based Research




Valuation is the fundamental link between a company's expected financial performance and its overall value and valuation .  Although valuation receives tremendous focus and attention on Wall Street, the general discussion centers around relative valuation and simplistic measures such as P/E and price to book.  Even the "heavy" discussions of valuation usually go no further than price-to-EBITDA multiples. 

Although we have not reinvented the concept of valuation, nor have we invented a new form of valuation, we believe in first principles.  As a consequence, all of our discussions on valuation center on discounted cash flow (DCF), its practical limitations and how to use it in the real world.  Although considered "retro" by many, and difficult to use effectively by most, it is the only true economic measure of "value."  As a result, we must learn to use it well.  All other "valuation measures" are merely rules of thumb, or heuristics, and can be very misleading to all but the most experienced user.

Click on the titles to view the reports in Acrobat

Clear Thinking about Share Repurchase - January 10, 2006

M&M on Valuation - January 14, 2005

Employee Stock Options - September 7, 2004


Valuation: An Epistemological View - Spring 2002

Thoughts on Valuation - October 21, 1997

Does Valuation Matter - Paul Johnson, June 16, 1997

Open Letter to Warren Buffett - Paul Johnson, February 20, 1997






This page was last updated on 02/25/06.