Description
Book SynopsisMost investment books try to assess the attractiveness of a stock price by estimating the value of the company.
Expectations Investing provides a powerful and insightful alternative to identifying gaps between price and value.
Trade ReviewAs I read the new edition of the book, it is clear that Al and Michael are writing a book for the times that we are in, with much more attention paid to disruption, and the value it creates and destroys, and user/subscriber platforms, which can be exploited for gain and thus provide optionality. -- from the foreword by Aswath Damodaran
In
Expectations Investing, Michael Mauboussin and Al Rappaport break down investing into its component parts, explaining what makes for good companies and attractively priced stocks. Which isn’t to say they make it easy. This is second-level thinking: a graduate-level course in intelligent investing. -- Howard Marks, cofounder and cochairman, Oaktree Capital Management, and author of The Most Important Thing Illuminated and Mastering the Market Cycle
Mauboussin and Rappaport’s approach to corporate valuation is as relevant and intelligent today as ever. Understanding expectations, assessing competitive strategy, appreciating optionality, and a laser focus on cash flow will make you a more effective investor in private or public markets. -- Bill Gurley, General Partner, Benchmark Capital
In
Expectations Investing, Michael Mauboussin and Al Rappaport build off the simple yet powerful observation that a company’s stock price embeds expectations. They then offer investors a rigorous method to identify gaps between what the price reflects and what is likely to happen. Truly a must have in any investor’s library. -- Annie Duke, author of
Thinking in Bets and
How to DecideOne of the few investing books that gave me an 'ah-ha' moment and changed how I think about investing. -- Morgan Housel, Partner, The Collaborative Fund, and author of
The Psychology of Money: Timeless Lessons on Wealth, Greed, and HappinessExpectations Investing was one of the first books that sparked my interest in investing. The core idea is as powerful as any, and the authors explain it in a way that makes it unforgettable. This excellent update to the original classic is must reading for all investors. -- Patrick O'Shaughnessy, CFA, CEO, O'Shaughnessy Asset Management, and author of
Millennial Money: How Young Investors can Build a FortuneIn this book Mauboussin and Rappaport teach readers how to achieve an investing edge by inverting a conventional investing process. The market’s expectations as implied by the current stock price are assessed before an analysis about how that price might change in the future. This method is straight up Charlie Munger-style inversion. Since margin of safety can be restated as a discount to expected value, understanding this process is invaluable. -- Tren Griffin, author of Charlie Munger: The Complete Investor and A Dozen Lessons for Entrepreneurs
This book is a special one. It’s a classic that … has been revised for modern time[s]. If you have been in the
investmentverse, Michael Mauboussin and Alfred Rappaport don’t need an introduction. They are both pillars in investment research. Mr. Mauboussin is known for his top-notch research and knowledge. Al Rappaport is professor emeritus at Kellogg School of Management and one of the most respected experts on markets. Most financial textbooks share three things in common: massive, boring and expensive. Not this one.
Expectations Investing is 272 pages of wisdom. * Brian Langis blog *
A revised and updated
Expectations Investing by Michael Mauboussin and Al Rappaport was released in 2021 by Columbia University Press and it's the best investing book I've ever read! Period. * The Motley Fool *
A must-read if you are pondering the best way to value certain start-up and technology companies. * Enterprising Investor *
A 'top personal finance book' selection. Investors will be able to evaluate companies’ stocks more effectively after reading this book and gain useful insights from the examples and case studies too. * Top Best in Singapore *
Mauboussin is a prolific researcher but also a gifted writer, and he puts those abundant talents to good use in [
Expectations Investing: Reading Stock Prices for Better Returns] with [Alfred] Rappaport. Laden with examples and checklists and thoughtfully organized, it is a good and very readable manual for experienced and novice analysts alike. * Morningstar's Recommended Reading List *
Table of ContentsForeword
Preface
Acknowledgments
1. The Case for Expectations Investing
Part I. Gathering the Tools2. How the Market Values Stocks
3. The Expectations Infrastructure
4. Analyzing Competitive Strategy
Part II. Implementing the Process5. How to Estimate Price-Implied Expectations
6. Identifying Expectations Opportunities
7. Buy, Sell, or Hold?
8. Beyond Discounted Cash Flow
9. Across the Economic Landscape
Part III. Reading Corporate Signals and Sources of Opportunities10. Mergers and Acquisitions
11. Share Buybacks
12. Sources of Expectations Opportunities
Notes
Index
