Suggested Reading

  • Equity Valuation
    • Investment Valuation: Tools and Techniques for Determining the Value of an Asset by Aswath Damodaran
      • This text is arguably the best resource available on equity valuation. It covers all the major techniques, is well organized by topic, and leaves you with enough information to begin valuing companies in the real world. It also includes links to datasets and Excel models on Damodaran’s website that supplement the text.
    • Equity Asset Valuation by CFA Institute
      • The CFA Institute investment series provides the same content as the CFA curriculum but in a condensed and catalogued form. It gives the theoretical building blocks to equity valuation for the uninitiated but may leave practitioners wanting.
    • Valuation: Measuring and Managing the Value of Companies by McKinsey & Company Inc.
      • An online search for the best books on valuation will undoubtedly place this text near the top. What you get is a comprehensive exploration of how to value firms using the economic profit model. The text includes a lot of contextual narrative (which makes for a long read) and tends to be written more for managers than analysts.
  • Financial Modeling
    • Financial Modeling by Simon Benninga
      • If you want to know how to model something in Excel, a good place to start is right here. While it may not be exhaustive on any particular subject, it covers numerous topics (including VBA) and is indispensable when making the conversion from financial theory to practice. It’s worth keeping a copy within arm’s reach from your desk at all times.
  • Stock Screening
    • What Works on Wall Street by James O’Shaughnessy
      • O’Shaughnessy Asset Management (OSAM) has back-tested various investment screening strategies and recorded the results over 700 pages of tables, charts and text. Be aware that the book has been criticized for its lack of statistical rigor and that reproducing the screens would require subscribing to extremely expensive databases.