By Bruce Greenwald, Judd Kahn, Paul Sonkin, and Michael Van Biema
This book is an update to value investing principles that Ben Graham would be proud of. Professor Greenwald takes us through the basic concepts of valuation with very specific instructions and examples. The first few chapters takes us through the various ways to value an enterprise including reproduction value of the assets, earnings power, and the value of growth within a franchise. You also get a feel for how these concepts should be looked at together and how they interact.
Finding hidden assets, undervalued business segments and misunderstood subsidiaries are also covered. The most fascinating concept to me was the chapter of valuing growth within the franchise and specifically how to quantify that. No one to my knowledge has done better work in this area.
The book is actually used in Professor Greenwald's class on Value investing at the Columbia business school. In June I was honored to be a part of that class and can only say that it was one of the highlights of my life. Bruce and his staff (Erin Bellisimo) couldn't have been nicer to me. They sent me a syllabus of their fall classes so I could get the books and study on my own. Bruce has taught the value investing program at Columbia for almost 20 years now. Some of his students have went on to become investment legends including Joel Greenblatt, Glenn Greenberg, and others. In fact he is often referred to as the guru to the guru's.
The book is for the fairly knowledgeable to advanced investor but if you're very interested in investing, and doing it right, this is one of the 3 or 4 books I would require you to read. I think Mr. Buffett once said if you understand the concepts in his course that's really all you need to know.
I have had detailed cliff notes printed up for this book. I like to look back and reread some of the concepts. I would be happy to share them with anyone.