Fast-and-frugal financial analysis
Abstract
Valuation of corporations on the basis of their earning potential forms the bedrock of research in corporate valuation, capital market research, and the much studied post-earnings–announcement drift anomaly. In our final two substantive chapters we focus on earnings based valuation as a fruitful avenue of application of fast-and-frugal reasoning in finance. In this Chapter we begin by examining the valuation heuristics used by financial analysts in valuing corporations. We also outline a potential Probabilistic Mental Model of such a fast-and-frugal representation of stock market valuation using existing literature concerning the market for financial information.
Keywords
Earning based valuation; ...
Get A Fast and Frugal Finance now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
