This book is one of the best books for investors out there. It guides on how to value financial assets and how to invest for the more productive outcome. The author has presented the ‘Dividend Discount Model’ which is used extensively by individual investors and institutions all around the globe. At the end of this article, download the free The Theory of Investment Value Pdf.
The Theory of Investment Value pdf Review:
The Theory of Investment Value was published first in 1938 and later revised in 1956 and 1964. John Burr Williams, the author of this book, is known as the founder of fundamental analysis. He was a famous economist of the 20th century who was very famous in his field. His book is based on his Ph.D. thesis and contains the concept of intrinsic value and discounted cash flow valuation.
Williams says that the value of any bond or stock depends on the inflow and outflow of cash. He believes that the government is not the good handler of the economy. The increase in taxes is the factor which can discourage potential investors and can also pull back the value of savings and earnings.
The Theory of Investment Value PDF Features:
- Williams focused on dividends and net earnings. According to him, the intrinsic value of a company is based on their future dividends and not their earnings.
- He had a lot of insight of the market crash of 1929 and The Great Depression. He used all that knowledge to devise his theories and to report his recording in this book.
- Williams wrote: “If earnings not paid out in dividends are all successfully reinvested, then these earnings should produce dividends later; if not, then they are money lost. In short, a stock is worth only what you can get out of it.”
- His findings became the basis for the formation of The Gordon Model.
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