Accounting for Value

Laying aside many of the tools of modern financeùthe cost-of-capital, the Capital Asset Pricing Model, and discounted cash flow analysisùStephen Penman returns to the common-sense principles that have long guided fundamental investing: Price is what you pay but value is what you get; the risk in investing is the risk of paying too much; anchor on what you know rather than on speculation; and beware of paying too much for speculative growth. Penman puts these ideas in touch with the quantification supplied by accounting, producing practical tools for the intelligent investor. --