Corporate Valuation for Portfolio Investment: Analyzing Assets, Earnings, Cash Flow, Stock Price, Governance, and Special Situations

CHAPTER 9

Conclusion

SOCIETY NEEDS PREDICTABLE and consistent measures of wealth in order to conduct commerce. The need is so acute as to allow virtually any measurement that produces a value. The financial crisis of 2007- 2009 persisted because of a continuing inability to value securities in a consistent and credible fashion.

Need for Humility in Valuation

This book has presented most, if not all, of the known methods of valuation, along with some of the authors. The need for valuation guidance becomes obvious when one considers the power of the credit rating agencies, renamed as Nationally Recognized Statistical Rating Organizations (NRSROs) under Section 702 of Sarbanes-Oxley.¹ NRSROs are powerful entities with de facto power to determine ...