Narrative and Numbers: The Value of Stories in Business

Aswath Damodaran

Published by Columbia University Press 2017

Narrative and Numbers

The Value of Stories in Business

Aswath Damodaran

In the series Columbia Business School Publishing

https://doi.org/10.7312/damo18048

Overview
Contents

About this book

Aswath Damodaran, finance professor and experienced investor, argues that the power of story drives corporate value, adding substance to numbers and persuading even cautious investors to take risks. In business, there are the storytellers who spin compelling narratives and the number-crunchers who construct meaningful models and accounts. Both are essential to success, but only by combining the two, Damodaran argues, can a business deliver and sustain value.

How to connect business value to story.

Author / Editor information

Damodaran Aswath :

Aswath Damodaran (MBA, PhD, Finance, UCLA) holds the Kerschner Family Chair in Finance Education and is Professor of Finance at New York University's Stern School of Business. His books include Damodaran on Valuation: Security Analysis for Investment and Corporate Finance, Second Edition (Wiley, 2006), The Little Book of Valuation: How to Value a Company, Pick and Stock and Profit (Wiley, 2011),and our own Narrative and Numbers.Aswath Damodaran is the Kerschner Family Chair in Finance Education and professor of finance at New York University's Stern School of Business. He is the author of Applied Corporate Finance, Fourth Edition (2014), Investment Valuation: Tools and Techniques for Determining the Value of Any Asset, Third Edition (2012), The Little Book of Valuation: How to Value a Company, Pick a Stock and Profit (2011), and Damodaran on Valuation: Security Analysis for Investment and Corporate Finance, Second Edition (2006).

Reviews

David Foster, CEO, Business Valuation Resources:
Damodaran takes us to the place where Joseph Campbell, Warren Buffett, and the best quantitative analyses of Nassim Taleb intersect, and his journey uncovers new value and risk missed by analysts who bias themselves by relying solely on storytelling or number-crunching. It's a hero's journey best supported by humility—and this first-person account of Aswath's own evolving narratives, analyses, and valuations of Alibaba, Amazon, Uber, Theranos, Ferrari, and more. He may have started as a quant, but Damodaran's now one of the most balanced analysts—and wonderful business and financial storytellers—writing and teaching today.

Michael Mauboussin, Head of Global Financial Strategies, Credit Suisse:
No one has contributed more to the craft of valuation than Aswath Damodaran. In Narrative and Numbers, he correctly shows that you can't understand the stock without the story. After Damodaran's eye-opening tour, you will forever appreciate the vital contribution of human nature to number-crunching.

Stephen Penman, author, Accounting for Value:
Damodaran, instructor to many on valuation, clearly demonstrates that quantitative valuation formulas are not sufficient: they must be applied with a more qualitative narrative about the business. But qualitative analysis has its dangers, not the least that we insert our own biases into the narrative. Damodaran nicely weaves stories into the more formal quantitative analysis, with check and balances that yield a more confident valuation.

Thomas E. Copeland, University of San Diego:
Professor Damodaran's point-counterpoint case studies make valuation a good read. Self-critical in his contemporary examples, he wisely cautions the reader that quality valuation requires both the right and the left side of one's brain—the number cruncher and the storyteller.

Paul Johnson, Nicusa Investment Advisors:
Damodaran's success in combining storytelling with traditional financial analysis and valuation is unprecedented. The book has the potential to be a cornerstone of both traditional valuation and business "pitching" as it shows how individuals from each world can benefit from co-opting tools from the other. The author takes us on his personal journey into the realization that numbers need a narrative in order to make them persuasive.

Topics

Frontmatter Publicly Available Download PDF	i
Contents Publicly Available Download PDF	v
Preface Requires Authentication Unlicensed Licensed Download PDF	vii
1. A Tale of Two Tribes Requires Authentication Unlicensed Licensed Download PDF	1
2. Tell Me a Story Requires Authentication Unlicensed Licensed Download PDF	10
3. The Elements of Storytelling Requires Authentication Unlicensed Licensed Download PDF	24
4. The Power of Numbers Requires Authentication Unlicensed Licensed Download PDF	36
5. Number-Crunching Tools Requires Authentication Unlicensed Licensed Download PDF	52
6. Building a Narrative Requires Authentication Unlicensed Licensed Download PDF	70
7. Test-Driving a Narrative Requires Authentication Unlicensed Licensed Download PDF	92
8. From Narratives to Numbers Requires Authentication Unlicensed Licensed Download PDF	110
9. Numbers to Value Requires Authentication Unlicensed Licensed Download PDF	128
10. Improving and Modifying Your Narrative— The Feedback Loop Requires Authentication Unlicensed Licensed Download PDF	151
11. Narrative Alterations—The Real World Intrudes Requires Authentication Unlicensed Licensed Download PDF	167
12. News and Narratives Requires Authentication Unlicensed Licensed Download PDF	184
13. Go Big—The Macro Story Requires Authentication Unlicensed Licensed Download PDF	205
14. The Corporate Life Cycle Requires Authentication Unlicensed Licensed Download PDF	227
15. The Managerial Challenge Requires Authentication Unlicensed Licensed Download PDF	247
16. The Endgame Requires Authentication Unlicensed Licensed Download PDF	263
Notes Requires Authentication Unlicensed Licensed Download PDF	267
Index Requires Authentication Unlicensed Licensed Download PDF	271

Language: English
Publisher: Columbia University Press
Audience: Professional and scholarly;
Pages
- Main content: 296
Illustrations
- Other: 88 figures

eBook

Published: January 10, 2017
ISBN: 9780231542746