Download Narrative and Numbers: The Value of Stories in Business by Aswath Damodaran PDF

By Aswath Damodaran

How can an organization that hasn't ever became a revenue have a multibillion greenback valuation? Why perform a little start-ups allure huge investments whereas others don't? Aswath Damodaran, finance professor and skilled investor, argues that the facility of tale drives company worth, including substance to numbers and persuading even wary traders to take dangers. In enterprise, there are the storytellers who spin compelling narratives and the number-crunchers who build significant types and bills. either are necessary to luck, yet purely through combining the 2, Damodaran argues, can a company bring and maintain value.

Through a number case reports, Narrative and Numbers describes how storytellers can greater contain and narrate numbers and the way number-crunchers can calculate extra creative types that face up to scrutiny. Damodaran considers Uber's debut and the way narrative is essential to figuring out varied valuations. He investigates why Twitter and fb have been valued within the billions of greenbacks at their public choices, and why one (Twitter) has stagnated whereas the opposite (Facebook) has grown. Damodaran additionally appears to be like at extra proven company types corresponding to Apple and Amazon to illustrate how a company's heritage can either improve and constrain its narrative. and during Vale, an international Brazil-based mining corporation, he indicates the effect of exterior narrative, and the way state, commodity, and foreign money can form a company's tale. Narrative and Numbers unearths the advantages, demanding situations, and pitfalls of weaving narratives round numbers and the way one could top try out a story's plausibility.

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Extra resources for Narrative and Numbers: The Value of Stories in Business

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S. Treasury cannot default and that the securities that it issues (Treasury bills and Treasury bonds) are thus guaranteed, risk-free investments, you can estimate historical equity risk premiums from past data. S. 23 percent over the same period. 18 percent is labeled a historical equity risk premium and used by practitioners as the estimate for the future. Probing that number a little more, it should be noted that this average comes from stock returns that are volatile, with returns ranging from a high of almost 50 percent in 1933 to a low of close to −44 percent in 1931.

If you are not passionate about your story, why would you expect anyone else to be? Rather than go through the usual litany of business dos and don’ts, I decided to turn to Pixar, one of my favorite storytellers, for lessons. I remember watching Toy Story with my children and marveling at how well T H E E L E M E N TS O F STO RY T E L L I N G 35 the storytelling kept both adults and children engrossed, and my admiration for the studio’s storytelling capabilities have only increased over time. I was happy to discover that Emma Coats, who used to work at the studio, had put together a simple manual for storytelling based upon her experiences, titled the 22 Rules to Phenomenal Storytelling.

S. 23 percent over the same period. 18 percent is labeled a historical equity risk premium and used by practitioners as the estimate for the future. Probing that number a little more, it should be noted that this average comes from stock returns that are volatile, with returns ranging from a high of almost 50 percent in 1933 to a low of close to −44 percent in 1931. 2 captures this volatility in stock returns. 30 percent. What does that mean? 3 The numbers get even shakier if you bring in the fact that your estimation choices affected your estimate.

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