Learn · Reading list

Books

From first read to deepest reference.

  1. The Little Book of Valuation — Aswath Damodaran
    Start here. Every model in this app in 200 pages, with worked examples.
  2. The Intelligent Investor — Benjamin Graham
    Where margin of safety and the value-versus-price distinction come from.
  3. Expectations Investing — Michael Mauboussin and Alfred Rappaport
    The book on reverse DCF: read the price for the expectations it embeds.
  4. Narrative and Numbers — Aswath Damodaran
    How to connect the story of a company to the assumptions in the model.
  5. Investment Valuation — Aswath Damodaran
    The reference. Every formula here, with the derivations and the edge cases.
  6. Valuation: Measuring and Managing the Value of Companies — McKinsey & Company (Koller, Goedhart, Wessels)
    The practitioner’s standard, strongest on ROIC, reinvestment and the value driver formula.
  7. The Dark Side of Valuation — Aswath Damodaran
    Young, distressed, cyclical and financial companies, where the standard model breaks.
  8. Financial Statement Analysis and Security Valuation — Stephen Penman
    The residual income model from the accountant’s side, and how to read the statements.
  9. Security Analysis — Benjamin Graham and David Dodd
    The original text. Dense, but the reasoning about earnings power still holds.
  10. Options, Futures, and Other Derivatives — John Hull
    Geometric Brownian motion, Monte Carlo and Value at Risk, for the simulation tools.
  11. The Little Book That Still Beats the Market — Joel Greenblatt
    The Magic Formula and the case for ranking on quality and price together, in plain language.
  12. What Works on Wall Street — James O'Shaughnessy
    Decades of factor backtests, decile by decile: the bucket test as a book.
  13. Quantitative Value — Wesley Gray and Tobias Carlisle
    Building a value strategy with accounting checks, from the Magic Formula to Piotroski.
  14. Expected Returns — Antti Ilmanen
    The evidence behind value, momentum, low volatility and carry, and how much to expect from each.
  15. Active Portfolio Management — Richard Grinold and Ronald Kahn
    Information ratio, tracking error and transaction costs, the institutional reference.
  16. Advances in Financial Machine Learning — Marcos López de Prado
    Backtest overfitting and how to test a strategy without fooling yourself; technical.