Welcome to Expectations Investing
Expectations Investing offers a unique and powerful alternative for identifying gaps between stock price and value. Mauboussin and Rappaport provide everything the reader needs to utilize the discounted cash flow model successfully. And they add an important twist: they suggest that rather than forecasting cash flows, investors should begin by estimating the expectations embedded in a company's stock price. An investor who has a fix on the market's expectations can then assess the likelihood of expectations revisions.
To help investors anticipate such revisions, Mauboussin and Rappaport apply an “expectations infrastructure” framework to trace the process of value creation from the basic economic forces that shape a company's performance—sales, costs, and investments—to the resulting impact on value drivers.
Investors who use Expectations Investing will have a fundamentally better way to evaluate all stocks, setting them on the path to success. Managers will be able to use the book to devise, adjust, and communicate their company's strategy in light of shareholder expectations.
The revised and updated version reflects recent changes in accounting and the business landscape and provides new case studies and examples.