ValuFocus Investing is written for individual andprofessional investors who face the daunting task of picking stocksand managing a portfolio in today’s volatile equity market. Thisreliable guide presents the LCRT Investment Process, an investingmethod that is based on cash flow facts, not media hype orspeculative impulse. In it, Rawley Thomas, with the help of WilliamMahoney, provides an accessible presentation of a contrarianinvestment model and the ValuFocus tool, which offers ahighly studious, detailed explanation of understanding a company’strue intrinsic value.
Once you are able to calculate a company’s intrinsic value byunderstanding if the market is currently under, fairly, or overpricing its stock, then you are able to invest wisely in the stockmarket. Investors who want to buy undervalued stocks, or sell(short) overvalued ones, will find this book an invaluableresource.
A key component to success in the market is the ValuFocusinvesting tool, which calculates the intrinsic value of everycompany in its database automatically. ValuFocus is simple to use,because with it you can visually compare current price to intrinsicvalue on a Value chart that displays all the tools needed to selecta stock to buy, sell, or short. Thus, an individual investor canbecome a highly skilled student of the modeling process and can usethis tool to pick stocks and manage their own portfolio.ValuFocus Investing offers both the fundamentals and moreadvanced strategies for investors who want to develop an enhancedframework for equity valuation.
ValuFocus Investing also proves useful for investorsinterested in value management and corporate governancethemanagers of business enterprises, who require capital frominvestors to run and grow their companies. This book is filled witha wealth of helpful concepts on value creation and the authorspropose a unique, consistent, and unified path for both investingwithin the corporation and external investing in the corporation’sstock.
Offering encouragement to individual investors by outlining amodel that delivers satisfying returns, ValuFocus Investingis especially useful for those who are patient and believe inlonger-term investing horizons.
Praise for ValuFocus Investing
“Rawley Thomas is one of the most experienced thinkers in thearea of corporate valuation anywhere in the world. Thisforty-chapter book is unique for two reasons. First, it iscomprehensive, having material about not only every aspect ofvaluation, but also his comparison of various approaches to eachtopic. It is literally encyclopedic. Rawley is not shy aboutincluding other authors’ objections to his methods for valuation,nor does he fail to advocate, with careful reasoning, his ownapproach. I have known Rawley for twenty to thirty years and havealways found him to be a fountain of knowledge. If you cannot haveRawley answer a question in person, this book is the next bestthing.”
Thomas E. Copeland, PhD, Richard Woltman Professor ofFinancial Economics, University of San Diego; CEO, CommercialValuation Consultants
“ValuFocus Investing is an extraordinary book in scopeand originality. Multiple levels of practical insights range fromthe history of valuation models, to the key differences amongmodels, and then to a process for investors to implement a modelthat is most likely to improve their investment performance.”
Bartley J. Madden, author of Wealth Creation: A SystemsMindset for Building and Investing in Businesses for the LongTerm
“Rawley is defining the frontier on intrinsic value. This bookmakes you question conventional financial wisdom and shows you newways to delve into proper valuations.”
Mitchel Abeyta, Managing Director, S&P Capital IQ
“The concepts incorporated in this book set the standard forfinancial and investment analysis when first developed by theauthors and remain so today. For compensation of all kinds, thismeans that the controllable drivers of gross cash investment andgross cash flow should become the core elementsfrom the shopfloor to the executive suite.”
Mark C. Ubelhart, world-recognized human capital practiceleader, former Hewitt Associates partner, and Global Analyticsshareholder
“ValuFocus Investing is an excellent and detailed reviewof the current state-of-the-art of cash flow-based stock selectionmodels. I highly recommend this book to practitioners who usequantitative models to help build and manage stockportfolios.”
Michael Lindh, CFA, CPA, former president, CFA Society ofChicago
“Easy to read, insightful, and a great breakthrough for theinvestor!”
Professor Michael J. Riley, DBA, former CFO of the PostalService, University of Maryland University College
“Thomas and Mahoney provide a comprehensive overview of equityvaluation.”
Javier Estrada, IESE Business School
“Thoroughly researched and tested, Thomas and Mahoney introducea fresh, new, proactive approach to modeling for serious valueinvestors.”
Charles F. Beauchamp, PhD, Middle Tennessee StateUniversity
“ValuFocus Investing offers both individual andprofessional investors an invaluable tool to help them estimate theintrinsic value of stocks.”
Michael Ehrlich, Associate Director, The Leir Center forFinancial Bubble Research, School of Management, New JerseyInstitute of Technology
About the Author
Rawley Thomas is President of LifeCycle Returns, Inc. (LCRT). He served as assistant treasurer of SuperValu Stores, joined Callard, Madden in 1981, cofounded Holt Planning in 1985, and directed Value Management research for The Boston Consulting Group for eleven years. Thomas is past Vice President of Practitioner Services for the Financial Management Association International (FMA) and is Chairman of the FMA Practitioner Research Committee. Currently, he serves on the Northern Illinois Accountancy Board and chairs the Financial Management Association Practitioner Demand Driven Academic Research Initiative (FMA PDDARI) supported by the CFA Society of Chicago.
WILLIAM MAHONEY is a veteran investor relations practitioner, journalist, and author. He spent twenty years as a communications and investor relations professional with companies such as Motorola, Scott Paper, and Esmark, and twenty-five years as an editor of investor relations and corporate governance publications, including Update, which is the official publication of the National Investor Relations Institute; Shareholder Value magazine; and the newsletter Valuation Issues. He has written a half-dozen books on investor relations and corporate governance. Mahoney began his career as a reporter for the Ft. Wayne News-Sentinel after graduating from Marquette University.
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