Financial Modeling - Need to learn ASAP

[gdl203]

And he's such a great guy - I wouldn't be surprised if he replied to an email/question sent by someone following his course online and not enrolled in the school.

 

[v.freeman]

Damodaran is the man. He normally only teaches at the graduate level, but taught Corp Fin one year to the undergrads - probably the best class I took during my four years.

Keep in mind though, academic valuation is fairly different than what's used in practice (not sure if that's good or bad).

 

[gdl203]

Damodaran is actually close to what's done in practice. He teaches relative valuation (comps) which is ordinarily not seen as academically correct or relevant - even though it's the primary valuation methodology in practice.

 

[Beckwith]

I worked at two different bulge firms that hired Damodaran to come in a teach a modleing class. Really well done.

 

[v.freeman]

Originally Posted by gdl203

Damodaran is actually close to what's done in practice. He teaches relative valuation (comps) which is ordinarily not seen as academically correct or relevant - even though it's the primary valuation methodology in practice.

The way he teaches relative valuation incorporates regression analysis. From what I've seen in practice, most people just use multiples.

 

[gdl203]

Originally Posted by v.freeman

The way he teaches relative valuation incorporates regression analysis. From what I've seen in practice, most people just use multiples.

True but then again, his class would be 10 minutes long...

So he tells his students that it's common practice on the street to just use comparable multiples and simply apply them to metrics - then he gives his own views on how relative valuation should be done to be "correct" (which is as you pointed out using multiple variable regressions).

 

[uNiCoRnPriNcEsSx]

my friend in banking says if you can build models by scratch that'll help a lot in your interviews.

 

[v.freeman]

Originally Posted by gdl203

True but then again, his class would be 10 minutes long...

So he tells his students that it's common practice on the street to just use comparable multiples and simply apply them to metrics - then he gives his own views on how relative valuation should be done to be "correct" (which is as you pointed out using multiple variable regressions).

Yeah, I once explained how we were taught multiple regression during an interview. Guy looked at me like

Needless to say, I never tried doing that again.

 

[v.freeman]

And just so I add some value to this thread, what do you mean by "corp fin". Finance function at a financial services firm? Finance function at an industrial company? Business development?

The BIWS modules have my recommendations, assuming you mean modeling for business development.

 

[gnatty8]

Originally Posted by v.freeman

Yeah, I once explained how we were taught multiple regression during an interview. Guy looked at me like

Needless to say, I never tried doing that again.

lol, this can backfire if you try to outride your skills, you can be sitting across from a prick like me who'll say "Oh really?"

I used to attend Enron's Super Saturdays every couple months to interview applicants. From time to time you can really run into some truly miserable, sadistic bastards.

 

[GQgeek]

Originally Posted by Staggerlee

Look for ebook versions of "Financial Modeling in Practice" and "Financial Modeling using Excel and VBA".

edit: you went to NYU, professor Damodoran's website has great spreadsheets: http://pages.stern.nyu.edu/~adamodar/

Woah, nice site. not even in finance but im kinda tempted because i'm a ******* nerd. Gonna forward to my brother and tell him to get some useful skills to go with his useless econ degree.

 

[gnatty8]

All this talk about multiples reminds me of my last job, in which I was routinely part of a small team that would interface with investment bankers a good bit. Since I was alfalfa as fuk, my CFO tolerated some of my eccentricities, and one of them was whenever a pitch book got to the word "multiple", I would get up, politely excuse myself, and leave.

Nothing perpetuated the recession more than using this ******* bigger fool theory to put a value on something. I don't want to know what the rest of the herd if paying for some dogshit asset. I want to know what it's worth. Even more, what it's worth to me. I find there's no good substitute for valuing assets the old fashioned way. Trust me.

 

[Rummage]

Originally Posted by v.freeman

The way he teaches relative valuation incorporates regression analysis. From what I've seen in practice, most people just use multiples.

Yep, mostly multiples.

 

[Rummage]

In theory it's a lot, but honestly in practice it's pretty easy to do an M&A model.

DCF, LBO if necessary, comps.

 

[Rummage]

Originally Posted by gdl203

For Corp Fin / IB, you will not need to open Access once

Agreed.