I was wondering how the L2 CFA material compares to these kind of books you mentioned…to anyone having experience of both, how much of the material foud in these valuation books are actually covered by the L2 CFa curriculum??
I was looking into this a couple months ago while procrastinating on studying… I was mostly interested in learning VBA side by side with modeling, but sounds like thats what you want too
Chandan Sengupta “Financial Analysis and Modeling Using Excel and VBA” - I bought this one but haven’t had a chance to use it yet as I was busy studying for L1. It’s not really about valuations at all, theres a chapter on option pricing and portfolios and some stuff about simulating stock prices or whatever. It’s definately more about learning VBA in a financial environment, which is what I bought it for.
The other book I was considering was Simon Benninga’s “Financial Modeling”, as it’s got some pretty good reviews on Amazon. I haven’t bought it so haven’t thumbed through it at all, but its one to look into.
I actually have a copy of this book. I am yet to read it though. I want to be able to create models in Excel, not just learn about the concepts. If I am not mistaken this book just covers the concepts though. Am I right?
ya you are right, the book only covers the concepts.
What i would suggest is that you could take up any company and try to build a model yourself refering to some of the books or forums like this when you get stuck. You can have a look at some of the sample models which would be there on the internet so that you would know what the basic structure is like.
There is a lot of material on the web and you would learn a decent amount this way.
Other books to consider are “Best Practices for Equity Research Analysts” (Valentine), or even just the Financial Times Guide to Corporate Valuation. The second is pretty short, about 200 pages, and having thumbed through it in the store I think it’d probably be a good starting point. Plus you can read it in a day or two if you go hard
The best practices one I also just thumbed through, and it looks more like just what the title says - best practices - so it basically distinguishes good habits from the bad. Won’t teach you how to model, but would be a good read when you’re still building habits.
While we’re on the topic does anybody know of any good commodities/NAV introductions? I know most of the prep providers have courses on it, but I’m looking for a good book at this point. Particularly on valuing upstream oil & services. Also, how about valuing private companies when data is less available?
I think it’s great to want to learn stuff, but personally don’t see how this can be learned from books? I’ve learned from over a decade building models in real life. Everyone I know who is good learned the same way. Not saying it’s not possible, just saying finding some real world work is probably the best education.
Yeah, Breaking into Wall Street has a bunch of operating models too, not just deal models. Of course, LBO and M&A models build off of operating models (i.e. standard three-statements, fully integrated). Look at the site and figure it out for yourself.
As others have mentioned, you need to learn by doing, not just by reading out of a book. That would be akin to watching some piano videos of Horowitz, Argerich, Rubinstein, and so forth on YouTube and then decide that you’re ready to become a concert pianist in two weeks. It makes no sense.
I asked someone the other day, “Do you know how to get to Carnegie Hall?” His response: “Practice.”
A few random thoughts here, maybe no real point, just rambling. But I’ve seen some horrible models (most of them are). This is an opportunity if you’re a geek like me; to 1) do it better, and/or 2) rip appart the logic in the useless model. It’s also a “hard skill”, meaning something tangible you can do.
This year we’ve been working on a multi-billion dollar deal with a huge name investor (can’t name em obviously), party A invests $xBB with party B, gets paid back when? Parties A and B both have tons of imbedded options. Endless scnarios. A new rapidly evolving and strange market. The weirdest deal I’ve ever modeled.
Anyhow I got ahold of the model from the analyst on party A side. It was as if the person never worked in finance. Shock. There was some really odd stuff in that model. And I bet the guy went to a top school and was getting paid big bucks to churn out that crap too. [facepalm]