EON Investment Insights
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Participants in the securities market can be divided into two groups: Smart investors conduct in-depth analysis of organizations and determine their intrinsic value, or more precisely, a range […]
What determines an organization’s value?Value = (Price – Cost) / Invested Capital Edward Mason’s Structure-Conduct-Performance model (which is based on Michael Porter’s frameworks) suggests that an organization’s created […]
Here’s another interesting nuance I came across in the work of McKinsey & Co. and their co-authors, which I want to share with you: Investment platforms for securities […]
the percentage of total market cap relative to the GNP is “probably the best single measure of where valuations stand at any given moment.” – Warren Buffett Is […]
How Does Financing Structure Affect Risk? In essence, the financing structure does not impact the value of an organization. Value is created by the assets, and it doesn’t […]
Should Professionals Invest in Equities Based on P/E Ratios? Evaluating the Usefulness of P/E Ratios for Investment Decisions Many investors rely on the Price-to-Earnings (P/E) ratio as a […]
1. Bernoulli’s Utility Theory (Expected Utility Theory) Example: A person will prefer $10 for sure over a 50% chance of $20 because the utility of $10 is greater […]
Delays in construction projects and massive budget overruns appear to be not just a Georgian problem. Daniel Kahneman, in his book Thinking, Fast and Slow, refers to this […]
In the construction-development sector, bubble formation can be stimulated by various factors, but I want to highlight two key systemic factors here: 1. The bullwhip effect, and 2. […]
When leasing real estate through long-term contracts, there are two interesting practices that private investors often overlook: indexed and revenue-linked rent. Indexed Rent Indexed contracts provide a hedge […]
How does borrowing change the return on your real estate investment? Worked examples explain how home-price growth and loan-to-value ratios amplify gains—and losses.
Game theory is a fascinating and complex discipline that requires years of study to master. Here, I’ll cover the main directions and strategic insights, and finally, upload Excel […]
The appeal of valuing both financial and real options using binomial trees lies in their ability to evaluate more complex and nuanced situations. The Black-Scholes formula has many […]
Among investors in the securities market, there’s a saying: “Sell in May and go away.” Below is some supporting data, but what causes this? The chart below shows […]
From the perspective of evaluating innovative projects, the model for releasing a new drug is very interesting. The process is fully regulated by the government, as neither the […]
Financial options are equivalent to “the right to choose,” and they have their specific, calculable value… Besides financial options, there are real options, whose identification, creation, and utilization […]
Representativeness can heavily influence investor decisions and analyst forecasts. This cognitive bias leads us to assume that past performance will persist, making it a common source of error […]
The valuation of real options can be approached in the same way as financial options, though the main issue here is finding the correct discount rate. To remind […]
