EON Investment Insights
“I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines” - Charlie Munger
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The text discusses the challenges and methods involved in valuing financial institutions, particularly banks, compared to corporations. Here’s an English translation: Valuing Banks: It is considered that evaluating […]
Evaluating organizations operating in developing countries is associated with certain difficulties, and in this area, academics and practitioners often do not agree. The issue is that developing markets […]
When evaluating an organization, one of the important decisions concerns the target leverage, which affects the WACC (Weighted Average Cost of Capital) and consequently the valuation outcome (naturally, […]
The optimal level of financial leverage is determined, on the one hand, by the amount of tax savings an organization receives by deducting interest expenses, and on the […]
The decision to pay dividends or repurchase shares impacts stock prices due to the expectations and signals such decisions create. Therefore, these decisions need to be systematic and […]
Financial theory tells us that there is an optimal capital structure derived from tax savings and the risks of financial leverage, but it says little about how to […]
The market views divestment positively as an event, even though management usually avoids such decisions. However, divestment does not always create value and can sometimes result in negative […]
Mergers and acquisitions can be executed either with cash or by transferring the shares of the new company. What is the difference? When the acquisition is done with […]
Managers often justify mergers and acquisitions by claiming that the operation is accretive, meaning that EPS (earnings per share) increases, and therefore shareholders should be satisfied. However, the […]
According to McKinsey’s research (1999-2013, 1770 transactions), the combined value of the acquiring and acquired organizations increased by an average of 5.8% as a result of acquisitions. In […]
Understanding what creates value and how it is created is critically important. A good format to grasp this is through a value creation tree diagram: First, let’s start […]
“When a management team with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.” […]
Many investors believe they are Dr. Jekyll, but research confirms that Mr. Hyde lives within each of them. As researchers say, we humans struggle to assess the “beast” […]
When viewed through the lens of human behavior, even a fundamental economic model like the principle of equilibrium in demand and supply curves comes into question… The issue […]
We make decisions based on the principle of relativity and then consider them “rational.” This also happens when making investment decisions, especially when we use the multiples method […]
“Many want to be long-term investors, but as the graph shows, few succeed. As behaviorists say, the problem is fundamental for investors. Last week, I read this book: […]
Sometimes, the financial statements of a subsidiary are translated into the parent company’s currency before being presented, which complicates the evaluation of the subsidiary. In such cases, it’s […]
High inflation erodes the value of an organization because passing inflationary pressure onto customers is challenging and often not initiated – managers often do not realize the impact […]
