I am in the mist of writing a book about the problems with finance. In the book I suggest that there are a whole lot of problems with finance related to measuring returns, evaluating risks, attempting to compute the cost of capital and calculating value. I am nasty to financial academics, financial consultants and others. Unlike other finance books I begin with some philosophy, what growth, IRR and returns really mean and the implications of making overstating the cost of capital. I use financial models to prove some of my ideas such as computing earned risk premiums, evaluating returns with economic depreciation, measuring risk with and without mean reversion, understanding why the essence of project finance should be a starting point in finance analysis, how of projects and corporations can dramatically change over time, how terminal value and use of multiples should be a philosophic issue, how cost of capital can be measured objectively, how country risk premia are equivalent to corruption and how the CAPM can produce inaccurate results.
I have posted videos where I discuss the book and I work through different chapters in the videos. In the videos I promise that I will put the latest version of the book on my website. The current version in PDF format is attached to the button below. As I work through the chapters I will also post the excel files used in each chapter so you can see how things work and maybe learn some different techniques. If you have negative or even some positive comments I am begging for your feedback. Please send me an email to edwardbodmer@gmail.com and if I have a little encouragement I will use your email when I contact a publisher.
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Press this Button to Download Draft Version of My Book on Problems with Finance Theory and Practice
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Chapter 3 Back-up Excel Files
I have put the analysis files (the excel files) associated with each chapter on this page. Each file is attached to a button and some of the files are repeats of other files on the site. The first file that illustrates calculation of capital intensity is attached to the button below.
The files that I are used for the graphs and data in Chapter 2 are included in the buttons below. The back-up files are the stock price analysis files. These files are documented in the database section of the website.