Watch out for the price-value gap

BVWireIssue #143-3
August 20, 2014

The difference between price and value is apparent when a company sells at a price much higher than its appraised value. But this gap can exist at any time, and it poses a problem for valuation analysts if they do not understand the exact nature of their engagement.

“I believe that there is a gap between price and value, and I also believe that the entire valuation profession is built on that assumption,” says Dr. Aswath Damodaran (Stern School of Business, New York University) in a recent interview with Business Valuation Update. “After all, if markets were efficient, we would not need the thousands of analysts and portfolio managers out there, right? I also believe that if you mistake your mission (doing pricing when you should be doing valuation, or vice versa), you can make some serious mistakes.”

In-person event: Dr. Damodaran will join BVR for an exclusive special event, Price and Value: Discerning the Difference, an Advanced Workshop, on September 10 in New York City. He will give his overview of the valuation process and how it differs from the pricing process. Exclusive premium seating is available on a limited basis for a select group to attend this presentation live in New York while it’s being webcast worldwide. For those who attend the live event, there will be a pre-event luncheon with Dr. Damodaran and an extended 30-minute live Q&A session. You’ll also receive a complete recording and transcript of the event as well as a copy of the book Damodaran on Valuation, 2nd Edition.

To reserve your spot to attend in-person, contact BVR today:; (503) 291-7963 ext. 2.

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