EconPapers    
Economics at your fingertips  
 

Performance Measurement: An Investor's Perspective

Charles Lee

Research Papers from Stanford University, Graduate School of Business

Abstract: This article discusses the role of GAAP accounting from an investor's perspective. For all its flaws, a historical-based system of accounting is vital to the investment community, and I believe moves toward fair value accounting should proceed with great caution. Framing the discussion in terms of valuation theory, I argue that investors are typically more interested in assessing the present value of residual income than the value of assets-in-place. I also provide examples of how historical accounting numbers can be (and are being) used by professional investors. A simple residual income framework succinctly captures the essence of value investing. In fact, what academics have learned about fundamental investing in recent years dovetails nicely with the strategies used by such legendary investors as Ben Graham, Warren Buffett, and Joel Greenblatt.

Date: 2014-03
New Economics Papers: this item is included in nep-acc and nep-mfd
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.gsb.stanford.edu/faculty-research/worki ... nvestors-perspective

Related works:
Journal Article: Performance measurement: an investor's perspective (2014) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecl:stabus:3065

Access Statistics for this paper

More papers in Research Papers from Stanford University, Graduate School of Business Contact information at EDIRC.
Bibliographic data for series maintained by (workingpapers@econlit.org).

 
Page updated 2024-12-30
Handle: RePEc:ecl:stabus:3065