In Strategic Risk Taking: A Framework for Risk Management, Aswath Damodaran covers both sides of the risk equation, offering a complete framework for. Library of Congress Cataloging-in-Publication Data. Damodaran, Aswath. Strategic risk taking: a framework for risk management / Aswath Damodaran. p. cm. In Strategic Risk Taking: a Framework for Risk Management, Aswath Damodaran covers both sides of the risk equation, offering a complete framework for.
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In business and investing, risk has traditionally been viewed negatively: Great companies become great because they seek out and exploit intelligent risks, not because they avoid all risk. A Framework for Risk Management is the first book to take this broader view, encompassing both risk hedging at one end of the spectrum and strategic risk taking on the other. Here, Damodaran helps you separate good risk opportunities from bad risk threatsshowing how to utilize the former while protecting yourself against the latter.
He introduces powerful financial tools for evaluating risk, and demonstrates how to draw on other disciplines to make these tools even more effective.
Simply put, Damodaran has written the first book that helps you use risk to increase firm value, drive higher damodran and returns, and create real competitive advantage. Front Flap In business and investing, risk has traditionally been viewed negatively: That’s why most books on risk management focus strictly on hedging or mitigating risk. But the enterprise’s relationship with risk should be far more nuanced. World-renowned financial pioneer Aswath Damodaran–one of BusinessWeek’s top 12 business school professors–is singularly well positioned to take this strategic view.
His researchinterests include valuation, portfolio management, and applied corporate finance. Back Cover Beyond Traditional Hedging: Companies are learning today that is far aswatu narrow and constraining a definition. Risk, exploited judiciously, is absolutely central to business success.
Stategic Risk Taking
In Strategic Risk Taking: A Framework for Risk Management, Aswath Damodaran covers both sides of the risk equation, offering a complete framework for maximizing profit by limiting some risks and exploiting others. Damodaran presents a thorough and insightful review of the state-of-the-art in risk measurement, hedging, and mitigation. He covers a broad spectrum of risk assessment tools, including risk adjusted value, scenario analysis, decision trees, VAR, and real options.
But Damodaran goes far beyond other treatments of the subject, helping you decide when to deliberately increase exposure to certain risks, and clearly assess the potential dangers and payoffs of doing so. He teaches the corporate finance and equity valuation courses in the MBA program. His research interests lie in valuation, portfolio management, and applied corporate finance. Theory and TakimgApplied Corporate Finance: He has coedited a book on investment management with Riks Bernstein Investment Management and has written a book on investment philosophies Investment Philosophies.
His newest book on portfolio management is titled Investment Fables and was published in He was a visiting lecturer at the University of California, Berkeley, from towhere he received the Earl Cheit Outstanding Teaching Award in He has been at NYU since and received the Stern School of Business Excellence in Teaching Award awarded by the graduating class in,andand was the youngest winner of the University-wide Distinguished Teaching Award in He was profiled in Business Week as one of the top 12 business startegic professors in the United States in Would you like to tell us about a lower price?
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Customers who bought this item also bought. Page 1 of 1 Start over Page 1 of 1. Risk Management and Insurance. Security Analysis for Investment and Corporate Finance. How to Live with Uncertainty. From the Back Cover Front Flap In business and investing, risk has traditionally been viewed negatively: FT Press; 1 edition August 12, Language: I’d like to read this book on Kindle Don’t have a Kindle?
Share your thoughts with other customers. Write a customer review. Showing of 8 reviews. Top Reviews Most recent Top Reviews. There was a problem filtering reviews right now. Please try again later. Insightful of broad risk taking without going to deep into single subjects. Readers interested in gaining deeper knowledge can then find specific books on the subject. I found chapters 11, Strategic Risk Management, the most orginal. Again, no great depth but a strategci big picture view on fundamental issues in risk taking such as ‘Value and Risk Taking’, ‘Evidence on Risk Taking and Value’ and ‘Building the Risk-Taking Organization’.
Although it is actually not a textbook, this work from Prof. Damodaran taing useful to learn and recall relevant concepts of finance.
takibg The book was also useful and inspiring to me because it lead me to read other books from other authors quoted by Prof. Came in good condition.
Too often people consider risk a negative that is to be reflexively avoided. However, if we take the time to look we will see that this is really contrary to our everyday lives.
We take risks all the time, but we think we understand them and we assume that the negative outcomes are low cost compared to the benefits we can gain. Businesses invest in projects with risk because they have have calculated a positive expected return. Also, we know that US Treasuries are all but risk free and their return is low. Junk bonds have a high risk and they must provide a possibility of high return to pay purchases for taking on their risk.
The trick is to be able to learn about the true nature of the risk and to set up a situation where, to you, the expected return will be large enough to invite you to take on the risk of loss.
The book is in three parts. Chapters discuss a definition of risk, why we care about risk, what do we think about risk versus what do we think we think about riskand ways of measuring risk while all the chapters are good, this one is especially interesting.
Chapters cover tools you can use to understand and evaluate risk and return. Risk adjusted value, Probabilistic Approaches you know, scenario analysis, decision trees, simulations, and fitted distributions.
This is all explained in a way that a person with just basic mathematical skills can understand the discussion well. This is not a book limited to just quant oriented PhDs.
Strategic Risk Taking: A Framework For Risk Management
Chapters take you through what the author calls “The Big Picture”. First, he talks about the “conventional view” of discounted cash flows and other relative valuation models.
However, the then presents an expanded analysis using the same DCF and Relative Valuation and then option pricing. Damodaran then gives a few pages on hedging and some comments admodaran when risks pay off and what you should consider when developing your own strategy. Chapter 10 talks about risk profiling and hedging, chapter 11 finally lays out the author’s concepts of Strategic Risk Management. That axwath, why you should exploit risk, how camodaran go about it, and how an risk taking organization should be built.
The last chapter is a kind of pep talk to get out there and do it right. He reviews the core ideas of the book and lays them out as principles to etch strateggic your mind. A very good book. It is interesting, useful, and clearly written with just enough math to explain the concepts without overwhelming those without deep math skills.
Too many of the books I have read on risk deal with the subject as something to be avoided. Risk, properly assessed and entered into with open eyes, is essential to business and investing success. He offers a framework to limit some risks and exploit others.
The New York University finance professor draws a thorough portrait of risk measurement, hedging, and mitigation. He discusses the broad range of risk assessment tools, including risk adjusted value, scenario analysis, decision trees, VAR, and real options. His discussion of when to increase risk exposure is insightful and rarely found in risk management texts.
Damodaran argues there are 10 principles that should govern all risk assessment and management. Is threat and opportunity. Evokes mixed feelings about its existence.
Is not created equal.
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Measurement and assessment leads to better decisions. The key to risk management is deciding which risks to avoid, to pass through and to exploit. Management results in value creation. Management is everyone’s job. Taking organizations that are successful do not arrive there by accident. Simply put, this is the most complete treatment of risk I have read. Proper implementation of its principles will help readers drive increased returns and value.
I feel the book is casually written and lacks the structure and flow of material.