How Are The Firms' Securities Valued? Available to Purchase

This article contrasts the traditional and the modern approaches to the valuation of securities. The new ideas are straightforward and the models simply describe the way in which many professional investors go about the business of maximising their wealth. The article is divided into two sections. The first focuses on modern portfolio theory to demonstrate the fundamental investment tradeoff between risk and return. The second presents a pragmatic approach to security valuation for investors who no longer believe in earnings multipliers.