Where Value Hides

Where Value Hides Takes Market Segmentation to New Heights, Pointing the Way to Higher Profitability and Improved Shareholder Returns. 

Forget what you’ve learned about traditional market segmentation, especially the part where it says that greater market share equals higher profitability.  In his book Where Value Hides: A New Way to Uncover Profitable Growth for Your Business (Wiley, November 2006), Stuart Jackson, a vice president with L.E.K. Consulting, takes the position that bigger isn’t necessarily better. In many instances, he contends, it can actually be worse. Jackson notes that, as most companies use it, market share can be a misleading and dangerous measure. He writes that the trick lies in being able to identify the right market segments in which to focus efforts and improve one’s Strategic Market Position, or SMP.

Expectations Investing

Reading Stock Prices for Better Returns By Alfred Rappaport and Michael Mauboussin

In a sharp break from standard practice, Expectations Investing is a valuation process that uses the market's own pricing model, Discounted Cash Flow (DCF), with an important twist: Rather than forecast cash flows, expectations investing starts by interpreting the expectations implied by a company's stock price. Al and Mike align investing strategy with corporate strategy and share the valuation tools that have been used by successful shareholder value-oriented companies over the years. They demonstrate how the market really values stocks, how expectations revisions affect stock price, and how investors use this analysis to foresee shifts in a company's competitive dynamics.