Valuation and pricing are two very different processes. Many analysts/investors are often confident about one, but that does not imply confidence about the other. Pricing is an exercise of gauging demand and supply, reading investor moods and determining what people will pay for an asset, rather than what it is worth. Valuation is about estimating what an asset is worth, given its earning potential, growth and risk. You can tell whether an investor or analyst is a “pricer” or “valuer” by looking at the tools that he or she uses. The tools of choice for most pricers are relative valuation (multiples such as PE or EV multiples), where you assess how much you will pay for an asset by looking at what others are paying for similar assets (usually other companies in the same business), and technical analysis (where you use charts and indicators to gauge shifts in demand). The tools of choice for “valuers” are either discounted cash flow (DCF) or accounting based (building off book value) models.
As the global voice of professional technical analysts, the MTA asserts that technical and fundamental analysis are complementary tools. That they lead money managers or analysts to more secure conviction when navigating ever-changing markets.
In the opening keynote session Dr. Aswath Damodaran will frame out the 2017 Symposium and the tools integral to successful active money management. From the perspective of a valuation expert, Professor Damodaran will explore the forces that drive price above or below intrinsic value as well as some of the skepticism towards the active management industry. Attendees will take away an appreciation for the extreme rigor required to exploit market anomalies to generate consistent excess returns.
