cover image EXPECTATIONS INVESTING: Reading Stock Prices for Better Returns

EXPECTATIONS INVESTING: Reading Stock Prices for Better Returns

Alfred Rappaport, Michael J. Mauboussin, . . Harvard Business School, $29.95 (224pp) ISBN 978-1-57851-252-2

Instead of focusing on the short term—earnings per share, price-earnings multiples—Rappaport (Creating Shareholder Value), formerly a professor at Northwestern's Kellogg School of Management, and Mauboussin, chief investment strategist at Credit Suisse First Boston, recommend "expectations investing," which "starts with the current stock price and uses the discounted cash-flow model to 'read' what the market implies about a company's future performance." They discuss sample companies (Gateway), historical patterns, competitive strategies and share value. Though they expertly simplify a complex topic, beginners may find the book overly technical. However, the authors' credentials, a national interview campaign and author appearances should attract deserved attention. Tables. (Oct. 24)