Harvard Business Review

FEBRUARY 7, 2011

For decades multinational corporations have poured hundreds of billions of dollars of foreign investments into emerging markets , sometimes preferring the investment climate of "stable" authoritarian regimes over "messy" democracies. In both places, we know the instability will worsen macroeconomic performance in the short term.

NPV 12

NPV Short-term Discount Politics 12

Harvard Business Review

DECEMBER 22, 2010

From where I sit as an economist, it's still all about the economy and the long-term impact of the problems laid bare by the Great Recession. Consider, for example, that the estimated net present value of obligations under the Social Security system is approximately $8 trillion.

GDP 15

GDP Net Present Value Crisis Cost 15

Harvard Business Review

MARCH 10, 2011

When executives evaluate a potential investment, whether it's to build a new plant, enter a new market, or acquire a company, they weigh its cost against the future cash flows they expect will spring from it. To make sure they're comparing apples to apples, they discount those future cash flows to arrive at their net present value.

CAPM 13

CAPM Cost Discounted Cash Flow Cost of Capital 13

Harvard Business Review

FEBRUARY 24, 2011

But why compare apples (book value) to oranges (share price and dividends)? Buffett explains that book value is the best proxy for "intrinsic value," the net present value of all estimated future cash flows. Consider that since 1965, Berkshire's book value grew 434,057% and the S&P index grew only 5,430%.

Letter 14

Letter P&L Net Present Value Insurance 14

Harvard Business Review

SEPTEMBER 27, 2012

Rail accounted for only 20% of long-haul shipments in Brazil, compared with 80% in most countries. Any proposal, the rules said, should: remove obstacles to growing revenues, minimize up-front expenditure, provide benefits immediately (rather than paying off in the long term), and. reuse existing resources.

Strategy 8

Strategy Proposal Guidelines Net Present Value 8

Harvard Business Review

APRIL 27, 2017

” Laying out their data, they find that long-term oriented companies create more financial value and more jobs. I agree with their vision of a future in which more companies focus on the long term and become more productive for the world (their findings accord with my own work on the dangers of short-termism ).

Hedge 9

Hedge Short-term Long-term NPV 9

Harvard Business Review

APRIL 2, 2014

In the long-version explanation of the prizes published by the Nobel committee last fall, Campbell was cited more often than anybody else, apart from the three winners. You know, the future value of money, the present value of money — money today is worth more than in the future because you can invest it and get interest.

CAPM 8

CAPM Discount Price Finance 8

Strategy Driven

SEPTEMBER 9, 2011

Many conventional metrics we use to estimate value are based on faulty assumptions. Net present value [NPV] is a case in point. Companies have long struggled to generate sustained profitable growth – and few have succeeded. If it is positive, it’s thumbs up, if it’s negative, it’s thumbs down.

Innovation 50

Innovation NPV Business Model Constraint 50