LOS ANGELES – As I left the Kyoto Grand Hotel and Gardens in Los Angeles, California earlier in the week and very early in the morning, Los Angeles was sleeping. It was eerily quiet, giving me time to reflect on the value drivers that influence each of the businesses I drove past. People devote countless hours to putting helpful value drivers in place for their enterprises. But, there are also unintended negative value drivers that are present for every enterprise. Regardless of whether they are intentional and planned, or unintentional, value drivers are always in place and always working for or against the enterprise.
One of the propositions in the Theory of Value Drivers states that value drivers [are] always in operation. According to the Theory of Value Drivers (Wendee, 2011):
“All value drivers that affect a particular enterprise are at all times operating on the value of the enterprise through the DCF [discounted cash flow] model. If the managers of an enterprise are explicitly considering the effects of a particular value driver on the enterprise’s value, that value driver is operating in the foreground. If the managers of an enterprise do not recognize a particular value driver or are not at the present time considering the effect of a particular value driver on value, that value driver is operating in the background but is still affecting the value of the enterprise, whether recognized or not” (p. 149).
Click here to obtain a copy of the study on value driver theory, A Theory of Value Drivers: A Grounded Theory Study.
While Los Angeles and cities around the world sleep, value drivers are continually in the background working for or against organizations. The key is to understand what value drivers are present and to manage them so that the good value drivers help the organization and the bad value drivers are eliminated or contained.
This is the inaugural posting for the Intrinsic Value Wealth Report. Helping entrepreneurs, business managers, business analysts, securities analysts, and others understand the nature and characteristics of value drivers is a main reason I write this newsletter. Future postings in this newsletter will bring you information and ideas on management, investments, the economy, wealth building strategies, and other topics that you might find interesting. And, of course, I will give you ideas on the creation and recognition of value in enterprises.
Most of the newsletter is free and I hope you enjoy it and can benefit from it. To get access, simply go to the Free Sign-Up section of this website.
Some of the content is provided for a nominal monthly or yearly fee. Paid subscribers get access to specific investment recommendations and have access to all of the paid and free content, except where noted. Hopefully the paid subscription will more than pay for itself in the returns that you achieve by investing in the recommendations. Please click track record to see the excellent investment results provided by my proprietary stock selection model. The paid subscription will be available in the very near future. I will post a notification on the website and notify all free subscribers when the paid subscription becomes available.
You can buy a copy of my paper on value driver theory, A Theory of Value Drivers: A Grounded Theory Study, by clicking here. Your purchase of this paper is greatly appreciated as it will help offset some of the cost of conducting the research on value drivers.
I encourage you to share ideas with me by leaving a reply in the comment box on the Contact Us page of this website. I may not be able to respond to your comments; but please be assured that I appreciate your input greatly.
I am looking forward to sharing ideas with you in the months and years to come.
Dr. Paul M. Wendee, DBA, CFP®, CBI
Wendee, P. M. (2011). A theory of value drivers: A grounded theory study. Phoenix, AZ: University of Phoenix.