Stephen R. Foerster

Trailblazers, Heroes, and Crooks

Andrew W. Lo and Stephen R. Foerster

In Pursuit of the Perfect Portfolio

How the greatest thinkers in finance changed the field and how their wisdom can help investors today.  Silver medal winner, Axiom Business Awards, Personal Finance.

Is there an ideal portfolio of investment assets, one that perfectly balances risk and reward? In Pursuit of the Perfect Portfolio examines this question by profiling and interviewing ten of the most prominent figures in the finance world―Jack Bogle, Charley Ellis, Gene Fama, Marty Leibowitz, Harry Markowitz, Bob Merton, Myron Scholes, Bill Sharpe, Bob Shiller, and Jeremy Siegel. We learn about the personal and intellectual journeys of these luminaries―which include six Nobel Laureates and a trailblazer in mutual funds―and their most innovative contributions. In the process, we come to understand how the science of modern investing came to be. Each of these finance greats discusses their idea of a perfect portfolio, offering invaluable insights to today’s investors.

Inspiring such monikers as the Bond Guru, Wall Street’s Wisest Man, and the Wizard of Wharton, these pioneers of investment management provide candid perspectives, both expected and surprising, on a vast array of investment topics―effective diversification, passive versus active investment, security selection and market timing, foreign versus domestic investments, derivative securities, nontraditional assets, irrational investing, and so much more. While the perfect portfolio is ultimately a moving target based on individual age and stage in life, market conditions, and short- and long-term goals, the fundamental principles for success remain constant.

Aimed at novice and professional investors alike, In Pursuit of the Perfect Portfolio is a compendium of financial wisdom that no market enthusiast will want to be without.

Click here for more on the dedicated Perfect Portfolio book site.

This 2025 edition of Fundamentals of Finance: Concepts and Applications offers a practical and engaging introduction to finance and financial management for today’s learners. Designed for business students, professionals, and anyone looking to understand the fundamentals of financial analysis and decision-making, this book integrates essential models and theories with real-world applications to make financial concepts easy to understand.

The book covers key concepts and tools, including financial statements and ratio analysis, time value of money, capital budgeting and investment decisions, financing and payout decisions, capital structure, cost of capital, valuation, and more. Readers will find recent real-world data, examples, and case studies—including insights from companies like Home Depot, NVIDIA, and Walmart—emphasizing the applications of tools and concepts to real business choices.

Key features include:

• Concepts + applications: All financial concepts and tools introduced are complemented with real-world data and comprehensive cases so readers see concepts at work.
• Unified framework: The book’s unique and intuitive Financial Management Framework anchors every chapter, showing how operating, investing, and financing choices drive growth, risk, and ultimately value.

Whether you’re preparing for a career in business, refreshing your financial knowledge, or teaching finance to a new generation, this book provides a strong, applied foundation in financial management.

What you’ll learn: The book is structured in four parts, with chapters in each part that dive deeper into key concepts.
Part 1. Assessing and Managing Performance

• Overview of financial management, the cash-flow cycle, and the role of finance in value creation.
• Reading financial statements, ratio analysis, and working-capital management with day-to-day cash-flow tactics.

Part 2. Assessing Future Financial Needs

• Building pro forma income statements, balance sheets, and cash budgets.
• Time-value-of-money fundamentals applied to bonds, preferred shares, and equity valuation.
• Capital-budgeting techniques (NPV, IRR, real options) and growth-planning tools like sustainable-growth analysis.

Part 3.  Financing Long-Term Needs

• Capital-markets introduction—from venture capital to seasoned debt and equity.
• Measuring the cost of capital and hurdle rates.
• Financing and dividend payout decisions, and designing an optimal capital structure.

Part 4. Measuring and Creating Value

• Firm valuation using discounted-cash-flow (DCF) and relative valuation (P/E, EV/EBITDA) explained step by step.
• Comprehensive Walmart case integrates every tool in the book—from size-up to valuation—in a practical application.

This book is ideal for:

• Undergraduate, MBA, MSc, and executive-education students and courses requiring a concise yet comprehensive finance core text.
• Finance professionals seeking a modern refresher that bridges theory and current practice with real-world applications.
• Non-financial managers, executives and entrepreneurs who need a one-stop, application-oriented introduction to the fundamentals of finance.