Kelley grad’s book ranks no. 1 valuation manual worldwide

Joshua Pearl can be considered an accomplished investment banker and author — and he hasn’t even hit the big 3-0.

Pearl, an IU alumnus, graduated from the Kelley School of  Business in May 2003. He and co-author Joshua Rosenbaum wrote “Investment Banking: Valuation, Leveraged Buyouts, and Mergers and Acquisitions” in May 2009.

It’s currently the No. 1 book sold on Amazon.com in the Consolidation & Merger category.

The idea for the book, however, has been on Pearl’s mind since he was an undergraduate.

“It took five years to write. I started the draft of the general outline of the text when I was still on campus. As a senior, I was thinking, ‘You know what? This book really doesn’t exist, and all the books out there are predominantly written by financial professors.’”

Pearl decided to take the next step and put his thoughts into action.

“These books weren’t really applicable to how valuation analysis is actually performed on Wall Street. So I figured, I’m going to write the book I wish had existed when I was trying to break into Wall Street. My co-author and I worked with over 100 individuals to complete the book, including some of the top financiers and finance professors in the world.”

He said his primary reason for writing this book was to the fill the void he saw in the textbooks he was using in his classes.

“If you look at all the corporate finance books that come to market, they’re generally grounded in finance theory. My co-author and I wrote the real-world guide.”

And in Rosenbaum, he found the exact co-author he was looking for. Because he was only 22 years old at the time of the book’s inception, Pearl said he wanted someone with more experience. 

That initial conversation led to a five-year process of working a full-time job and trying to write the guide to valuation on the side.

The book, published in May 2009, has since sold more than 20,000 copies. Amazon ranks it No. 1, and it’s also the No. 1 valuation book in the world.

Pearl said it is used in about 50 business schools.

“The book required a tremendous amount of hard work, and there were many times during the writing process when we thought to ourselves, ‘Is the book going to take off? Is it worth all of the effort?’ But it definitely was. My co-author and I have met so many students who have benefitted from our book — those interested in investment banking, general finance and accounting. In addition, we’ve met a lot of interesting people — there’s a small fraternity of finance authors,” Pearl said.

Senior and Kelley student Dan Swihart is part of the two-year Investment Banking Workshop of which Pearl was also a member.

“I think (the book) is really helpful. Classes here at IU can sometimes get a little academic in their approaches, and I think it’s a practical textbook of how things are actually done once you get on the job,” Swihart said.

Swihart will be joining Goldman Sachs & Co. when he graduates this May.

David Haeberle, a professor in Kelley who teaches the workshop, also taught Pearl from 2002-03 and remains in contact with him.

“Josh has had a successful and colorful career as an investment banker since he left college. He actually started talking to me about this book when he was still an associate at Deutsche Bank, and it was kind of interesting that a guy that young got hooked up with the other author and started to write the textbook,” Haeberle said.
Haeberle reviewed several chapters of the book.

As soon as the book was published, Haeberle started assigning it to his investment banking classes: F428: Investment Banking I, F429: Investment Banking II and F390: Excellence in Investment Banking Seminar.

The reason Haeberle said he started using Pearl’s textbook is exactly the reason Pearl was motivated to write it in the first place — most textbooks on finance are written by academics who understand the theory not the practice.

“Josh understands the practice, and that’s what my students need before they start work at the firms. So it’s purely a practitioner’s approach instead of an academic’s approach.”

In the next couple of years, Pearl said he plans to write a second edition of the book.

“The core valuation techniques that we discuss in the book are pretty much timeless, but it’s standard that after a few years of strong sales you want to get a revised version underway.”