Session 18: Money Ball and Analyzing Multiples

In this quiz shortened session, we continued our discussion of PE ratios by looking at the distributional characteristics of PE ratios as well as the drivers of PE, arguing that its determinants are growth, risk and payout/ROE. A cheap stock is one with a low PE, high growth, low risk and a high ROE and that becomes the foundation for screening for cheap stocks. If you want to read up more on screening, try this blog post:

[fungunsun]

Hello, mr Damodaran. I am big fan of your books and your channel! I think you do a very good job of teaching public on valuation and corporate finance. Would you consider valuing Tesla, Inc after its earnings announcement. I see a lot of conflictiing reports on why it is under overvalued or a goof long-term investment and despite so much people thinking its overvalued the stock continues to go up. I would love to hear your expert opinion on this subject matter!