Unlocking the Secrets of Valuation in This Masterclass w/ Aswath Damodaran (TIP577)

Clay is joined by Aswath Damodaran who is widely referred to as the dean of valuation. 

Aswath Damodaran is a professor at NYU of corporate finance and valuation and has taught thousands of students how to value companies and pick stocks.  He has written numerous books on valuation and has also made all of his university courses available online for free. Aswath is one of the clearest teachers of finance and investing in the industry.

▶️ RELATED EPISODES:

IN THIS EPISODE, YOU’LL LEARN:
0:00:00 - Intro
0:00:50 - Whether recent technological advances should lead us to think about investing differently than in years past.
0:02:44 - The role intangible assets play into valuation.
0:06:37 - How he determines which companies he wants to dive in and research.
0:15:14 - How Aswath thinks about setting an appropriate discount rate in valuation.
0:17:30 - His thoughts on whether investors should deem the US treasury rate as the risk free rate available to investors.
0:21:14 - The future expected return of the S&P 500 implied by the market as of August 2023.
0:25:15 - How Aswath thinks about the risks of investing in China.
0:28:50 - Aswath’s updated views on the valuation of Nvidia & Meta.
0:39:49 - The potential dangers of a buy and hold approach.
0:43:52 - How to think about using adjusted EBITDA in stock analysis.
0:46:18 - How Aswath thinks of the macro.
0:55:47 - Why Aswath recommends a strong understanding of statistics to invest well.

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On We Study Billionaires, we interview and study famous financial billionaires including Warren Buffett, Bill Gates, and Ray Dalio. We teach you what we learn and how you can apply their investment strategies in the stock market.

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[manflynil]

Here's a man who meditates on his and others' thought processes. He is obviously very clear and wise in his approach and accountable for himself and to himself.

[herokorai]

Aswath is a generous giver (of knowledge) and rationale person. He is like Buffet and Munger in those attributes yet different in investing views.

[alverzenongkhlaw]

Sir Aswath you make india proud...Thank you so much for teaching us even though we're still trying to understand all these confusing terms.

[magicbus]

Another great interview Clay. This guy is at the top of the class when it comes to investing. Great questions and answers as well. Appreciate Aswath's honesty and transparency when it comes to answering the questions. Thanks.

[dncrnbc]

I must listen to Aswath’s public speech, interview and class like this

[larrygerry]

Problem us retail have is that we have no patience.

[CP-woou]

Loved it. Thanks Clay and Prof. Aswath!!! Very informative and thought provoking.

[whqxpjs]

Love Aswath Damodaran, honest no BS approach 🙌 🙌

[throwawayanon]

Any recommendations on books related to statistics Aswath talks about towards the end?

[brianbirnbaum]

Listening again and have more thoughts. Still in the first few minutes.

While I agree that every generation naturally feels at the avant garde, market multiples and valuation metrics have changed drastically. Intangible assets have been a big factor in that change.

So I do think that it is a little different. A 20PE looks more like a 10PE for asset-lite companies.

[karlroth]

Choose a growth stock. Watch it go through an up and down cycle… it’s trading range of price is key. Then understand how that company is effected by the current market.

[probalghosh]

as usual he is brilliant .... amazing interview

[brianbirnbaum]

This is a fantastic interview.

Had to add that Aswath understands the basics of market psychology. It’s somewhat different than how I see the market but I see some of the advantages now.

[andrespenaranda]

Higher likelihood of getting through the whole episode if you guys add time stamps/divisions.

[ishanmartins]

Prof.. what about the circle of competence. If I don't understand it, How will I know the right price???

[mariussavatier]

Um, in the very abstract two-period model, p = E[e*u_1'/u_0']; therefore, depending on the utility function, the distribution of income in future states can influence the stochastic discount factor. In other words, it is the volatility (or other moments) of equities that theoretically creates the risk premium. So, if volatility increases while the expected return remains the same, the discount factor should increase and the price decrease. So I don't understand his point! Of course the discount rate should increase with uncertainty.

[davidm]

Great interview as always with professor Damodaran. Usually he's not solemn and serious as in this interview. Maybe he was not in a great mood.

[CW-nkvd]

Dr. Damodaran, What is your opinion of the value of investing in Disney? And what is your opinion of Netflix? Do you consider Netflix to be overvalued or undervalued or worthy of investing consideration?

[GymForLifeHD]

meta was easeast profit ever took the bottom and sell in 9 months with 200%+