Aswath Damodaran Confronts Buffett & Munger On Their Portfolio

Socials

___
DISCLAIMER: It's important to note that I am not a financial adviser and you should do your own research when picking stocks to invest in. These are just some of my viewpoints, by no means would I recommend watching one YouTube video and then immediately buying that stock. This video was made for educational and entertainment purposes only. Consult your financial adviser.

[davidpagan]

Apple is the new GE for our current generation. I think Buffett knows this somewhat and knows that Apple has a long way to go before it loses its dominant position in the market. Apple's gross profit growth started slowing down back in 2015. They can only get but so large but Buffett was buying when the P/E was as low as 11x in 2016 so he's letting it compound as he does with everything else. ~30x earnings for an ex growth company is steep for current investors.

[davidreichert]

"Diworseification" was coined by Peter Lynch

[henrus]

And several months after Charlie passed, Berkshire sold a big chunk of their AAPL stock

[kaustavpal]

Damodaron was dead right in hindsight, now that they have started unwinding their position. They couldn't accept their mistake on an open forum and run down the price

[jsauerfinancial]

I think Damodaran is right, not because Apple is too big a position, but because Apple is an extremely expensive (PE of 30), consumer technology business. Consumer tech businesses do not remain dominant forever, just look at Nokia, GoPro, Blackberry, Xerox, Polaroid, Etc

[arvindsharma]

And now Berkshire sold a sizable chunk of apple stock…. Damodatan rocks

[filipepina]

they are different investment philosophies, I like both. Aplle will never be a ten bagger at this point, but it's a worthwhile investment. Both are right in their way of seeing investments in stocks

[vitawater]

Enron and worldcom cured me of holding individual holdings

[davidmercado]

WARREN BUFFETT: The most important thing in investments is not having a high IQ, thank God.
I mean, the important thing is realism and discipline. And you don’t need to be extraordinarily bright to do well in investments, if you are realistic and disciplined.

[videoicon]

Munger doubled down on Alibaba then gave it up. He can afford it, not everyone else.

[obstruktion]

well it was still huge and he ended up selling most of it now.

[annasillanpaa]

I think WB's comment was good. It actually proved that Aswath's point was accurate, he just did not know that BH owns other investments also. Let's also not forget that we don't know what Aswath exactly has said. This was someone relaying that. In my view, CM lashed out and seems he did not know how big part Apple was of BH's portfolio.

[Zizook]

Diversification is bad if you really know what your doing. When you know what your doing, you realize very quickly, there are not that many opportunities at fantastic prices to take advantage of at one time. This reality is even more true when you start to manage a ton of money.

[davidmercado]

Damodaran make me want to watch Berkshire Hathaway anual meeting recording twice to avoid contamination with his ego

[outsider]

You are wrong because they did sell big chunks of AAPL regardless. Aswath has the last laugh....

[craig.]

You don't usually just buy such a large chunk, hopefully you bought the right company well and good things came of it. Hence it's rise to be a large part of your PF/. But thereafter you need watch it because if it turns on you it will take a very large chunk of your PF's value out the door. But while the story holds up and the company is good to own you just let that thing keep running, especially if your other optional choices aren't comparatively as good.

[ryantan]

Munger criticises Damodaran for not acknowledging the limits of his ability. Has Munger ever considered that he himself might be the one who is overconfident? Munger thinks that Berkshire Hathaway has generated positive alpha and so he and his team are skilled. The reality is that Berkshire Hathaway has not generated statically significant alpha. Ben Felix summarises this well on his video entitled "Advice From Warren Buffett".

Munger is blind to the fact that he can't know everything about a company even if he thinks he does. For example, management may have engaged in fraud which by definition, Munger won't know about.

[SystemWealth-ggpq]

Professor Damodaran is for me he guides me toward value investing, savior for the dumb ass like me. Mr. Munger(R.I.P) is the guru of the actual practice. I think it is natural they don't agree each other.

It is now great time for dumb ass like me I can listen to them.

[JohnPong-lyzg]

munger is right in my opinion, I never went to school for investing but have been doing investing close to a decade... ive only found 5 companies fml

[vidya]

If Gni = 40%, ROIC =15, and let's say PEfair = 15, you buy at P/E 27.5, let's say Gic = 10%, after one year growing, ROIC rises to 19.09, the effect P/E dropped to 19.64, nearer to P/Efair 15. After 2nd year, ROIC rose to 29.30, effective P/E dropped to 14.03, below old PEfair 15. Roic rising, will drive and renew old P/Efair 15 to become PE 29.30.