Valuation 101 with Aswath Damodaran: Every Number Tells a Story

For investors of any level, getting your head around valuation is one of the most challenging aspects of investing. So to help us build our skills, we’ve turned to one of the world’s best-known experts on valuation, Aswath Damodaran.
Aswath Damodaran is a Professor of Finance at the Stern School of Business at New York University and is known in the finance industry as the “Dean of Valuation”.
In this episode we cover:
- How Aswath introduces students to valuation at NYU
- Key concepts of valuation including: price v value, the four drivers of valuation, and probabilistic margins of safety
- How Aswath advises beginners to approach valuation
- Growth in Big Tech and how Aswath thinks about valuing the Magnificent 7
- How inflation and interest rates can affect valuation
… and so much more

[@realbobbyaxel]

Time Stamps would make a big difference

[@danielteixeira6497]

Bro delivered

[@tomoflaherty3018]

Well done guys! One of the best guests I've seen on an Aus finance podcast 🎉. He also posts all his lectures from NYU on UA-cam

[@dh6097]

Wonderful interview & discussion. Thank you!

[@coreyhahn2887]

Very sound teacher. He speaks like a true investor yet most people can comprehend his points. One of the best people to follow to learn the market imo for retail traders yet teaches people from hedge funds or students soon to be at institutions

[@kaumallose6198]

Great discussion

[@chrisbuckley3403]

Good one lads

[@Kep19901]

I would love to hear aswath's opinion on the etf AVUV and american centruy investments/avantis

[@cocoarecords]

Amazing wow

[@samyueldanyo8679]

I agree with the prof that by adding a margin of safety one might miss undervalued stocks in as much or more occurrences as one would avoid overvalued ones but one should also apply an impact factor on each event.
I.E. for me the impact of buying something overvalued is much greater than missing something undervalued (loosing money vs not making on this particular opportunity) because I do not need to buy every undervalued stock but I want to avoid every overvalued one - in other words I am fine missing most undervalued stock as long as I can buy 5 of them and if I avoid every overvalued one - I will do fine.
That is on top of the notion of the degree of over or undervalued. The more overvalued a stock is a margin of safety is more effective in avoiding it. The more undervalued a stock is - the less probable is the margin of safety would cause one to miss it. Hence the expected return impact is asymmetric.
Thanks for the conversation.

[@frankle246]

WB rule #1: Don't loose money ( either buy bad biz or good biz at too high price)

[@sushil6509]

What is
Is valuation work?

[@Don_Gorgan]

Bought nvidia when it was to be over priced. I thought I might have bought too late..it has gone up 119% since. So, doing okay.

[@svladylen]

To end this story well don't forget to sell till you are up on it

[@ian_pedalz]

What’s your price to sell? At what point do you say, I’ve made enough let me pick another company to invest my money in?

[@heavyduty5125]

@@ian_pedalzBy not fixing a share price target

[@ian_pedalz]

@@heavyduty5125 so your thesis on future price target is based off of? Everyone talks about nvidia like they can do no wrong so I’m just curious.

[@kk22001]

Bunch of jesters talking crap

[@cocoarecords]

Only jester talking crap is you lol

[@kk22001]

@@cocoarecords - Put to action what these jesters mentioned and tell me after that you earn money. I can almost guarantee you eat your words.

[@cocoarecords]

@@kk22001 words are not double cheeseburgers 😉 to be eaten

[@sushil6509]

​@@kk22001Well ig you don't know what ashwath teaches
He does that in a better way what most of the world is doing already before investing