TIP577: VALUATION MASTERCLASS

W/ ASWATH DAMODARAN

14 September 2023

On today’s episode, Clay Finck 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.

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IN THIS EPISODE, YOU’LL LEARN:

  • Whether recent technological advances should lead us to think about investing. differently than in years past.
  • The role intangible assets play into valuation.
  • How he determines which companies he wants to dive in and research.
  • How Aswath thinks about setting an appropriate discount rate in valuation.
  • His thoughts on whether investors should deem the US treasury rate as the risk free rate available to investors.
  • The future expected return of the S&P 500 implied by the market as of August 2023.
  • How Aswath thinks about the risks of investing in China.
  • Aswath’s updated views on the valuation of Nvidia & Meta.
  • The potential dangers of a buy and hold approach.
  • How to think about using adjusted EBITDA in stock analysis.
  • How Aswath thinks of the macro.
  • Why Aswath recommends a strong understanding of statistics to invest well.

TRANSCRIPT

Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

[00:00:00] Clay Finck: On today’s show. I’m joined by Aswath Damodaran, who’s commonly referred to as the dean of valuation. Aswath is a professor teaching corporate finance and valuation at NYU and has taught countless students how to appropriately value companies of all shapes and sizes. He’s written numerous books on valuation, including The Little Book of Valuation, The Dark Side of Valuation, and Narrative and Numbers.

[00:00:22] Clay Finck: And he’s also made all of his university courses available online for free. Aswath is one of the clearest thinkers when it comes to finance and investing. In this episode, we cover whether recent technological advances should lead us to think about investing differently than in years past, how he thinks about setting an appropriate discount rate His thoughts on whether investors should deem the U. S treasury rate as the risk free rate, the future expected return of the S&P500 implied by the market as of August 2023, Aswath’s updated views on the valuations of Nvidia and Meta, the potential dangers of a buy and hold approach, how Aswath thinks about the macro environment, and much more. With that, here is my conversation with Aswath Damodaran.

[00:01:09] Intro: You are listening to The Investors Podcast, where we study the financial markets and read the books that influence self-made billionaires the most. We keep you informed and prepared for the unexpected.

[00:01:29] Clay Finck: Welcome to The Investors Podcast. I’m your host, Clay Finck. And today I’m absolutely thrilled to be joined by Aswath Damodaran. Aswath, thank you so much for sharing your time with us today. 

[00:01:39] Aswath Damodaran: You’re welcome. Thank you for having me.

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