Excess Returns

Value Investing in a Changing World with Aswath Damodaran

33 snips
Aug 29, 2024
Guest
Aswath Damodaran
Aswath Damodaran, an NYU professor renowned for his expertise in corporate finance and valuation, shares insights on the corporate life cycle and investment strategies. He highlights how aging companies struggle to evolve and the critical role of storytelling in valuation. Aswath critiques rigid value investing, discusses the implications of AI on investment strategies, and emphasizes the importance of wealth preservation over chasing high returns. This conversation blends academic rigor with practical advice, making it indispensable for all investors.
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ANECDOTE

Walmart's Facelift

  • Walmart, a middle-aged company, bought Flipkart for $21 billion to appear younger.
  • This expensive facelift didn't work, highlighting how companies, like people, fight aging.
INSIGHT

The Paradox of Valuation

  • Access to data and powerful tools has increased, but valuations have become worse.
  • This paradox arises from forgetting that every valuation tells a story, not just financial modeling.
INSIGHT

Building vs. Ideas

  • Building a business model is an underrated skill, distinct from having great ideas.
  • The ideal CEO profile changes throughout a company's lifecycle, contrary to popular belief.
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