We Study Billionaires - The Investor’s Podcast Network TIP654: Investing Across the Life Cycle w/ Aswath Damodaran
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Aug 23, 2024 
Aswath Damodaran, a distinguished NYU professor known for his expertise in corporate finance and valuation, dives into the corporate life cycle. He highlights the need for value investors to adapt their strategies based on a company's life stage, comparing corporate evolution to human aging. Insights into Tesla's changing narrative emphasize the difference between valuation and market sentiment. Damodaran also discusses the importance of management skills evolving with the business lifecycle and encourages embracing creative destruction for long-term success.
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Corporate Life Cycle
- Companies, like humans, experience a life cycle with distinct stages.
- Each stage presents unique benefits, costs, and challenges, mirroring human aging.
Valuation Across the Life Cycle
- Adapt your valuation approach based on the company's life cycle stage.
- Use storytelling for young companies with limited data; numerical analysis for mature firms.
Open-Minded Value Investing
- Value investors should consider companies at all life cycle stages.
- Focusing solely on mature companies may cause you to miss high-growth opportunities.
