The Intrinsic Value Podcast - The Investor’s Podcast Network
MI377: How Aswath Damodaran Invests Across The Corporate Lifecycle w/ Shawn O’Malley
Nov 11, 2024
Discover how companies age like people and the importance of the corporate life cycle. Learn why the decline phase is often mishandled and what strategies can lead to graceful aging. Explore case studies on Intel, Walgreens, and Starbucks, illustrating their unique challenges. Find out why diversifying across life cycle stages is crucial for investors, and uncover which declining stock a renowned finance professor currently favors. This insightful discussion blends research with actionable advice for savvy investors.
57:56
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Quick takeaways
- Understanding the corporate life cycle phases helps investors identify varied opportunities and risks associated with different company stages.
- Value investors often focus on mature or declining companies for lower prices, which may overlook high-growth potential in younger firms.
Deep dives
Understanding the Corporate Life Cycle
The corporate life cycle consists of six phases: startups, young growth, high growth, mature growth, mature stable, and decline. Each stage reflects different opportunities and challenges for companies, influencing their growth rates and returns. Startups focus on establishing their business model, while mature companies often prioritize profitability and market share protection. Understanding these phases helps investors identify potential risks and returns associated with their investments.
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