We Study Billionaires - The Investor’s Podcast Network

RWH005: Meet the Master w/ Aswath Damodaran

Apr 26, 2022

Aswath Damodaran, a finance professor at NYU and valuation expert, shares unique insights on investment philosophy. He discusses the value of 'day-dreaming' for creativity and the advantage of a generalist approach. Skeptical of the ESG movement and cryptocurrencies, he emphasizes traditional investment principles and urges diversification. His reflections on selling Amazon and Tesla while investing in Apple paint a vivid picture of his strategic mindset. With wisdom from 42 years of teaching, Damodaran highlights the importance of humility and flexibility in navigating complex investment landscapes.

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ADVICE

Daydreaming Time

Schedule "daydreaming time" into your day.
This allows your mind to wander and explore new possibilities, leading to different perspectives.

INSIGHT

Reasoning in a Google World

In a Google search world, finding answers is easy, but reasoning through questions yourself is crucial.
Reasoning refines your thinking process and helps develop your own point of view.

ANECDOTE

The Advantage of Being a Dabbler

Aswath Damodaran embraces being a generalist or dabbler in a specialized world.
He believes this broad perspective is advantageous for teaching and provides unique insights.

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Investment Fables

Aswath Damodaran

In 'Investment Fables', Aswath Damodaran analyzes 13 widely touted investment strategies, examining their theoretical roots, evidence, and practical implications. The book offers powerful lessons for investors by exposing the myths and realities behind these strategies, helping readers make more informed investment choices.

Richer, Wiser, Happier

How the World's Greatest Investors Win in Markets and Life

William Green

In Richer, Wiser, Happier, William Green draws on interviews conducted over twenty-five years with many of the world’s greatest investors. The book highlights that the most successful investors are mavericks and iconoclasts who question conventional wisdom and think rationally, rigorously, and objectively. They maximize their odds of long-term success in markets and life by drawing insights from diverse fields such as neuroscience, economic history, psychology, philosophy, and more. Green explains how these investors can teach us not only how to become rich but also how to improve our thinking, decision-making, risk assessment, and resilience, and how to turn uncertainty to our advantage.

The little book of valuation

Aswath Damodaran

Damodaran on Valuation

Security Analysis for Investment and Corporate Finance

Aswath Damodaran

This book is a thorough guide to valuation, covering the fundamentals of intrinsic valuation, relative valuation, and option pricing. It delves into various valuation models, including the discounted cash flow (DCF) model, and discusses the importance of understanding the context and assumptions behind each model. Damodaran emphasizes the need for a combination of numerical analysis and narrative storytelling in valuation and addresses the practical application of valuation in different scenarios, such as valuing equities, bonds, real estate, and entire businesses. The book also explores the impact of technological disruption, changing business models, and geopolitical shifts on valuation and encourages adaptability in valuation approaches[3][4][5].