Bogleheads On Investing Podcast

Episode 77: Aswath Damodaran, the Dean of Equity Valuation from the Stern School of Business, host Rick Ferri

Dec 19, 2024
Aswath Damodaran, a renowned Professor of Finance at NYU's Stern School of Business, shares his insights on corporate finance and equity valuation. He discusses the nuances of investment philosophies and the importance of recognizing personal strengths. The conversation delves into the equity risk premium, contrasting various global markets, and the complexities of factor investing. Damodaran also critiques indexing strategies while highlighting AI's transformative role in finance, urging investors to adapt their skills in a rapidly evolving landscape.
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ANECDOTE

Moment of Grace to Teaching

  • Aswath Damodaran realized he wanted to be a teacher 15 minutes into a TA job during his MBA.
  • He pursued a PhD to teach corporate finance and valuation, describing research as a means to an end.
INSIGHT

Investment Philosophies vs Strategies

  • Investment philosophies come from beliefs about market inefficiencies while strategies exploit those beliefs.
  • No one investment philosophy fits all; the right one aligns with your personal makeup and goals.
INSIGHT

Corporate Life Cycles and Investing

  • Companies age like humans and their investment behavior changes with lifecycle stages.
  • Value investing favors mature companies but risks missing high-growth firms crucial for portfolio growth.
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