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TVS 040 – Aswath Damodaran (NYU Finance Valuation Expert)

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TVS 040 – Aswath Damodaran (NYU Finance Valuation Expert)

Wow, I had to bring on an incredibly special guest for the 40th episode of The Vampire Squid! Today's episode, we have Aswath Damodaran, who I'm sure many of you know well in finan ...

Wow, I had to bring on an incredibly special guest for the 40th episode of The Vampire Squid! Today’s episode, we have Aswath Damodaran, who I’m sure many of you know well in finance. He is considered the go-to expert for valuation and has taught at NYU for over 30 years. His blogs Musings on Markets is well recognized among all those who work in finance, and I’m thrilled that he was willing to appear on TVS. This episode is JAM PACKED with views that challenged many of my prior beliefs in finance. I hope you all enjoy…

  1. What is your background and how did you initially get interested in finance?
    1. Sex, Stock, and Salvation
    2. The study of money
  2. What are the biggest misconceptions of finance for those who haven’t learned it before?
    1. Everything is about finance (i.e. Superbowl, World Cup, and Lady Gaga)
    2. The louder it talks, the more it changes the game
  3. Is there anything out there that isn’t driven by finance?
    1. There’s some things driven by altruism, but most in money and finance
  4. Given the negative perception of finance, how do you help bridge that gap?
    1. Not my job
    2. People don’t like bankers, lawyers, athletes, who do people even like these days?
  5. How have your goals changed since the beginning of teaching to now?
    1. I don’t have any goals except to teach
    2. Life is incremental, it adds up and I live life semester to semester
    3. You don’t need big goals to succeed, small things today will take care of big things later
    4. My job is learning, and learning never ends
  6. Is valuation an art or a science? 
    1. Neither, it’s a craft
    2. People who say it’s an art want a license to teach anything they want
    3. People who say it’s a science just want to use formulas
  7. What do you think about market valuations vs. fair value?
    1. Markets don’t value companies, they price them
    2. To invest you need faith
    3. Most investors are not investors, they are traders (even a lot of Portfolio Managers)
  8. The Stock market can be irrational longer than you can be solvent
  9. Which investors do you admire?
    1.  Bill Ackman, Carl Icahn, Warren Buffet all have qualities that I like, but they also have faults
    2. Buying a “How to invest like Warren Buffet” book is a waste of time, figure out your strengths
  10. What faults do you see in Warren Buffet?
    1. He can be hypocritical when he speaks about corporate governance
    2. He is very consistent and knows his strengths and weaknesses

As always, please let me know if you have any questions, comments, or suggestions. Email me directly at alan@the vampiresquid.com or on the contact form. Also, please subscribe to my facebook page for live updates facebook.com/thevampiresquid. Also follow me on Quora at https://www.quora.com/profile/Alan-Li-1. To support us check us out at Patreon https://www.patreon.com/thevampiresquid

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