Skip to content
Sign in
Artwork for Aswath Damodaran
BusinessEntrepreneurshipEducation

Aswath Damodaran

Aswath Damodaran

I teach corporate finance, valuation and investment philosophies at the Stern School of Business at New York University. I have online versions of all three courses here, as well as other finance-related videos.
1. The Corporate Finance Online playlist has an introductory video and 36 sessions that cover all of corporate finance (at least as I see it).
2. The Valuation playlist has 25 sessions that cover valuation approaches, issues and questions.
3. The Investment Philosophies playlist has sessions that cover different investment philosophies.
4. The Accounting and Statistics playlists reflect my quirky and unorthodox introductions to two disciplines that are critical to my valuation and corporate finance classes.
5. The Blog Posts playlist has sessions that go wit my blog posts and reflect my standing as a dabbler, rather than expert, in all things finance-related.
If you need the supporting material for any of the classes, check the links below.

Links:
Corporate finance materials: http://www.stern.nyu.edu/~adamodar/New_Home_Page/corpfin.html
Valuation materials: http://www.stern.nyu.edu/~adamodar/New_Home_Page/equity.html
Investment Philosophies: http://www.stern.nyu.edu/~adamodar/New_Home_Page/invphil.htm
Books: http://www.stern.nyu.edu/~adamodar/New_Home_Page/public.htm
My website: http://www.damodaran.com

Play
Open in
  • 80 episodes
  • daily
  • Avg 43 min
  • English

Episodes 80

NewestOldestLongest
All20Unplayed20In progress0Played0
Counted on this page — what you have heard stays on this device, so it is not something the list can be paged by.
  • Yesterday · 52 min

    AI Winners, Losers and Wannabes: Valuing AI's Boost to NVIDIA's Value!

    It is undeniable that AI has boosted stock prices across the board, and specifically so for companies that are core beneficiaries. I look at one of the perceived winners, NVIDIA, to estimate the AI effect on value, and whether the market price has overshot the mark. To set up the story and valuation of the company, I start by looking at both the semiconductor business over time and NVIDIA place in that business. NVIDIA has been able to post high growth in a maturing business by being in the right place at the right time - gaming, crypto and now AI, and my story/valuation of the company is built on the presumption that it will continue to be an opportunistic growth company, that deliver premium operating margins. Notwithstanding the optimistic tilt, I find the company over valued, though it is possible to map out pathways to get to a trillion dollar value. Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/blog/NVIDIA2023.pdf Valuation: https://pages.stern.nyu.edu/~adamodar/pc/blog/NVIDIA2023.xlsx Learn more about your ad choices. Visit megaphone.fm/adchoices

  • Yesterday · 1 hr 24 min

    Session 5: Implied Equity Risk Premium (audio fixed)

    I had posted the video for this session a day ago (Sept 21) but the audio was missing from the last 20 minutes. Since I could not recover that audio, I shot an add-one webcast to cover that material and added it to the first hour of the actual class. You will notice when the transition happens. In this session, we started by looking at the implied equity risk premium as of September 21 and I am attaching the implied premium spreadsheet for you to experiment with. After a brief foray into lambda, a more composite way of measuring country risk, we spent the rest of the session talking about the dynamics of implied equity risk premiums and what makes them go up, down or stay unchanged. We then moved to cross market comparisons, first by comparing the ERP to bond default spreads, then bringing in real estate risk premiums and then extending the concept to comparing ERPs across countries. Finally, I made the argument that you should not stray too far from the current implied premium, when valuing individual companies, because doing so will make your end valuation a function of what you think about the market and the company. If you have strong views on the market being over valued or under valued, it is best to separate it from your company valuation. Start of the class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/ERPtest2016.xls Slides: http://www.stern.nyu.edu/~adamodar/podcasts/valfall16/valsession5.pdf Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session5test.pdf Post class test solution: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session5soln.pdf Learn more about your ad choices. Visit megaphone.fm/adchoices

  • Yesterday · 29 min

    Investor Resilience or In Denial: A Look Back at the First Half of 2023

    At the start the 2023, the conventional wisdom was that 2023 would be trying year for stocks and bonds, not only because both asset classes were coming off a terrible year in 2022, but also because inflation looked untamable and the economy seemed to be headed into a recession. It should come as no surprise that markets surprised investors on almost every front: stocks surged in 2023, interest rates leveled off and the economy held its own. In this session, I take stock at the half-way point of the year to look at how stock returns varied across regions, sectors and stock classes and note that almost all of the rise in markets has come from large cap, money-making companies, with the tech giants leading the way. I also look at what the rest of the year looks likely to deliver, providing tentative (sorry, but my macro forecasting skills are lousy) views on inflation and the economy, and a measure of the intrinsic value of the S&P 500 on July 1, 2023. (No suspense: Given earnings forecasts for the index and current interest rates, stocks are close to fairly priced). If you have trouble downloading the files linked below, try a different browser. Blog Post: https://aswathdamodaran.blogspot.com/2023/07/market-resilience-or-investors-in.html Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/blog/Midyear2023.pdf Valuation Spreadsheet for valuing the S&P 500: https://pages.stern.nyu.edu/~adamodar/pc/blog/S&P500ValueJuly2023.xlsx Learn more about your ad choices. Visit megaphone.fm/adchoices

  • Yesterday · 1 hr 34 min

    Session 5: Implied Equity Risk Premiums

    In this session, we started by looking at the implied equity risk premium as of September 21 and I am attaching the implied premium spreadsheet for you to experiment with. After a brief foray into lambda, a more composite way of measuring country risk, we spent the rest of the session talking about the dynamics of implied equity risk premiums and what makes them go up, down or stay unchanged. We then moved to cross market comparisons, first by comparing the ERP to bond default spreads, then bringing in real estate risk premiums and then extending the concept to comparing ERPs across countries. Finally, I made the argument that you should not stray too far from the current implied premium, when valuing individual companies, because doing so will make your end valuation a function of what you think about the market and the company. If you have strong views on the market being over valued or under valued, it is best to separate it from your company valuation. Start of the class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/ERPtest2016.xls Slides: http://www.stern.nyu.edu/~adamodar/podcasts/valfall16/valsession5.pdf Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session5test.pdf Post class test solution: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session5soln.pdf Learn more about your ad choices. Visit megaphone.fm/adchoices

  • Wednesday · 38 min

    Country Risk: A 2023 Mid-year Update

    The question of how and why business and investing risk varies across countries is one that has be answered, if you are either a business making investments across the world or an investor valuing a company with operations in many countries. In this session, I review the findings from my annual update on country risk (a long and boring 100+ page paper), starting with an examination of differences on the fundamentals (political structure, exposure to violence, extent of corruption and strength of legal system) across the globe. I then look at measures of country risk, starting with default risk (in sovereign ratings and CDS spreads), moving on to country risk scores and finally to equity risk premiums. I end the post by connecting these country risk premiums to company hurdle rates, examining both why your currency choice changes your numbers but not your value judgment and how to measure company exposure to country risk. (If you have trouble with downloads, try a different browser.) Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/blog/CountryRisk2023.pdf Post: https://aswathdamodaran.blogspot.com/2023/07/country-risk-july-2023-update.html Paper on Country Risk: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4509578 Equity Risk Premiums, by country: https://pages.stern.nyu.edu/~adamodar/pc/datasets/ctrypremJuly23.xlsx Learn more about your ad choices. Visit megaphone.fm/adchoices

  • Wednesday · 49 min

    The Price of Risk: With Equity Risk Premiums, Caveat Emptor!

    The equity risk premium (ERP) is the price of risk in the equity market, set by demand and supply, but determined by economic and market fundamentals. In this session, I look at why the ERP is embedded in almost every investment decision, as an input, and why its level should matter to investors. I look at different approaches to estimating it, from looking at the past (historical returns) to using shortcuts (the earnings yield) to backing out the premium for stock pricing, and why they yield divergent estimates for the ERP, and how to reconcile them. Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/blog/PriceofRisk2023.pdf Blog Post: Learn more about your ad choices. Visit megaphone.fm/adchoices

  • Wednesday · 1 hr 34 min

    Session 4: More on risk free rates and first steps on equity risk premiums

    In this session, we started by continuing the risk free rate discussion, establishing why risk free rates vary across currencies and what to do (or not do) when risk free rates are very low or even negative. We started the discussion of equity risk premiums by looking at the flaws in historical risk premiums and how best to estimate country risk premiums and ended the class with an assessment of how to measure a company's exposure to country risk. Start of the class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/risktest.pdf Slides: http://www.stern.nyu.edu/~adamodar/podcasts/valfall16/valsession4.pdf Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session4test.pdf Post class test solution: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session4soln.pdf ERP by country: http://www.stern.nyu.edu/~adamodar/pc/datasets/ctrypremJuly16.xls Learn more about your ad choices. Visit megaphone.fm/adchoices

  • Tuesday · 37 min

    In Search of Safe Havens: The Trust Deficit and Risk-free Investments!

    Every introductory finance class starts by introducing a "risk-free" investment, and the return on that investment becomes an ingredient in almost every aspect of corporate finance and investing. The standard practice for estimating this rate is to use the rate on a government bond, but that presumes that governments, because of their control of money printing, never default. The recent downgrade of the US, by Fitch, from AAA to AA+, challenges that notion, and in this session, I argue that default risk is a clear and present danger even when governments borrow in the local currency, and that when it exist, getting to a risk-free rate becomes messier, and there can be consequences for risk premiums. Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/blog/Riskfree2023.psd Blog Post: https://aswathdamodaran.blogspot.com/2023/08/in-search-of-safe-havens-trust-deficit.html Learn more about your ad choices. Visit megaphone.fm/adchoices

  • Tuesday · 1 hr 34 min

    Session 3: The Building Blocks for Intrinsic Value and Risk Free Rates

    This session started with a look at a major investment banking valuation of a target company in an acquisition and why having a big name on a valuation does not always mean that a valuation follows first principles. After setting the table for the key inputs that drive value - cash flows, growth, risk, we looked at the process for estimating the cost of equity in a valuation. The key concept is that of a "marginal" investor, who is diversified and looking at risk through that investor's eyes. We spent the rest of the session talking about what should be (but no longer is) the simplest input into the process: the risk free rate. Start of the class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/kennecott.pdf Slides: http://www.stern.nyu.edu/~adamodar/podcasts/valfall16/valsession3.pdf Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session3test.pdf Post class test solution: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session3soln.pdf Learn more about your ad choices. Visit megaphone.fm/adchoices

  • Tuesday · 39 min

    Toys for Billionaires: Sports Franchises as Trophy Assets

    In the last year or two, we have seen a wave a stories about sports with mind-boggling numbers, from Al Hilal's attempt to sign Mbappe for $ 1 billion for a one-year contract to the sale of the Washington Commanders, an NFL team, for $ 6 billion. As we all try to explain these numbers with fundamentals, it is worth noting that professional sports franchises have increasingly become trophy assets for billionaires looking for toys. In this session, I build a case for this thesis by first noting the rise in pricing of sports franchises, both in transaction and prices, and then showing that the pricing rise has vastly exceeded any increases in revenues from sports, primarily from broadcasting rights. I also note the change in ownership composition at sports franchises, with wealthy individuals replacing old-time owners, who may have run sports teams as businesses. Viewed as trophy assets, the pricing of sports franchises will continue to deviate from value, with no catalyst for correction. As long as the number of billionaires exceeds the number of desirable sports franchises in the world, this pricing game will continue. Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/blog/SportsFranchises.pdf Blog Post: https://aswathdamodaran.blogspot.com/2023/08/money-in-sports-trophy-asset-effect.html Valuation of the Washington Commanders: https://pages.stern.nyu.edu/~adamodar/pc/blog/Commanders.xlsx Learn more about your ad choices. Visit megaphone.fm/adchoices

  • Tuesday · 24 min

    Fairness Opinions: Time to fish or cut bait!

    Fairness opinions are offered as protection for investors in deals, especially when there is a danger of self-dealing. While that is a noble motive, fairness opinions, in practice, have becomes shields that managers and boards use against accountability. It is better to have no protection than fake protection, but for fairness opinions to serve their purpose, judges have to step up to the plate and there have to be consequences for bad behavior on the part of appraisers, managers and directors. Blog Post: http://bit.ly/2cwsX4p Fairness Checklist: http://www.stern.nyu.edu/~adamodar/pc/blog/fairvaluequestions.docx Learn more about your ad choices. Visit megaphone.fm/adchoices

  • Monday · 50 min

    A Business Upended: Streaming and the Future of The Entertainment Business

    It has been an unsettling summer for the US movie and broadcasting businesses, with a strike by actors and writers stretching into its third month, a contractual dispute between Disney and Charter leading to a yanking of Disney channels (including ESPN) from Charter cable subscribers and the meltdown in Disney stock prices. In this session, I argue that these are symptoms of a longer term disruption of the movie and broadcasting business, as streaming has changed the way content is made, distributed and watched. After looking at how streaming has altered the volume, cost and type of content made, I look at its effect on the operating metrics and pricing of entertainment companies. I look at three scenarios for how this disruption will continue to play out - complete disruption and devastation, where the movie & broadcasting business mirror the collapse of the music business after Spotify's emergence, at one extreme, and adaptation and co-option, where the traditional movie makers bring their historical strengths to outflank the disruptions, at the other, and an intermediate scenario, where the future of entertainment belongs to the adaptable firms. Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/blog/Entertainment2023.pdf Blog Post: Learn more about your ad choices. Visit megaphone.fm/adchoices

  • Monday · 1 hr 34 min

    Session 2: The Bermuda Triangle and Valuation Approaches

    This class started with a test on whether you can detect the direction bias will take, based on who or why a valuation is done. The solutions are posted online. We then moved on to talk about the three basic approaches to valuation: discounted cash flow valuation, where you estimate the intrinsic value of an asset, relative valuation, where you value an asset based on the pricing of similar assets and option pricing valuation, where you apply option pricing to value businesses. With each approach, we talked about the types of assets that are best priced with that approach and what you need to bring as an analyst/investor to the table. For instance, in our discussion of DCF valuation and how to make it work for you, I suggested that there were two requirements: a long time horizon and the capacity to act as the catalyst for market correction.Today's class started with a test on whether you can detect the direction bias will take, based on who or why a valuation is done. The solutions are posted online. We then moved on to talk about the three basic approaches to valuation: discounted cash flow valuation, where you estimate the intrinsic value of an asset, relative valuation, where you value an asset based on the pricing of similar assets and option pricing valuation, where you apply option pricing to value businesses. With each approach, we talked about the types of assets that are best priced with that approach and what you need to bring as an analyst/investor to the table. For instance, in our discussion of DCF valuation and how to make it work for you, I suggested that there were two requirements: a long time horizon and the capacity to act as the catalyst for market correction. We then started our discussion of intrinsic valuation, with a simple experiment on valuation, which led to three propositions about valuation. In the course of that discussion, I mentioned the weapons of mass distraction that people throw at us, as work through the numbers. Start of the class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/biastests.pdf Slides: (1) http://www.stern.nyu.edu/~adamodar/podcasts/valfall16/valsession2.pdf (2) http://www.stern.nyu.edu/~adamodar/podcasts/valfall16/valsession2a.pdf Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session2atest.pdf Post class test solution: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session2asoln.pdf Learn more about your ad choices. Visit megaphone.fm/adchoices

  • Monday · 48 min

    Putting the (Insta)cart before the (Grocery)horse: A COVID Favorite's Reality Check!

    The COVID shutdown in 2020 created a host of pain, but it did also create some winners, and one of those was Instacart, an online grocery shopping and delivery company that was made for that moment. As Instacart usage soared, its pricing (by venture capitalists) also jumped, hitting $39 billion in a capital round in 2021. The bloom is off the rose, as online grocery sales have leveled off and Instacart is finally going public at a pricing of around $9-10 billion. I start by looking at the Instacart business model, with revenues coming from transaction service feeds and ads, and put it against the backdrop of the business that it serves, which is groceries. The grocery business is huge, but its combination of low growth and low margins, puts a ceiling on how quickly an intermediary in the business can grow and the profitability of that intermediary. I assume modest growth in transactions on Instacart, in line with overall growth in online grocery sales, with a declining take rate and improving profitability to estimate a value per share of about $29. While that put me right in the middle of the offering range, the stock started trading just as I was doing this session, and popped to $42. While I don't think it is an attractive investment at that price, who knows where it will be trading at a week from now? You are welcome to start with my valuation of Instacart and make it your own. Finally, I try to dispense with the notion that value investors are "smart money", by tracking VC investments over Instacart's life as a company, and chronicling that they trade companies, rather than invest in them. Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/blog/InstacartIPO.pdf Instacart Valuation: https://pages.stern.nyu.edu/~adamodar/pc/blog/InstacartIPO.xlsx Blog Post: https://aswathdamodaran.blogspot.com/2023/09/putting-instacart-before-grocery-horse.html Learn more about your ad choices. Visit megaphone.fm/adchoices

  • Monday · 30 min

    The Keystone Kops of Valuation: Lazard, Evercore and the TSLA/SCTY Deal

    When Tesla announced its intent to buy Solar City, Elon Musk was exposed to charges of conflict of interest, since he controlled both companies. The boards of the two companies, aware of the potential for litigation, hired bankers (Tesla hired Evercore and Solar City hired Lazard) to value the two companies and their attempts at valuation are summarized in the Tesla prospectus. In this webcast, I take a look at these critical look at these valuations and conclude that even by the woeful standards of banking valuations, these fall short. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/KeystoneKops.pdf Blog Post: http://bit.ly/2cH68Ny Learn more about your ad choices. Visit megaphone.fm/adchoices

  • Sunday · 27 min

    Market Bipolarity: Exuberance versus Exhaustion!

    In this session, I use the end of the third quarter of 2023 as an opportunity to look at economic and market movements during the quarter, and to try to make judgments about what the last quarter has in store. After the economy and markets delivered positive surprises in the first half of 2023, the third quarter was split in two halves, with the first six weeks of the quarter a continuation of the optimism of the first half of the year, and the second six weeks representing a return to a more dour mood. Coming into the fourth quarter, the uncertainties about inflation and the economy that existed at the start of the year remain, in large part, unresolved,. While the market looks close to fairly valued, given consensus earnings estimates and interest rates today, your judgment will change based on whether you think inflation will remain stubbornly high (subside) and on whether you think the economy is headed for a recession (soft landing). Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/blog/EquitiesOct2023.pdf Blog Post: https://aswathdamodaran.blogspot.com/2023/10/market-bipolarit-exuberance-versus.html S&P Valuation Spreadsheet: https://pages.stern.nyu.edu/~adamodar/pc/blog/S&P500ValueOct2023.xlsx Learn more about your ad choices. Visit megaphone.fm/adchoices

  • Sunday · 1 hr 34 min

    Session 1: Introduction to the Class

    In this session, I laid out the five broad themes that underlie this class, that valuation is a craft, that it is simple & universal, that value and price represent different concepts, that a good valuation is a bridge between stories and numbers and that valuation is a tool for action (not intellectual curiosity). Syllabus: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/eqsyllfall16.pdf Project description: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/eqproj.pdf Slides: http://www.stern.nyu.edu/~adamodar/podcasts/valfall16/valsession1.pdf Learn more about your ad choices. Visit megaphone.fm/adchoices

  • Sunday · 59 min

    Invisible, but Invaluable: Valuing Intangibles - The Birkenstock IPO

    It is undeniable that intangible assets account for a large portion of value at many companies, and that they are increasing as a percent of value across time. Accountants, who have historically struggled with valuing intangible assets, have started grappling with that shortcoming. In my season, sometimes to the point of obsession, I look at why accountants are so focused on valuing intangibles, and argue that it comes from trying to show them on balance sheets. I also note that while accounting is talking the talk on intangible assets, there is little tangible evidence of change in balance sheets - goodwill, which is a plug variable, is 60% of intangible assets on balance sheets, and the gap between market value and book value at companies with intangible assets has widened over time. I use an intrinsic value framework to explain why I don't think that creating special approaches to value intangibles is unnecessary, and how a good intrinsic valuation should incorporate the value of intangibles. In the second part of the session, I use this framework to value Birkenstock, ahead of its IPO. The company is built on intangibles, and I incorporate the value of brand name, celebrity customers, great management and even the Barbie buzz (from Margot Robbie wearing pink Birkenstock in the movie), to arrive at a value of €8.3 billion for the equity in the company, below, but within shouting distance of the IPO pricing of €9.2 billion. Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/blog/Birkenstock2023.pdf Blog Post: https://www.blogger.com/u/1/blog/post/edit/8152901575140311047/6661365908510421773 Birkenstock Valuation: https://pages.stern.nyu.edu/~adamodar/pc/blog/BirkenstockIPO2023.xlsx Learn more about your ad choices. Visit megaphone.fm/adchoices

  • Sunday · 30 min

    Mean Reversion: Statistical Fact or Dangerous Delusion?

    Much of investing, especially contrarian, is built on the belief that things revert back to norms, either over time or in the cross section. Thus, when you argue that stocks are over priced at a PE of 25, because the historic average is 16, you are buying into mean reversion, just as you when you argue that a steel company trading at 6 times earnings is cheap, because the sector average is 12. While mean reversion is a powerful force, I argue that there is more nuance than we let on, that structural changes can lay waste to it and converting statistical significant to real money is difficult, using the Shiller PE as an illustrative example. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/MeanReversion.pdf Post: http://bit.ly/2bJzp6k Market timing spreadsheet: http://www.stern.nyu.edu/~adamodar/pc/blog/mkttimingCAPE.xlsx Learn more about your ad choices. Visit megaphone.fm/adchoices

Showing 1–20 of 80 episodes