Aswath Damodaran

In early 2000 Shiller published Irrational Exuberance, which warned of a stock market bubble. The second edition in 2006 warned of a housing market bubble. The third edition in 2015 warned of a bubble in almost everything. So I've been concerned since 2015 about the next recession. It does look increasingly likely to happen in the next 1-2 years. Damodaran has some interesting analysis on what might happen to different market sectors. https://aswathdamodaran.blogspot.com/ All the best.

A reasonably sound place to start for investing as an individual is the Bogleheads wiki: https://www.bogleheads.org/wiki/Main_Page The general Bogleheads approach isn't to try to estimate value of individual stocks or sectors of the economy, basic idea is passive investment: buy & hold index funds to get diversified exposure to market returns, then minimise costs by avoiding funds with high management fees. Bernstein's http://www.efficientfrontier.com/ is good reading, from perspective of individual investor. If on the other hand you want to learn about how to estimate value of companies (this will probably will not have a good return on time or money invested for an individual compared to low effort passive investment approach) one place to start reading is http://pages.stern.nyu.edu/~adamodar/ & http://aswathdamodaran.blogspot.com/

Thanks for the kind words! I am the author. If you're interested in fundamental valuation, there are quite a few great resources. I highly recommend starting with: Value: The Four Cornerstones of Corporate Finance Investment Valuation, by Aswath Damodaran I also recommend Aswath's blog https://aswathdamodaran.blogspot.com/ If you enjoyed the article, you might be happy to know there are several other analysis pieces on the Invariant Substack that cover specific companies and walk through valuation methodologies. There will also be many more pieces like this in the future. Please sub and comment on the Listerine piece, as I'd love to correspond on the platform, and I'd be happy to provide guidance/answer further questions regarding valuation. If you provide any kind of identifier for your sub email, I'm also happy to answer questions and bounce idea via email. I'm always looking to connect with other curious people that love finance.

Aswath Damodaran [1] has some good takes on the ESG from finance/economic perspective: in video [2] [3] and text format [4]. [1] https://en.wikipedia.org/wiki/Aswath_Damodaran [2] "Doing good or Sounding Good: A Skeptical Look at ESG!", 2020 https://www.youtube.com/watch?v=Vs1g7Epp11w&ab_channel=AswathDamod… [3] "An ESG Follow up: The Gravy Train (or circle) rolls on!", follow up from [2], 2021 https://www.youtube.com/watch?v=5H6_60Tv0i0&ab_channel=AswathDamod… [4] https://aswathdamodaran.blogspot.com/2020/09/sounding-good-or-doing-go…

I'm not sure if you're quizzing people or asking for a way to value a company like Tesla. In which case I would recommend Aswath Damodaran's blog, where he's done that a few times, so you can see his methodology. http://aswathdamodaran.blogspot.com/2020/01/an-ode-to-luck-revisiting-… (in video form at the bottom if you prefer)

I hate to be glib about valuations. There are a few people out there who have done the hard work: http://aswathdamodaran.blogspot.com/2019/04/ubers-coming-out-party-per… https://www.forbes.com/sites/greatspeculations/2018/02/22/breaking-dow… And Bloomberg had a good one, though I can't find it now. I am not endorsing any of these, but the difference between a bull and bear (or, if you will, a valuation higher than what we have and lower than what we have) is probably how much you think additional business are worth. So if you think that food delivery, logistics etc will amount to a large, valuable business, I think you are bullish.

Very interesting article on the economics of MoviePass [1] [1] http://aswathdamodaran.blogspot.com/2018/05/user-and-subscriber-busine…

Whenever I see twitter's share price mentioned, I think of Damodaran's valuation of Twitter stock - $18. His academic approach may be more accurate than hyped up numbers. See http://aswathdamodaran.blogspot.com/2016/02/management-matters-faceboo… - > The best that I can say about Twitter, at the moment, is that at $18/share, it is fairly valued, but if the company continues to be run the way it has for the last few years, both price and value could move in tandem to zero.

If you are interested in valuing Internet/Tech companies, look into Aswath Damodaran's blog http://aswathdamodaran.blogspot.com/?m=1 In the past he had valued AAPL, FB, Uber etc. His Investment Valuation course at NYU Stern is also available online.

The Uber article that you referred to as Nate Silver is not actually by him. Its by Ashwath Damodaran (The NYU corp finance prof) http://fivethirtyeight.com/features/uber-isnt-worth-17-billion/ His basic assumption was to use the taxi market as the total addressable market (TAM) Bill Gurley, a VC from Benchmark and one of the investors in Uber, lays out alternative scenarios for TAM including going after car ownership. http://abovethecrowd.com/2014/07/11/how-to-miss-by-a-mile-an-alternati… Damodaran's response to Gurley concedes its probable/plausible/possible for uber to get into non-Taxi and larger markets: http://aswathdamodaran.blogspot.in/2014/07/possible-plausible-and-prob… Bottom line: the optionality of uber going into these larger markets is what is driving these valuations

Aswath Damodaran, for what it's worth, is the same professor who got similar press last year for valuing Tesla (then trading at $170) at $67 a share: http://aswathdamodaran.blogspot.com/2013/09/valuation-of-week-1-tesla-… OP's article nails it: precise financial analysis is meaningless if you base your projections on way-off assumptions.

Great write-up. For those interested and not already aware, Damodaran's own site has lots of great posts on finance and valuation. This article seems to build on his original analysis done here: http://www.aswathdamodaran.blogspot.com/2014/06/a-disruptive-cab-ride-…

You'll may have seen this, since this is a bit old now. But, the quality, lucidity, and accessibility of this piece makes it worth another read. Aswath Damodaran, NYU Stern Professor of Finance has a great piece here on Whatsapp pricing - http://aswathdamodaran.blogspot.in/2014/02/facebook-buys-whatsapp-for-…

“It’s hard to find a mathematics in which Instagram worth $1 billion in cash, but in pre-IPO stock, Facebook could stomach the hit.” This statement might make sense if Facebook were cash strapped, but in fact Facebook has plenty of cash. By paying in pre-IPO stock that is likely to be worth a lot more in a few months, Facebook is probably getting a bad deal compared to Instagram investors. It’s true that some people think Facebook is overvalued, but there are also analysts who believe Facebook is fairly valued (http://aswathdamodaran.blogspot.com/2012/02/ipo-of-decade-my-valuation… and few are arguing it’s as overvalued as, say, Groupon was at IPO.

Seems to be in line with Aswath Damodaran's valuation estimate. "From my perspective, this seems like an optimistic story, where WeWork generates pre-tax operating income of 10.07 billion on revenues of $80.5 billion in 2029, generating a 26.61% return on capital on intermediate capital investments. Allowing for a starting cost of capital of about 8%, the resulting value for the operating assets is about $29.5 billion, but before you decide to put all your money in WeWork, there are two barriers to overcome: Possibility of failure: The debt load that WeWork carries makes its susceptible to economic downturns and shocks in the real estate market, and the cost of capital, a going concern measure of risk, is incapable of capturing the risk of failure embedded in the business model. I will assume a 20% chance of failure in my valuation, and if it does occur, that the firm will have to sell its holdings for 60% of fair value. Debt load: As I noted in the last section, the company has accumulated a debt load, including lease commitments, of $23.8 billion. Adjusting for these, the resulting value of equity is $13.75 billion, and with my preliminary assessment of shares outstanding, translates into a value per share of about $26/share." Highly recommended read for those that haven't already: http://aswathdamodaran.blogspot.com/2019/09/runaway-story-or-meltdown-…

Matthew DeBord is Business Insider's resident Tesla bear. His background is as a "car guy" automotive journalist, not as a financial analyst or financial journalist. This lack of a finance background painfully shows in much of his writing. If you look at his author archive, he is literally publishing 4-5 Tesla related stories a week, often with some kind of clickbait title. To avoid running afoul of Graham's Hierarchy, let's consider his arguments. - Tesla's valuation - Before diving in, I think most people can agree that based off any kind of traditional financial analysis (DCF or comps), Tesla stock is overvalued. Musk himself has said this at times(https://qz.com/1031702/all-the-times-elon-musk-has-trash-talked-teslas… Nasdaq estimates, perhaps generously, that the stock trades at a 36.57 P/E of 2020 earnings, so anyone buying into the stock today is paying for a decade or more of future growth today. Aswath Damodaran has called Tesla a "story stock", one whose valuation is largely dependent on what scenario of future growth you believe in. He said in August 2017 that the stock is worth anywhere from $82.66 to $316.46, with his base case estimate of $151.85. You can see his assumptions mapped out here: http://aswathdamodaran.blogspot.com/2017/08/a-tesla-2017-update-disrup… Now to look at some of DeBord's "comparisons" between Tesla and other companies. - Tesla vs. GM - > "What Tesla considers to be an ambitious…

What you're describing may be illegal. A company cannot juice top line revenue with the full meal values like this as they report revenue to sell to investors and get ready to IPO. The revenue reported would need to be clearly a transaction revenue they get from facilitating the service between restaurants and hungry people. troydavis' comment is correct. The full order values or GMV and Uber's separate cut of it (net revenue or transaction revenue) are both important numbers and both should be reported. But the total order value should not reported as a revenue. A few years ago Groupon got in trouble for fishy accounting and had to restate earnings. http://dealbook.nytimes.com/2011/09/23/groupon-changes-its-revenue-acc… Also, for anyone looking for a more professional writeup about Uber's valuation, while he famously got it wrong at first I still think Professor Damodaran is the best one writing about it. http://aswathdamodaran.blogspot.in/2016/08/the-ride-sharing-business-i…

Also see Aswath Damodaran’s updated analysis. It’s not quite as dire as Morningstar but is still lower than what musk wants. > At the rumored pricing of $1.8 trillion for the company, it is too richly priced for my tastes, given my valuation of $1.25-$1.35 trillion for the equity in the company. https://aswathdamodaran.blogspot.com/2026/06/a-weeks-ago-i-assessed-va…

Aswath Damodaran's Nvidia analsysis: Assuming 32% CAGR rate of over 5 years with 40% target operating margin at the end of period Nvidia is now 40% overvalued. https://aswathdamodaran.blogspot.com/2024/02/the-seven-samurai-how-big…

> dilution of the stock Assuming that the original Twitter thread folk is not doing LARPing, this one bit summarizes the entire point why institutional investors like TCI [1] were demanding layoffs due to dilution via SBC [2]. I would prefer a precise definition from SEC regarding on how SBC is declared [3] (it it's Cash Expense or not) and establish a clear guidance for all investors to remove this generalized anxiety that put pressure on workers. [1] - https://www.tcifund.com/files/corporateengageement/alphabet/15th%20Nov… [2] - https://aswathdamodaran.blogspot.com/2014/02/stock-based-employee-comp… [3] - https://www.eigercapital.com/stock-based-compensation/

Related: https://aswathdamodaran.blogspot.com/2021/09/the-esg-movement-goodness… By the guy who wrote the book on valuation.

It really is a currency, however. It's not a matter of perception but rather of how Bitcoin functions. The biggest difference between a commodity and currency is that a commodity is essential for some process or product. A currency is just one of many ways of funding that process/product. You can't build a computer without gold, copper, and some rare earth metals (commodities) but you can pay for it with USD, bitcoin, yuan, GBP, etc. Aswath Damodaran has written a lot more on this topic. https://aswathdamodaran.blogspot.com/2017/10/the-bitcoin-boom-asset-cu… He does agree with you in that Bitcoin will be judged as a currency, so its strengths and deficiencies as a currency will determine its fate.

Aswath Damodaran's analysis. http://aswathdamodaran.blogspot.com/2020/12/the-sharing-economy-come-h… TLDR;The per share value based upon the latest share count is about $54/share.

Here: http://aswathdamodaran.blogspot.com/2020/03/a-viral-market-meltdown-ii… It's a 2 month old article by perhaps the most respected figure in valuation. He came up with 2750 for S&P at that time (market value was much lower, maybe he would be more pessimistic now). You can enter your own assumptions into his spreadseet and it will output a valuation.

Stock based compensation doesn't affect cash flow. It's newly issued stock granted to employees. I'm not sure when the accounting laws changed to include SBC (probably post-financial crisis), but it's weird to include it in an income statement as if it was a cash expense. You can find articles from accounting experts arguing both ways if you are curious. e.g. http://aswathdamodaran.blogspot.com/2014/02/stock-based-employee-compe…

This guy is basically the god of the DCF: http://aswathdamodaran.blogspot.com/search?q=dcf

http://aswathdamodaran.blogspot.de/2017/10/the-bitcoin-boom-asset-curr… about value vs pricing vs asset.

Famous NYU valuation professor on how to value bitcoin: http://aswathdamodaran.blogspot.com/2017/10/the-bitcoin-boom-asset-cur…

He's quite often wrong: http://aswathdamodaran.blogspot.com/2012/02/ipo-of-decade-my-valuation…

this valuation expert from NYU puts the value at $13.3B (dramatically lower than the stated IPO price) http://aswathdamodaran.blogspot.com/2017/02/a-snap-story-valuing-snap-…