Videos uploaded by user “Aswath Damodaran”
Session 1: Introduction to Valuation
Lays out the rationale for doing valuation as well as the issues of bias, complexity and uncertainty that bedevil it.
Views: 464025 Aswath Damodaran
Session 2: Intrinsic Value - Foundation
Sets up the foundations of intrinsic valuation, with a contrast between valuing a business and valuing the equity in that business.
Views: 194776 Aswath Damodaran
Data Update 1 for 2019: Stocks are risky (in case we had forgotten)!
After an extended bull market, investors were surprised again in 2018 to find out the stocks were risky and that there is a reason why we earn an equity risk premium. In 2018, the pain in US stocks was almost entirely felt in the last quarter, and while it was a down year for stocks, it was only a mildly bad year, by historical standards. Using the equity risk premium as measuring device, I look at stocks at the end of 2018, and while the current numbers are more supportive of the notion that stocks are under valued, not over, concerns about economic growth in 2019 and 2020 may hold you back. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/DataUpdate1for2019.pdf Data sets: 1. Historical returns on stocks, bonds and bills: http://www.stern.nyu.edu/~adamodar/pc/datasets/histretSP.xls 2. Historical implied equity risk premiums: http://www.stern.nyu.edu/~adamodar/pc/datasets/histimpl.xls Spreadsheets: http://www.stern.nyu.edu/~adamodar/pc/implprem/ERPJan18.xlsx
Views: 15690 Aswath Damodaran
Walmart's Flipkart Gambit: Growth Rebirth or Costly Facelift?
Walmart's $16 billion investment for 77% in Flipkart (valuing the company at $21 billion), the Indian online retail leader, is one of Walmart's biggest gambles on growth, and I look at four possible explanations for the deal: (1) Walmart is playing a pricing game, hoping to flip Flipkart to another investor, just as existing investors in Flipkart did to Walmart. (2) Walmart is buying an option to enter the growing, highly volatile Indian retail market (3) The deal will create synergies for Walmart (increasing revenues at its Indian stores) and/or Flipkart (by increasing its online revenue growth or profitability) (4) The deal is a defensive maneuver meant to slow down Amazon. Given how large Amazon looms in the fears of both Walmart and Flipkart, and how difficult it is to find justification for the first three reasons, I conclude that it this deal is defensive and that cannot be good news for Walmart shareholders. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/WalmartFlipkart.pdf Blog Post: https://aswathdamodaran.blogspot.com/2018/05/walmarts-india-flipkart-gambit-growth.html Walmart Valuation: http://www.stern.nyu.edu/~adamodar/pc/blog/WMT2018.xlsx
Views: 13561 Aswath Damodaran
What is this class about?
A 2-minute introduction to what this class is about (and what it is not about)
Views: 20236 Aswath Damodaran
Session 8: Estimating Growth
Looks at alternative approaches to estimating expected growth, including past growth and analyst estimates, as well as fundamental growth.
Views: 55154 Aswath Damodaran
Signal or Noise? Yield Curves, Economic Growth and Stock Prices
On December 4, 2018, the yield on a 5-year US treasury dropped below the yields on the 2-year and 3-year treasuries, causing a portion of the US treasury yield curve to invert. Since inverted yield curves have predicted recessions almost perfectly for the last six decades in the US, it was viewed as a big reason for the market's drop that day. In this session, I start with the impressive track record that inverted yield curves have had as recession predictors, posit that this may be because they are stand-ins for the "Fed" effect (on the economy) and then look at the data over the last 56 years. I find that it is the short end (2 yr vs 1 yr), not the more common used long end (10 yr vs 2 yer), of the yield curve that offers predictive power, and even that power is limited. I also find that the post-2008 data yields very different results than the pre-2008 data, suggesting that the crisis may have reduced investor faith in the powers of the Fed and consequently altered any predictive power that the yield curve may have had prior to the crisis. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/YieldCurveInversion.pdf Blog Post: https://aswathdamodaran.blogspot.com/2018/12/is-there-signal-in-noise-yield-curves.html Raw Data on interest rates, growth & stock returns: http://www.stern.nyu.edu/~adamodar/pc/blog/intrate2018.xlsx
Views: 19110 Aswath Damodaran
An October Surprise: Making Sense of Market Mayhem!
The first four weeks of October 2018 have seen big drops in stock prices across the globe, and as in any market correction, the question that you face as an investor is what, if anything, you should be doing in response. I feel the urge to react, but I know that if I do so, I can put my portfolio at risk. I go through a four step process, starting with a hitting of the pause button, following up with using the data to assess the damage and a check of the fundamentals, before acting. The bottom line is that none of the offered explanations for the stock rout hold. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/OctoberSurprise.pdf Blog Post:
Views: 15280 Aswath Damodaran
Session 9: Terminal Value
It is the biggest number in any discounted cash flow valuation, and we look at simple rules that keep it in check.
Views: 61086 Aswath Damodaran
Session 14: Relative Valuation - First Principles
Develop a four-step process for deconstructing, understanding and using multiples
Views: 40371 Aswath Damodaran
Investing Idol Worship: The Kraft Heinz Lesson
When Kraft Heinz reported earnings last Friday (February 22), they shocked markets with a trifecta of bad news - stagnant operating results, a massive goodwill impairment and mention of accounting irregularities being investigated by the SEC. When they followed up by cutting dividends, the stock collapsed more than 25%. The shock was amplified for investors because of the pedigree of the two lead investors in the company - Berkshire Hathaway and 3G Capital, both with reputations for investing acumen and shrewdness. If you needed a reminder that Warren Buffett is human (though he is been open about that truth for a long time), makes mistakes and has investing blind spots, you got it. More generally, though, no investor, no matter what his or her track record, should be put on a pedestal and followed blindly. In the session, I also do an updated valuation of Kraft Heinz, which will guide my actions, but if you buy into the broader lesson, should not guide yours. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/KraftHeinz.pdf Blog Post: https://bit.ly/2NyBQuT
Views: 10801 Aswath Damodaran
Session 5: Betas (Relative Risk Measures)
Describes what a beta tries to measure and after critiquing the standard regression approach to beta estimation, I develop an approach for estimating betas for individual companies.
Views: 84225 Aswath Damodaran
The GE End Game: The Bataan Death March or Resurrection?
GE has had a long and glorious run as a public company. Incorporated in 1892, the company has been a fixture in markets and has changed the way Americans live. However, from its peak in 2001, when it was the largest market cap stock in the world, the company has been on a long ride down, with the deceleration speeding up in the last two years. In this session, I look for pathways forward for the company, by first looking back and breaking the company down into its businesses. I price the businesses to see if it is worth more broken up and then value the businesses to check it can survive as a going concern. I believe that the latter option is the better one, and that if the company chooses to act its age and accept that its growth days are behind it, it is a good investment. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/GEin2018.pdf Blog Post: https://aswathdamodaran.blogspot.com/2018/11/the-ge-end-game-bataan-death-march-or.html GE Pricing and Valuation: http://www.stern.nyu.edu/~adamodar/pc/blog/GEin2018.xlsx
Views: 15486 Aswath Damodaran
Session 15: PE Ratios
Look at the determinants of PE ratios and how to use them in comparisons across time, markets and companies.
Views: 40964 Aswath Damodaran
Session 6: Cost of Debt and Capital
Defines debt and cost of debt and then uses those measures to arrive at the cost of capital for a company.
Views: 72749 Aswath Damodaran
Superman and Stocks: It's not the cape (CAPE), it's the kryptonite (Cash Flow)
Robert Shiller's variant on PE (CAPE) has become the most commonly used device that those who believe that the market is in bubble territory use to justify their argument. In this session, I give my jaundiced and biased perspective on CAPE and why focusing on it is costly, for most investors. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/Superman&Stocks.pdf Blog post: http://aswathdamodaran.blogspot.com/2016/08/superman-and-stocks-it-not-cape-cape-it.html
Views: 6615 Aswath Damodaran
Introduction to Class
This is a valuation class, and it will cover just about every asset, while drawing a contrast between value and price along the way. The webpage for the class provides links to the syllabus and other material needed for the class. Syllabus: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/eqsyllUGspr19.pdf Webpage for class: http://www.stern.nyu.edu/~adamodar/New_Home_Page/equityUG.html
Views: 8285 Aswath Damodaran
Session 20: Private Company Valuation
Examine the estimation challenges associated with valuing small or large privately-owned businesses.
Views: 33018 Aswath Damodaran
Session 21: The Essence of Real Options
Lay the foundations for viewing and valuing some assets as options and how it adds to their values.
Views: 29752 Aswath Damodaran
Preview of the Class (General and very brief)
This is a very general introduction to the class, designed for those who are taking the class at NYU. If you want specifics, I am afraid that you will have to wait until session 1, which is not scheduled until February 4, 2019. The class will continue, meeting two times every week on Mondays and Wednesdays, through May 12, 2019. You are welcome to follow along. The webpage to accompany the class is listed below: Webpage for the class: http://www.stern.nyu.edu/~adamodar/New_Home_Page/corpfin.html Syllabus for the class: http://www.stern.nyu.edu/~adamodar/pdfiles/cfovhds/cfsyllspr19.pdf Calendar for the class: https://bit.ly/2qP2PHT
Views: 6858 Aswath Damodaran
Session 4: Equity Risk Premiums
Contrasts different approaches for estimating equity risk premiums in mature markets and extends these approaches to emerging markets and then to individual companies.
Views: 112856 Aswath Damodaran
Session 16: Other Earnings Multiples
Extend the discussion to look at operating earnings and EBITDA multiples and their determinants.
Views: 24257 Aswath Damodaran
Session 1: Corporate Finance: What is it?
Introduction to Corporate Finance
Views: 161529 Aswath Damodaran
Investment Philosophies: Overview of class
Provides an overview of the class
Views: 29068 Aswath Damodaran
Netflix: The Future of Entertainment or House of Cards?
Netflix has changed the entertainment business in the last two decades. Starting as a disruptor in the video rental business, it has adapted to new technologies and changing user tastes, to becoming one of the largest movie content producers in the world, while accumulating more that 117 million users globally. In this session, I look at where Netflix stands now, and try to value it using a subscriber-based model. While my value is well below the price, I argue that the key value driver at Netflix is content cost growth. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/Netflix2018.pdf Blog Post: https://aswathdamodaran.blogspot.in/2018/04/netflix-future-of-entertainment-or.html Valuation: http://www.stern.nyu.edu/~adamodar/pc/blog/NetflixSubscriber2018.xlsx
Views: 16728 Aswath Damodaran
Tesla: A Disruptive Force with a Debt Problem?
Tesla has been a bright star in the investing universe for much of the last decade. It's rise in market capitalization, now higher than that of GM or Ford, can be traced to Elon Musk's vision and the company's innovative products, and it is quite clear that the company has disrupted the automobile business. In spite of its successes, though, I think that the company is too richly priced given the challenges it faces over the next decade. It's use of debt is puzzling, given that it derives no tax benefits from borrowing and is putting its promise and potential at risk of distress. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/Tesla2017.pdf Blog Post: Valuation of Tesla: http://www.stern.nyu.edu/~adamodar/pc/blog/TeslaAugust2017.xlsx
Views: 20561 Aswath Damodaran
Preview of the class (general and brief)
This session lays out in very broad themes and in a couple of minutes what this class is about. If you want more details, I am afraid that you will have to wait until the first session on February 4, 2019. In the meantime, you can check out the syllabus for the class and the calendar.
Views: 9473 Aswath Damodaran
Session 12: Acquisition Ornaments: Synergy, control & complexity
Look at the value of control and synergy, oft used reasons for acquisitions, as well as the consequences of complexity for value.
Views: 25587 Aswath Damodaran
Trillion Dollar Duo: An Apple and Amazon Retake!
As the market capitalizations of Apple and Amazon top a trillion dollars, it is a good moment to stop and look at how both companies reached that pedestal, not just for just business lessons, but also to make investment judgments on both stocks. While it is undeniable that both companies have been successful over the last two decades, their operating paths have been very different, with Apple using the iPhone to generate ever-increasing operating margins and huge positive cash flows, and Amazon evolving into a disruption platform, entering new businesses and posting high revenue growth, often at the expense of higher margins. I value both companies and find Apple mildly overvalued (by about 9%) and Amazon significantly so (about 35%). Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/TrillionDollarDuo.pdf (with Apple story fixed) Blog Post: https://aswathdamodaran.blogspot.com/2018/09/apple-and-amazon-at-trillion-looking.html Valuation Spreadsheets: Apple: http://www.stern.nyu.edu/~adamodar/pc/blog/AppleSept18.xlsx Amazon: http://www.stern.nyu.edu/~adamodar/pc/blog/AmazonSept18.xlsx
Views: 8029 Aswath Damodaran
Facebook: Friendless, but still formidable!
Facebook has had a few really bad weeks, both in financial markets and in public repute. In this session, I look at Facebook, as it stands on April 3, 2018, as an investment. After perhaps the most impressive opening act in corporate history, the company is faced with a moment of truth, where its business model, where users trade information about themselves in return for a free and ubiquitous social media site, is under the microscope. I argue that the data privacy scandal will cause some advertisers to flee, result in lower revenue growth and lower margins and lead to large fines, but notwithstanding all this punishment, the company is a good value (as of April 3, 2018). You will sure disagree with me, and if you do, please use the valuation spreadsheet to make your best judgments. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/Facebook2018.pdf Facebook valuation: http://www.stern.nyu.edu/~adamodar/pc/blog/FacebookApr2018.xlsx Blog Post: https://aswathdamodaran.blogspot.com/2018/04/the-facebook-feeding-frenzy.html
Views: 12039 Aswath Damodaran
Lyfting Off? The Lyft IPO
Last week, Lyft became the first of the ride sharing companies to filer an IPO. Using the information in the prospectus, and telling a story about Lyft as a US, transportation services company, I value the equity at close to $16 billion. I also argue that on the opening day for trading, Lyft is more likely to be priced, and suggest some pricing metrics. Prospectus: https://www.sec.gov/Archives/edgar/data/1759509/000119312519059849/d633517ds1.htm Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/LyftIPO.pdf Lyft Valuation: http://www.stern.nyu.edu/~adamodar/pc/blog/LyftIPO2019.xlsx Lyft Pricing: http://www.stern.nyu.edu/~adamodar/pc/blog/LyftPricing.xlsx Blog Post: https://bit.ly/2NP9vAu
Views: 6515 Aswath Damodaran
Active Investing: Rest in Peace or Resurgent Force?
When Jack Bogle started the Vanguard 500 Index fund in 1975, I am sure that he never visualized how successful he would be. In the last few decades, passive investing has widened its offerings (to include ETFs and other markets) and has taken away market share from active investing, but the pace of disruption seems to have quickened in the last decade. The best advertising for passive investing is the performance of active investors, who seem to lag their passive counterparts, across time, style classes and geographies. I argue that active investing is destined to shrink as a business and that while there are potentially dangerous consequences to the rush to passive investing, the process has its own correction mechanisms. Finally, even in the face of the evidence to the contrary, I explain my rationale for staying an active investor. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/activeinvesting.pdf Blog Post: http://aswathdamodaran.blogspot.com/2016/12/active-investing-rest-in-peace-or.html
Views: 18545 Aswath Damodaran
Investment Whiplash: Better lucky than good?
A little over nine weeks ago, on September 21, 2018, I argued that Apple and Amazon were over valued and followed through with the decision to sell short both stocks, Apple at $230 and Amazon at $1950. On November 30, 2018, those calls make me look prescient but in this session, I posit that any gains on the position are more attributable to luck than skill. I also use my experience to argue that two widely held precepts in value investing, i.e., that intrinsic value never changes and that a long time horizon is a prerequisite for value investing are at odds with value investing first principles and need reexamination. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/ShortSaleClosure.pdf Blog Post:https://aswathdamodaran.blogspot.com/2018/12/investing-whiplash-looking-for-closure.html
Views: 8715 Aswath Damodaran
Alphabet Soup: All Alpha (Google), No Bets?
Google's name change to Alphabet cannot take away from the reality that the company is still an online advertising company, though its offerings have broadened from just a search engine to Gmail, YouTube and Android. In valuing Alphabet, I will assume that any restrictions or regulations from the Facebook data privacy scandal will affect Google's revenue growth more than its operating margins and value the company at about $969, tantalizingly close to the $1030 that it was trading at, at the time of the analysis. I also explain I will be inclined to buy the stock if the stock price drops even marginally below the price. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/Google2018.pdf Blog Post: https://aswathdamodaran.blogspot.in/2018/04/alphabet-soup-google-is-alpha-but-where.html Valuation: http://www.stern.nyu.edu/~adamodar/pc/blog/AlphabetApr2018.xlsx
Views: 10127 Aswath Damodaran
Snap, the Perishable Picture Company: Valuing the IPO
Toward the end of 2016, Snap (formerly known as Snapchat) became the latest of the social media companies to enter the public market. With 161 million engaged users but little in terms of current revenues & big operating losses, Snap fills the bill as a company with lots of potential but plenty of peril. In this post, I tell my story for Snap and the value that emerges from it. It is, for the most part, an optimistic story of a young company that has found a niche in the crowded social media space. In my story, Snap will not and should not try to be the next Facebook but I also see it as avoiding becoming Twitter Redux. Tell your own story and make your storyline into a value! Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/SnapIPO.pdf Blog Post: http://aswathdamodaran.blogspot.com/2017/02/a-snap-story-valuing-snap-ahead-of-its.html Links Snap Prospectus:https://www.sec.gov/Archives/edgar/data/1564408/000119312517029199/d270216ds1.htm Snap IPO valuation (my base story): http://www.stern.nyu.edu/~adamodar/pc/blog/SnapIPOFeb2017.xls Snap as Facebook Light: http://www.stern.nyu.edu/~adamodar/pc/blog/SnapFacebookLite.xls Snap as Twitter Redux:http://www.stern.nyu.edu/~adamodar/pc/blog/SnapTwitterredux.xls Snap Simulation: http://www.stern.nyu.edu/~adamodar/pc/blog/SnapSimulation.pdf
Views: 17803 Aswath Damodaran
Session 5: Estimating Hurdle Rates - The Risk free Rate
Estimate the foundation for all discount rates, a risk free rate.
Views: 51790 Aswath Damodaran
Deutsche Bank: A Greek Tragedy at a German Institution?
Deutsche Bank, in addition to having a long and storied history, is a German bank, and the Germans, with their reputation for precision, are viewed as good bankers. Thus, Deutsche's troubles not only over the last few weeks but stretching across the last few years have been unsettling to investors. With the stock down 80% (as of October 4, 2016), it looks like a contrarian bet, but I value Deutsche reflecting the new reality that faces them (big losses, capital shortfalls, possibility of a bailout) and make my investment judgment (Sorry, but you have to watch the video to the end to get that!) Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/DeutscheBank.pdf Valuation: http://www.stern.nyu.edu/~adamodar/pc/blog/DeutscheBank2016.xls Blog Post: http://aswathdamodaran.blogspot.com/2016/10/deutsche-bank-greek-tragedy-at-german.html
Views: 16615 Aswath Damodaran
Icahn exits, Buffett enters, Whither Apple? The Big Name Investor Effect
As investors, you are supposed to value companies, compare these values to prices and make your own valuation judgments. That said, you are exposed to and affected by big name investors making their own judgments about the companies that you invest in. Should your decision to buy a stock be changed by Carl Icahn selling that stock or should your judgment that a company is over valued be altered by Warren Buffett buying shares in that company? I explore the balance between faith and feedback in this session. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/BigNameInvestors.pdf Blog Post: http://bit.ly/1U9JaM4
Views: 6134 Aswath Damodaran
January 2019 Data Update 2: The Bond Market Message
In 2018, the US bond market was in sync with the US equity market, afflicted by the same fears and revealing the same patterns The US 10-year treasury bond rate, which started the year at 2.41% and rose as high as 3.24% in early November 2018, dropped back as worries about economic growth mounted. A flattening yield curve reinforced that message of lower growth. Looking to the next year, the gap between the ten-year bond rate (2.68%) and an intrinsic risk free rate (inflation + real growth for 2018 = 5.54%) is high, suggesting either that bond investors are being too pessimistic about future growth, or that growth will drop dramatically. I believe that we will split the difference, with higher T. Bond rates by the end of 2019 and lower economic growth in the US in 2019 than in 2018, albeit not a recession. Finally, the price of risk in the bond market (default spreads) rose in the last quarter of 2018, mirroring the rise in equity risk premiums. Investors in both stock and bond markets seem to have reached consensus that growth will slow and that there is more to fear. That said, they have been wrong in the past and we will see what 2019 delivers. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/DataUpdate2for2019.pdf Datasets: 1. T. Bond rate versus Intrinsic Riskfree rates - 1953 to 2018 (http://www.stern.nyu.edu/~adamodar/pc/blog/IntrinsicvsActualRates2019.xlsx)
Views: 8083 Aswath Damodaran
The Greatest Cash Machine in History: An Analysis of Apple (February 2017)
Apple is one of the great cash machines of all time, a company that has returned more cash ($183 billion) over the last five years than any other company in the world, while simultaneously building a cash balance of almost $250 billion. In a quarterly ritual that I started in 2010, I value Apple after its most recent earnings report (end of January 2017) and find it fully priced after an extended period where it was under valued (and in my portfolio). That is, though, based on my story and you are free to come up with yours and use my spreadsheet to convert to value. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/AppleCashMachine.pdf Blog Post: http://aswathdamodaran.blogspot.com/2017/02/apple-greatest-cash-machine-in-history.html Valuation Spreadsheet: http://www.stern.nyu.edu/~adamodar/pc/blog/AppleFeb2017.xls
Views: 10251 Aswath Damodaran
In Practice Webcast #1: Corporate Governance
I use HP as an example and look at how to make judgments on the quality of corporate governance, based upon public filings. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/cfovhds/webcasts/corpgovHP/corpgov.pdf HP Annual Report: http://www.stern.nyu.edu/~adamodar/pdfiles/cfovhds/webcasts/corpgovHP/HPAnnual.pdf HP 14 DEF: http://www.stern.nyu.edu/~adamodar/pdfiles/cfovhds/webcasts/corpgovHP/HPDEF14A.pdf
Views: 11415 Aswath Damodaran
Session 7: Estimating Cash Flows
Goes through the steps in estimating cash flows, from measuring earnings to computing reinvestment and then on to cash flows (to both the firm and to equity).
Views: 84411 Aswath Damodaran
Stream On: An IPO Valuation of Spotify!
Spotify, with 159 million subscribers and $5 billion in revenues, is to music streaming what Netflix is for video streaming. In this session, I look at the back story for Spotify and use the trends in its prospectus to craft a story and my valuation of Spotify. Suffice to say, the growth will come but the big question for the company is whether it can keep lowering content costs, without backlash from music labels and artists, and survive challenges from deep pocketed competitions like Apple and Amazon. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/SpotifyIPO.pdf Blog Post: https://aswathdamodaran.blogspot.com/2018/03/stream-on-ipo-valuation-of-spotify.html Valuation: http://www.stern.nyu.edu/~adamodar/pc/blog/SpotifyIPO.xlsx
Views: 14187 Aswath Damodaran
The Bitcoin Boom: Asset, Commodity, Currency or Collectible?
As the Bitcoin price boom continues, the big question has become whether it is over valued. In the session, I argue that the question is unanswerable, because Bitcoin is not an asset, but a currency, and currencies can only be priced, rather than valued. That said, Bitcoin's long term sustenance depends on it becoming a better currency, one that is accepted in more transactions and one that is a more stable store of value. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/BitcoinAsset.pdf Blog Post: https://aswathdamodaran.blogspot.com/2017/10/the-bitcoin-boom-asset-currency.html
Views: 19913 Aswath Damodaran
Session 13: Loose Ends - Distress, Dilution and Illiquidity
Look at how best to incorporate the effects of distress, dilution and ill liquidity into the value per share for a company
Views: 17398 Aswath Damodaran
Interest Rates and Stock Prices: Looking Under the Hood!
It is conventional wisdom that higher interest rates are bad for stocks, but is that true? In this session, I take issue with that conclusion, arguing first that interest rate changes are driven by changes in fundamentals, and second that you need to make a judgment on why rates are going up, before deciding whether that rise rise is good or bad for value. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/intratesstocks.pdf Blog Post: https://aswathdamodaran.blogspot.com/2018/03/interest-rates-and-stock-prices-its.html Spreadsheets: More of the Same: http://www.stern.nyu.edu/~adamodar/pc/implprem/MoreoftheSame2018.xlsx Inflation Returns: http://www.stern.nyu.edu/~adamodar/pc/implprem/Inflation2018.xlsx Real Growth Revs Up: http://www.stern.nyu.edu/~adamodar/pc/implprem/RealGrowth2018.xlsx Melded: http://www.stern.nyu.edu/~adamodar/pc/implprem/MeldedValue2018.xlsx
Views: 12013 Aswath Damodaran
Session 10: Value Enhancement
Looks at the drivers of value and how management actions can alter the value of a firm, for better or worse.
Views: 31887 Aswath Damodaran
Session 3: The Objective in Corporate Finance - Reality
Looks at the real world issues with maximizing stock prices.
Views: 53877 Aswath Damodaran
Session 17: Book Value Multiples
Look at the variables that cause book value multiples (price to book and EV to Investment Capital) to vary across companies and time.
Views: 21684 Aswath Damodaran
Crypto Currency: Hope, Hype and Hoopla!
If you define success as a surging market price, crypto currencies have been incredibly successful, with Bitcoin and Ether leading the way. However, viewed as currencies, crypto currencies have not made much headway as mediums of exchange or stores of value. I argue that that the characteristics that have made crypto currencies so attractive to traders (the volatility and large price movements) have made them unattractive to transactors, and that the promoters of crypto currencies need to change both their marketing and design focus towards making them succeed as currencies. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/CryptoCurrencies.pdf Blog Post: https://aswathdamodaran.blogspot.com/2017/08/the-crypto-currency-debate-future-of.html
Views: 21751 Aswath Damodaran