Viral Market Update XII: The Resilience of Risk Capital

[@PatrickLatini]

Thanks, Professor. I've been learning a lot throughout this series.

[@lirtowh124]

I really could have skipped my grad school and followed your series to understand it all. Sir, you are a genius!

[@DeepakSingh-hl3er]

Thanks professor Damodaran for giving such valuable information time to time.

[@joshhouseham]

Always a treat listening to these! Thanks for being so giving in your teachings Prof!

[@Economivision]

Aswath, you were a great teacher for me when I was building my foundation in this arena. I'm nearly obliged to tell you how grateful I am. I think staying true and tied to these enduring understandings have given me an advantage that a lot of folks do not possess and can't readily be seen without years of application. Another great offering you've given us here. Thank you.

[@lonestarkustomz]

Thank you for sharing your knowledge with others like myself, who do not have access to higher education that would otherwise never have recieved such an informative lessons- Dallas, TX

[@investandrise]

Thank you so much, Prof. Haven't come across a better explanation of why markets have behaved the way they have.

[@Al3j00221]

Thank you so much. Un saludo desde Colombia. Gracias por compartir todo su conocimiento, he aprendido mucho de usted.

[@lifebeyondfire4004]

Great update, Professor! Love these updates! Thank you so much!

[@dnbhattacharya343]

This is brilliant.

[@ec0n1n0thuman]

Hi Professor, you mentioned that the FED only spent $8 billion in the corporate bond market, but they did expand their balance sheet by $3 trillion buying treasuries during this period.

[@gauravmitm18]

Thank you as always professor!!

[@apscoinscurrenciesmore7599]

Great video prof. Aswath. Interesting analysis of the financial crisis😎👍

[@trevorabes5551]

The GOAT speaketh.

[@mzar62458]

and ye investith

[@yanlongfu8443]

Thanks from Shenzhen. I've learnt a lot from you, Prof. Thanks for your sharing.

[@RamanChawlaIIST]

I think the second explanation (Unique Crisis: Economy lockdown with a timer and then the markets had to somehow respond to it) is the main and only reason justifiable from this analysis. If you compare the other two explanations with the 2008 crisis, Investor's composition and availability of data have not changed that much from 2008 to 2020. Please note Prof. is comparing the availability of data and composer of this crisis with a crisis that 50 years old!. A lot to learn from you and market Prof! thanks for the sharing.

[@RajVaswaniRox]

Thank you for sharing your thoughts

[@shishirpescs]

Causality for risk investment: A lot of investors are looking to invest in companies which will likely to become dominant in post-covid world: Zoom, Chgg, Fsly to name a few. Most of such companies happen to be small, high growth companies and likely low debt since they are tech companies(less capital intense).

[@pinchedsquare]

Thank you for your perspective

[@MySipuli]

Amazing stuff.

[@PeterXian]

apparently they (risk capital) stay in the game. What can scare them away right now? given these crazy low rates and risk capital concentrating in firms that are flexible. It won't scare them away until these firms start to under deliver

[@luisespanola]

Thank you, Professor.

[@Venango53]

Brilliant, as always.

[@richardb7726]

If the investor base has changed and retail v professional are perhaps reacting differently. Has power shifted? what influence will that have going forward?

[@mzar62458]

I'd assume that institutional (professional) investors still reprsent a significant majority. Compared to the past, institutional has less power because of the retail influx.

[@user-yh8wp2ic6o]

Thank you professor!

[@YassirYHamid]

Brilliant analysis! I have a question though: during one of your interventions on CNBC you said retail investors money is too limitied to move the market, but in the end of the video you seem to suggest that retail capital is one of the three reason the market held up. Did I miss something?

[@yaseral-saffar7695]

Have small caps really outperformed large caps since the trough? I wonder whether you could interpret these groups as duration assets (rather than risk, although inherently more risky) outperforming in an even more disinflationary environment where the cost of capital falls and credit risk is very little. Are not these groups the same groups that were outperforming before the pandemic?

[@spriteNchoke]

I still think it was the Fed. They made a credible threat to intervene in the bond market but in reality, had no intention of doing so. Risk investors rejoiced thinking there was no further threat to their $$$. Good analysis though. I enjoy your videos even though I am a computer scientist.

[@mzar62458]

Right. Knowing the Fed will backstop your investment inspires confidence to look for more return (higher risk).

[@Apollo2112x1]

I think Hertz getting a massive bounce to stock price (that has somewhat stuck) when they said they were going to declare BANKRUPTCY lends an anecdotal data point that investors are more unconventional (less "institutional") these days

[@mzar62458]

In smaller companies definitely, not so much for large caps.

[@mack4704]

Respect

[@rafaelprata2012]

In 1918 the world faced the Spanish flu, the way the market behaved at the time tells us something that is happening today? Thanks.

[@shashwatapal1297]

Could you elaborate or point me to sources which can ?

[@debitcredit4279]

@@shashwatapal1297 www.google.com/amp/s/www.marketwatch.com/amp/story/market-behavior-a-century-ago-suggests-the-worst-could-be-over-for-stocks-if-not-for-the-coronavirus-pandemic-2020-03-19 This is an interesting write up.

[@moderndilemmas_]

Professor, but aren't the retail numbers much much lower than institutional investors or smaller private equities?

[@user-km2bz8iy5o]

Is there evidence to support the investor composition hypothesis?

[@user-km2bz8iy5o]

That food wholesaling and broadcasting have been the worst performing sectors is surprising

[@tuckert3431]

Is there a reason in the video you only compared 2020 to 2008?

[@mzar62458]

2008 was our most recent recession.

[@ChitranjanBaghiofficial]

So the whole economy is acting like nothing happened, has everyone gone mad or what? or maybe big players are being given time to exit before the music stops.