Equity risk premium is core to understanding long-term market returns, says NYU's Aswath Damodaran

Aswath Damodaran, professor of finance at NYU Stern School of Business, joins 'Squawk on the Street' to discuss why investors should pay closer attention to equity risk premiums, how equity risk premiums help gauge future market health, and more. For access to live and exclusive video from CNBC subscribe to CNBC PRO: cnb.cx/2NGeIvi
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[@jessicasquire]

I genuinely mean it when I express my stress and concern regarding the market crash and high inflation, particularly in relation to my retirement. I have been experiencing losses for quite some time, and while some may argue that crises can present opportunities, I am feeling overwhelmed. However, I understand that investing is a long-term endeavor, and it is crucial to maintain focus on the bigger picture and the long run.

[@Erikkurilla01]

Considering that I am only three years away from retirement, it becomes challenging for me to solely concentrate on the long-term perspective. Despite having invested in reputable companies and having a significant amount of funds allocated, my profits have been stagnant. This situation raises the question: Does the current recession and unstable market offer any calculated risk opportunities for generating profits?

[@Lemariecooper]

In a downturned market, numerous strategies exist that can potentially yield lucrative profits. However, executing such sophisticated trades requires the expertise of seasoned market professionals

[@jessicasquire]

@@Lemariecooper I have experienced significant losses, and I am holding on with the hope of recovering them. It is evident that I am in dire need of assistance. Could you please share the name of the investment adviser who guides you?

[@Lemariecooper]

@@jessicasquire Absolutely! Within a span of less than a year, I witnessed remarkable progress after following the guidance of *STEPHANIE KOPP MEEKS* . Beginning with an initial investment of less than $100,000, I am now just $18,000 away from reaching a quarter million dollars

[@jessicasquire]

@@Lemariecooper It seems that *STEPHANIE KOPP MEEKS* possesses extensive knowledge and a strong educational background. After conducting a Google search of her name, I discovered her website. Thank you for providing this information.

[@alexsoccer1196]

Aswath one of the best analysts I always listen to carefully.

[@kokits]

what a guy...full of charisma

[@jasonrichman2726]

The professor is spot on! I watched several of Dr. Damodaran's videos. He's the subject matter expert in valuation and deriving precise estimates. Excellent information adding illiquidity premiums to specific assets or a specific exchange.

[@yangbomb2]

If a guest doesn't say anything extremely bullish, look at their faces. "Why..Why are you so negative?", it's not being negative. It's being cautious. What a smart man. He sold what he gained from the first half run up and being cautious. That's what balanced investing is about.

[@eliefeinstein6182]

He just undermined the entire existence of CNBC lol

[@MsVimarsha]

Ashwarth is one of the smarter guys out there ..

[@wm6549]

They should address him as Professor not by his first name. Show the man some respect!

[@crazyfox5858]

more of him please

[@Theamanhanda]

Aswath is always great to listen too

[@dbsk06]

Damodaran ❤

[@yuvraj94]

The best out there

[@moosesnWoop]

what a legend

[@adhirajmukherjee8455]

what a guy!

[@limitlessmaster659]

Listen to aswath for top tier market wisdom 🙏

[@JC-21470]

Blew up CNBC talking head ! luv it!

[@JC-21470]

100% correct, market going down! Duh!

[@helpme100]

❤

[@helpme100]

Ashwini

[@felixpope6073]

What is the name of this guy?

[@pauls064]

Wtf it’s right in the title. And it’s possibly the most famous man in investing besides buffet.

[@theharsh2005]

Awfully rude anchor, while Professor shows humility

[@knowthenewz903]

I'll one up that and point out that inflation and the risk free rate are about the same right now, so in inflation adjusted terms nobody is actually making money from treasuries, whereas firms have revenue and earnings that can, over time, adjust to inflation. In the same way we shouldn't look at P/E ratios and earnings yield without looking at the risk free rate, we shouldn't look at the return on treasuries without adjusting for inflation.

[@estring123]

i love aswath

[@strongforce79]

AI can't pay a dividend 😂 love it. The Pump and Dumpers are like damn this guy is no Joke😂

[@marcelmuller7623]

How does he calculate 4,4%? Earnings Yield of S&P minus 10-year US bond yield give you less than 1% equity risk premium...

[@Mumbaiwestbengal96]

May be you have to add dividend yield to the earning yield and subtract that with the long term T bill.

[@vtnarkiv]

good question you gotta add credit risk/spreads premium and also add in relative to debt premium(for investing in equity over debt i.e bonds). its somewhere in his book i forget where. cnbc ugh....ask right questions n let prof ashwath speak div yield is already included(future cashflow discounted) so don't worry bout it. this is bout premiums(ie beta)

[@user-ys5qp4bq4s]

kzbin.info/www/bejne/oH-yYZqmlqukbNE

[@user-ys5qp4bq4s]

allright youtube is now deleting comments without notification like gdmn ccp great

[@user-ys5qp4bq4s]

I don't know what triggers the algorithm so I'll have to be brief here: in the 2001 recession the consensus was revised down from 70 to 45. on sp500squiggles.

[@chrisreynolds6391]

His shirt makes him look so much more Indian. He usually dresses like a Californian.

[@mygic183]

That girl’s rude

[@Tendomcgoobin]

ur rude

[@Luckboxrr]

all women are rude...western women are the most privileged class of people in the world, slightly behind rich men

[@bsdrvr1]

She’s confident and competent. I like that.

[@mygic183]

@@Tendomcgoobin look at her interview with Linda Yaccarino, completely disrespectful and rude

[@harrychu650]

Hard to disagree with Aswath Damodaran's view on market timers. Statistically, market timers always underperform investors, yet these markets are packed full of market timers. As Buffett once said, the purpose of market timers is to make fortune tellers look good.

[@strongforce79]

If everybody has it nobody has it 😂

[@roflwoflofl]

Jesus he is so credible

[@user-xw6gr1dq2f]

The girl looks like she is the boss of the media agency and doesn't show the due respect to aswath. Considering his work you shouldn't be so casual!

[@xst9880]

I enjoyed the Professor schooling these CNBC clowns 🤣

[@lokesh303101]

Equity Risk is taken on Market Capitalization. AI is not the Cost or Premium or some sort of Equity for Entry Point as its an Essential Service based Revenue because it's nothing but a source.

[@aguyinavan6087]

Sorry, but Aswath has this wrong. You don't have to sell A.I.. All you have to do is use it to reduce your bottom line. You can produce the same products, just far more efficient. The reduction of labor costs will increase EPS, and every company in the world is just figuring out how to apply this new tool to their work flows, supply chains, etc. etc.

[@keimo2007]

I think his understanding of AI is somewhat limited.

[@pauls064]

I think your understanding of him is somewhat limited…

[@yanjieji8452]

Over the 10 years...then none of what you've said is helpful for today...the whole thing is a nothing burger.

[@mikenewman9959]

she was rude to tell him to basically shut up and predict the next market movement already. that blond host needs to watch how she speak to guests. the guest nailed it on the head about how if everybody has ai then no one has an edge.

[@user-ot4ul5if4l]

High yield saving 5% is better … lol