Aswath Damodaran - Laws of Valuation: Revealing the Myths and Misconceptions - Nordic Business Forum

The Corporate Finance and Valuation Professor shares why companies need to accept that they go through life cycles, and explains how their focus should change in each stage of the life cycle.
Key points:
• All companies go through life cycles - they are born, they grow, they mature and they decline.
• The focus of a company needs to change as it moves through the life cycle - companies need to act as is appropriate for their age.
• The qualities of a good CEO also change in the different stages of a company’s life cycle.
• Valuation shouldn’t only be about numbers - a good valuation also has a story embedded in it.
Key questions:
• What life cycle is your company going through at the moment?
• Is your company “acting its age”?
• Is the focus of your company appropriate to its age?
• Does your valuation tell a story?
You can also find a written summary of the keynote at www.nbforum.com/event-summaries/
Bio:
Aswath Damodaran is the Kerschner Family Chair Professor of Finance at the Stern School of Business at New York University. He teaches corporate finance and valuation courses in the MBA program. He received his MBA and Ph.D. from the University of California at Los Angeles. His research interests lie in valuation, portfolio management, and applied corporate finance. He has published in the Journal of Financial and Quantitative Analysis, the Journal of Finance, the Journal of Financial Economics, and the Review of Financial Studies. He has also written four books on valuation (Damodaran on Valuation, Investment Valuation, The Dark Side of Valuation, The Little Book of Valuation), and two on corporate finance (Corporate Finance: Theory and Practice, Applied Corporate Finance: A User’s Manual).
--
This presentation took place at Nordic Business Forum 2018 on 26.-27. September in Helsinki, Finland. The event gathered together 7500 CEOs, top executives, and entrepreneurs from over 40 countries.
--
Website: www.nbforum.com
Facebook: / nbforum.fi
Twitter: / nbforumhq
Instagram: / nbforumhq
LinkedIn: / nordic-business-forum
#nbforum #nbforum2018 #nordicbusinessforum

[@Riggsnic_co]

Protecting your capital is much more important than making money. Basically because if you lose your capital, making money is much harder. ''Missing the train'' vs. ''losing your money''. There are a lot of trains, but if your money is gone, it's over.

[@hermanramos7092]

Wall Street pitched so-called quality stocks with high profitability and low debt, as a kind of insurance against whatever the economy might throw at you. Quality stocks have underperformed the S&P500 this year, My $200k portfolio is down by approximately 20 %, any recommendations to scale up my returns on investment

[@martingiavarini]

Nobody knows anything You need to create your own process, manage risk and stick to the plan, through thick or thin While also continuously learning from mistakes and improving.

[@Oly_laura]

Exactly why i enjoy market decisions being guided by a pro , seeing that their entire skillset is built around going long and short at the same time both employing risk management and market experience , been using a portfolio-coach for over 2years+ and I've netted over $3million in that time frame.

[@hermanramos7092]

@@Oly_laura Do you mind sharing info on the adviser who assisted you? I'm 39 now and would love to grow my stock portfolio and plan my retirement

[@Oly_laura]

@@hermanramos7092 My advisor is ‘’Catherine Morrison Evans’’ she’s highly qualified and experienced in the financial market. She has extensive knowledge of portfolio diversity and is considered an expert in the field. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market

[@harrisonjamie794]

We are already in a big crash Inflation is a catastrophe. This CPI report is a colossal failure. To bring the housing market to a halt, the FED will have to pull all the stops. The unfortunate issue is that other markets are being decimated. If you want to stay green, you have to rely on a lot of diversification. Currently up 14% and being careful. Still a better deal than leaving it in a savings or checking account yielding 0-1 percent interest.

[@BrunoLuke]

Whichever firm you select, make sure you get your insurance from a reputable financial adviser, such as KRISTIN GAIL CUNNINGHAM who has dedicated her career to financial planning. Because they will assist you in escalating, navigating better, and completing the task in a safer manner.

[@harrisonjamie794]

@@BrunoLuke I want to build a diversified portfolio based on my personal income. I am easily triggered/highly emotional, which could be detrimental to my portfolio. I hope I am a patient and systematic person. day trading is not for everyone and multiyear holding is not for everyone. I know my strengths that's why I need proper guidance to be able to venture

[@BrunoLuke]

@@harrisonjamie794 I have saved myself from all the hassle that chaotic market causes. These days the best way to come into the market space is by reading, studying, being patient, and seeking guidance when necessary, due to my line of work I can’t handle my portfolio so I just copy the trades of my FA. I saw her on Bloomberg business news. It’s been smooth since then.

[@harrisonjamie794]

@@BrunoLuke how can I reach this person because I am in need of a better investment approach?

[@BrunoLuke]

@@harrisonjamie794 quickly do a web check where you can connect with her, and do your research with her full name mentioned

[@t-dog6718]

KZbin really amazes me man, sometimes you watch cat videos for hours and sometimes you stumble across some life-changing peace of advices. Great Presantation! I'm a big fan of Prof. Damodaran and the incredible knowledge he's passing on👏👏

[@icanbemailed2]

:) Absolutely yes.. Just that in my case is watching elephant videos for hours.. :)

[@brbabu68]

Concepts made easy to understand through simple examples Hats off to Aswath

[@thechocolatebarfipodcast4209]

*Pieces of advice

[@Locdawg2009]

To funny but true

[@prasadvenkatesha4938]

@@icanbemailed2 v

[@chandramoulir4568]

Prof. Aswath Damodaran comes from an illustrious lineage. His paternal grand father was Sir Ramaswamy Mudaliar of the famed Arcot Twins. His parents AR Damodaran and Andal Damodaran were social entrepreneurs and founders of ARLM School of Cuddalore TN India. A proud alum of that school. 🙏

[@nilimabramhane7636]

0

[@srivathsannadathur9452]

Oh wow there is a Ramaswamy mudaliar street near my home in Chennai. Never imagined I would learn about that man from a comment in this Video after 50 years

[@raviaguva1]

It shows. Arcot Brothers were legends in their time. Ramaswamy mudaliar N Lakshmana swamy Mudaliar.

[@phoebusapollo4677]

More name dropping. How Indian of you!

[@user-oo7fe4gs4j]

Stop living in the past and names man...just learn and move on.

[@SaravananOrg]

I can't even recall when was the last time I heard a lucid delivery like this one. Hats off to him!!

[@vaibhavgupta20]

he also runs a youtube channel.

[@ajayreddy8732]

Watch some Sadhguru

[@vinodhm3369]

சிறப்பு

[@parnamsaini4751]

@@ajayreddy8732 Bettet than him, you mean?

[@parnamsaini4751]

@@vaibhavgupta20 KZbin Baba?

[@JohnLincolnUSA]

I have been an ardent fan and follower of Professor Damodaran for over 30 years. He made me a fundamentalist. Today he has evolved and thanks to him, so have I. What a brilliant mind.

[@pulakeshsaha1835]

Would love to hear from you how you channeled his knowledge into your fundamentalist approach

[@abhisekroy5434]

​@@pulakeshsaha1835 Nagarmlllll😊lopllll😊l.l ll l ki. L😊l.😊oo ll M l . Pm lpllpll😊llml ?lp.ll ok😊lol😊😊ll😊lllll.l ok ll ll LLP LLP ok ll😊 ok ll😊l ok mlll ll l Ll ollo lo ok ok l ll lol L ll ll Lo Llol Ooloo ll lol ll lllml llll lmllollllol ll ll l ll ll ll lol.lll ok llll .l Lolololll ok lol ll ll Lllllll.?😊😊😊

[@kartikpandey8739]

@@pulakeshsaha1835 Not 30 years. But I have definitely been keen about fundaments. Although, I would love to know about John's learnings, here's mine. Basically, I shut down to any thing but what is tangible, commensurate and recorded. It does involve the sheets, but also the overall past decisions in crisis and peace of the management (and do I resonate with it). I also look for any corporate relationships of the firm within and outside their industry. The meaning of fundaments to me then becomes a strong and reliable pattern of trust and familiarity with the nature of the firm. A firm is not only a legal but then living entity too.

[@Asmrani1974]

This man is a real global treasury that deserved to be glorified, he Should have been Nobel prize winner for what he has been doing

[@JSVKK]

His nickname is "the man just beyond our imagination "

[@zorbagreek5556]

Lol 😂

[@mallukittens177]

You are bs. He is just a professor teaching economics nothing special. He have done nothing in real life other than criticising companies and CEOs.

[@svpl88]

You may want to learn about what Nobels are awarded for

[@imzan3650]

When Aswath was born, Finance called him the farther!

[@TheGmanfresh]

Do you haters not understand this is the god king of equity valuation?

[@concha1011]

😂

[@sanjit_misra]

Whomst intern 🥴

[@223554545]

Dont use the term of god on a human

[@j.metzger1730]

Wow, what a convincing argument (appealing to authority is never valid). Amd by his principles all in FANG should be dieing about now. His comments about Tesla didn't age well either. Wouldn't call him a God for now. I took away good stufd from him but one shouldn't take everything he says as gospel (which actually applies to any person). Only if ypu think for yourself you will come into a position like him. He definitely didn't get there by just repeating stuff othes say like a braindead.

[@JoelChenFa]

@@j.metzger1730 The Tesla story is maybe in the "mid game" only.

[@leojmullins]

Been flowing him for years but first time I have seen him teach. Brilliant.

[@adilmarzouk5311]

a deeply passionate academic about a subject that is garnering a lot of attention: valuation.

[@damodaranvanisri]

Oh my god almost 16 years later I am listening to Professor Damodaran’s voice. How wonderfully he has aged. It was early years for KZbin. Prf. Damodaran’s full lectures existed even 15 years ago. Those days the economic students in the university used to ask ( just for fun though) If I was somehow related to him. Haha 😂

[@damodaranvanisri]

@@jagdiogan424 No no no, just the common second name😊. ( I wish I was)

[@manubhatt3]

He is The Great Madrasi Valuation Anna!

[@sudhindrakopalle7071]

Aside from his obvious mastery of the subject, his delivery is so smooth, effortless and articulate. He has been speaking in front of audiences for decades but does not take away his dominant presence on stage.

[@carscoffeeandmischief]

If this professor puts together an index fund , I’ll definitely invest in it.

[@Usman-ml4ig]

Yes, do so!This self-proclaimed guru 'valued' Tesla stock at $32 in the year 2015, and claimed the share was massively overvalued! ........ Right now, it's over $750!! 😄😄

[@shawbertocarlos2894]

@@Usman-ml4ig and a certain @Usman on KZbin is using a 2015 valuation as a metric for today 😄😄

[@jaidevnani372]

@@Usman-ml4ig Just to give some context, a company like apple had a market cap of 583 billion and it made 233 billion in revenue. Tesla, on the other hand, had made a tad over 4 billion and was valued at 31.5 billion. So at the time, it was definitely overvalued. It still is massively overvalued and their vision is being paid for as if they'll face no problems ever in the future.

[@vlrvrl4443]

@@Usman-ml4ig he values not prices

[@RusterZa]

@@Usman-ml4ig Good luck with your overvalue price, idiot

[@adityashikhar6143]

Now! Please teach this art of lecturing to my university professors as well!

[@flamingjob2]

Such an awesome presentation. Legendary. Kudos to Mr aswath.

[@roopmukherjee3006]

His confidence speaks, about his experience.. Excellent.

[@hongloannguyen190]

such a great talk I have ever seen . Thank you so much Damodaran. Wish to see you one day!

[@ShoresOfHelll]

Wow. This guys really knows how to give a lecture. Amazing.

[@ankitsharma-xc7bs]

Everything great about this lecture.

[@SamuelAVillegasA]

Thxs Proffesor. Brilliant, as usual. Once more: My respects

[@wroomauto7615]

OMG What a sound quality BEST I have heard on any YT stage video

[@tajiktexts]

Excellent as usually summary of corporate finance and valuation from the unique perspective, not taught in the textbooks.

[@turdsammich9373]

Thank you Prof. D! You explain valuation in a way that makes me think differently about valuating companies… you are definitely a gift to society! 👍

[@goodlotdupwa2961]

i just wanted to browse through but watched the entire keynote, one of the best speech I watched this year

[@HarshaYadav]

There are a lot of ways people complicate valuation but only a master can put it in such a simple way.

[@eversunnyguy]

Well said.

[@henryhill3838]

I have far too many videos in my Watch Later... This gem of a video played by accident. Absolutely amazing insight, delivery, and presentation. Thank you, Professor Damodaran!

[@djabu5821]

What an amazing delivery of much misunderstood valuation and the right ceo in the context of lifecycle. Exciting times we all live in. Thanks for sharing!

[@evinrohrbaugh8592]

The superstar of valuation!

[@nithilarajasekar5644]

Sir , you are simply amazing. God bless you

[@gideondavice3147]

It's not everytime you see a video on KZbin that you wish has no end.

[@anilpagare6611]

What an amazing way of explaining things!!!!! builds up lot of interest and surely thought provoking.

[@beast11984]

Sense and a certain style...I love listening to him!!!

[@shivargvfilm1989]

This video commands multiple watches from an amateur investor like me... I can confidently say this guy is gutsy and brilliant... This 28 mins video added new perspective to me in investing...Time will tell how well I use this information

[@josemariamateos1973]

Wonderful presentation, I loved your approach to management based on the corporate life cycle and the principle that technology companies age in "dog years".

[@preetamsingh9845]

Your way of explaining things are just wow

[@ajit8d]

man ..this is pure gold absolutely free...

[@Satnam7275]

I was perhaps blessed today that I had the opportunity to listen to Damodaran Sir.

[@GeorgetheArchitect]

Just unbelievable! No one explains like he does

[@knaraya936]

Prof Damodaran is the King of valuation and I am so happy to have found this lecture at a time when I need it most for my own Company. Thank you Dr Damodaran!

[@yoosahbiimi1338]

What a lecture... These are the people who must be watched and listened to. Great thinking human beings. Great value. Beneficial for me as an entrepreneur.

[@siddhantbhoite4667]

such a great teacher

[@paulbaker3465]

Fascinating and uplifting.Thank You

[@pratikrao22]

This is best video, must watch if you want to invest into any company. He explained very well about life cycle of business.

[@joaomadeira502]

Amazing keynote. One of the best about this topic.

[@sudhakaroryx]

Great presentation. Aswath Damodaran is truly an investment and valuation guru.

[@thetruth3322]

The simplest way to explain valuation is the Need of human, and its quantification of demand and supply in that particular time. No company is permanent or the executive. But understanding of the requirement and it's supply determines winning of the rat race.

[@lord9562]

Definitely, the BEST talk I've heard on Finance, Management, and Life in general as applied to Lifecycles !!! I'm going to talking about this A LOT to everyone I know.

[@rajeevbajaj171]

One of the best lectures on valuation based on the stage & age of a Company, by Prof. Damodaran. Awesome 👍

[@jonioscar1386]

.. immediately useful tools to valuate almost anything..thank you Prof 🙏🏻

[@Pristine_06]

Wow.. just wow..I get one day off for myself and this session is the BEST thing to happen. Pure genius and thanks for dispelling our darkness with this enlightenment.

[@vijaysarathi]

What an amazing description of Amazon!

[@mohammadsaeed3494]

I just love his way of presentation!

[@ChanduKoppineedi]

"Please God, don't let Amazon come into my business"

[@laurkids]

No words he is a great speaker with sound knowledge.

[@fredricknwogu5444]

This is the best video I have watched in ages. Very lucid presentation

[@mehedi0007]

My goodness! I was feeling I'm listening to the most beautiful music about finance! I'm an investment analyst, I never witnessed this kind of lecture or tutorial on youtube or in my university!

[@keithlgray]

Aswath Damodaran is a visionary... Love this guy!

[@sibsaurabh]

One of the best talks, I have ever seen. He was awesome, when the video ends I was like it is not 25 minutes.

[@navneetraj9393]

This dude & @Naval Ravikant is challenging the perception we have around startup and business landscape.

[@shogun_1154]

This was recommended to me so many times that I finally had to watch why was it

[@wisemanstudio]

Great video. Thanks for posting this.

[@BharatRaghavan08]

Brilliant…. When something is so lucidly explained I can only listen rapt in attention

[@talktoanandpotdar7470]

It is an outstanding effort to imbibe the elements of valuation. He is simply lucid .

[@jaredbrosn1780]

Aswath is the man! I ALWAYS learn fm this scholar.

[@sharkynet]

Valuable ..inspiring ..and funny show! Much applause to him and the organizers.. I will surely bear this in mind when starting a biz!

[@candyfloss184]

During my Mba from the premium most institute of eastern India....I used to learn from his corporate finance book. Thank you for this presentation.

[@12121sk]

[MBA] Subjects can be so interesting .. I started believing this from this lecture.!

[@swapnilkulkarni6719]

Excellent Aswath..really appreciate your wisdom

[@ps-gh3hu]

can listen to him all day long

[@000hariviv]

What an absolute legend!

[@ajubhosle]

Eyes have been opened

[@ajayranade4680]

Master class. Absolutely fantastic session..

[@ankurtitan]

Thank You for Sharing your valuable insights and helping us build our perspective with a different mindset on valuations and Corporate Cycle 🙏

[@Snair1591]

What a brilliant lecture! Because it was so simple to understand for the complexity it had. Thank you Professor!

[@TheSocialDrone]

What an amazing session! 30 minutes worth spent on KZbin!

[@hazmarfauz4793]

What a brilliant lesson on valuation! It's all about the story that drives multiples. We'll worth the 20 minutes!

[@heshanpalliyaguruge6333]

Thank you youtube for recommending me this. Long live the dean of valuation🙏❤‍🔥

[@debu_happy1363]

Such a great and insightful session!

[@groundedinfirstprinciples383]

Excellent lecture as usual.

[@orangeblock3792]

This was AMAZING!!!

[@riaj5426]

After listening..i feel blessed..thankyou so much sir...

[@nishantthomas3641]

Absolutely brilliant!

[@prateektripathi3951]

Simply amazing :)

[@sucheta8619]

I got to learn so much and git a new perspective about how to handle business in a nascent stage Thanks

[@imadarfin1485]

Aswath Damodaran, never disappoints, excellent lecture. He reminds me of Prof. Vikas Srivastava of Indian Institute of Management, Lucknow. Same type of delivery, every single word of his lecture used to be valuable.

[@DB-115]

Thought provoking lecture.

[@kanahn7402]

Thank you to the person who took the time to splice the Slides in

[@ankitagarwal9343]

I am from 2023 august and i didnt know this man but now i saw this and his predictions and i am mind boggled by the accuracy of his predictions and now i will follow his analysis see all his videos and just be obssessed with himmm

[@rameshl456]

his 25 min lecture seems a most lengthy one so meaty... hats off!!

[@nkbhutani]

Amazing. Really amazing.

[@sanjaybhatikar]

What a wonderful talk 💕

[@desighummakad1639]

Amazing person, loved his thoughts!

[@DSatyanarayan]

Very nice presentation by Damodaran sir, balance of concepts and speech

[@LDacic]

Thanks a bunch for uploading. Damodaran is fantastic, I've learned much more from his free lectures and material than in my executive education valuation course. Is there a way to get the slides in .PDF?

[@shankshweta7776]

What a beautiful video, soo much value

[@yuanfeng4194]

Flawless speech

[@rajeshbhosle7779]

Truly called 'The father of valuation' . Aswath sir has made India proud.

[@TravellingJunkey]

Thank god i stumbled upon this somehow and learned something new and informative. Though i never knew this prof. was from our country

[@johnmity]

This is incredible presentation Aswath

[@no1no1655]

Geez Louise! This guy isc Awesome. Had to speed it up to 1.25 Because his beach pattern is so slow. but Incredible wisdom here! I hope all business schools are getting this type of instruction