Aswath Damodaran - Making Sense of the Market Pt. 2 - [Invest Like the Best, EP.349]

Today’s guest is Aswath Damodaran, who is joining us for a second time on Invest Like the Best. Aswath is a Professor of Finance at NYU’s Stern School of Business and is often referred to as the Dean of Valuation for his clarity of thought on the subject. This conversation picks up where we left off 18 months ago and covers a wide range of topics from macro risks to Nvidia and the process of crafting a personal investment philosophy. Please enjoy this great discussion with Aswath Damodaran.

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Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more.

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Show Notes

(00:01:30) - (First question) - The general prevailing narrative in markets today

(00:03:45) - The biggest business implications given the current market landscape  

(00:05:30) - Why it’s bad to have risky founders with cheap capital trying experiments

(00:07:38) - The natural rate of interest and how it’s priced 

(00:08:40) - His updated view and thoughts on what’s currently driving inflation  

(00:12:20) - Macro variables that most have his attention today

(00:13:30) - The nature of the trouble that we’re all in 

(00:17:30) - Whether or not international equities will become a place of interest

(00:20:38) - The unique absolute basis of NVIDIA’s growth 

(00:22:10) - His take on the new wave of AI in a broad sense 

(00:28:00) - Trying to value AI companies without tangible business models

(00:31:30) - The parts of his own valuation process that are beyond automation 

(00:34:40) - Commonalities between investors who beat the benchmark 

(00:37:20) - Episodes on his own path that lead him towards his investment philosophy 

(00:40:50) - How he goes about valuing non-traditional companies like sports franchises 

(00:45:30) - The world of entertainment and how he sees it as a business today 

(00:52:30) - The best business models he’s ever seen 

(00:54:25) - What valuing Instacart taught him about online grocery shopping

(00:57:40) - The most interesting company he valued over the last year

(00:59:30) - A well known company he wouldn’t bother valuing using his typical model

(01:02:10) - How bank failures changed his thinking on our financial systems and banks as businesses writ large 

(01:05:00) - The changing attitude towards ESG investing 

(01:09:56) - Why there are still so many pools of capital that pursue an active strategy

(01:10:51) - Being sick and tired of the conversation always revolving around central banks

(01:14:38) - What he’s most excited to look into over the coming year

(01:16:38) - Major differences between a financial and an accounting balance sheet