Last updated on April 19, 2020 - My Free Marketing newsletter 👀
Aswath Damodaran, known as the ‘Dean of Valuation’ is a professor of Finance at the Stern School of Business at New York University. He teaches corporate finance and equity valuation.
He has an MBA and Ph.D. and has written financial books as well as featured articles in Forbes, The Wall Street Journal, Financial Times and MANY more…
I somehow convinced him to come on the show and teach me about finance and the markets.
Aswath is first and foremost a teacher. He writes about finance to inform his thinking. He then teaches to help iron out his concepts even further. And he LOVES it.
Teaching is a craft. Not art, not science. You learn by doing, get creative. Then get better.
3 E’s of teaching:
Ways to be a better teacher:
In any crisis, liquidity is king. Companies with little debt and lots of cash will survive AND come out stronger (since competition gets wiped out).
Getting Perspective. Aswath tells students to take a step back and think what the future landscape will look like. In 2022 who will be the winners/losers from this?
The “Sleep Test”. If you’re lying awake at night wondering about what’s happening to your portfolio… You’re failing the test.
Aswath’s 4 Market Strategies.
“Less is more” is one of the oldest rules in investing. Historically, the more active the investor the worse the returns.
Pricing vs. Valuation. Two games to play in the market.
Investing is proactive, not reactive. The essence of investing is when markets make mistakes. When do markets make mistakes? When everyone’s confused and uncertain. Your chances of finding a bargain now are much greater because people are panicked.
The “Factory” Economy Analogy. Think of the economy as a factory.
Aswath taught me SO much about the markets in finance. Go check out more of his stuff for more updates and to help stay informed.
What’s one thing you learned in this episode?