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Invest Like the Best with Patrick O'Shaughnessy

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

Invest Like the Best with Patrick O'Shaughnessy

Colossus

Technology, Business, Investing

4.7 • 2.5K Ratings

🗓️ 24 October 2023

⏱️ 82 minutes

🧾️ Download transcript

Summary

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. Listen to Founders Podcast Episode #311 James Cameron For the full show notes, transcript, and links to mentioned content, check out the episode page here. ----- This episode is brought to you by Tegus Converge — the first virtual event centered on the world of investor research. When twin brothers Tom and Mike Elnick realized that the research process for investors was broken, they founded Tegus to fix it. Now the people behind the most trusted research platform are bringing institutional investors together to investigate the state — and the future — of fundamental research. On November 8th, join industry luminaries like IGSB Founder Reece Duca and Daniel Gross, AI Expert, Entrepreneur and Investor, to dig into the latest research trends and breakthrough technologies shaping the investment landscape. Register today at tegus.com/register. ----- Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes.  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. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @patrick_oshag | @JoinColossus Show Notes (00:02:45) - (First question) - The general prevailing narrative in markets today (00:05:00) - The biggest business implications given the current market landscape   (00:06:45) - Why it’s bad to have risky founders with cheap capital trying experiments (00:08:53) - The natural rate of interest and how it’s priced  (00:09:55) - His updated view and thoughts on what’s currently driving inflation   (00:11:05) - What it’s felt like valuing companies given rates being where they are (00:13:35) - Macro variables that most have his attention today (00:18:45) - Whether or not international equities will become a place of interest (00:21:53) - The unique absolute basis of NVIDIA’s growth  (00:23:25) - His take on the new wave of AI in a broad sense  (00:29:15) - Trying to value AI companies without tangible business models (00:32:45) - The parts of his own valuation process that are beyond automation  (00:34:20) - Thoughts on a natural end state equilibrium for active management   (00:35:55) - Commonalities between investors who beat the benchmark  (00:38:35) - Episodes on his own path that lead him towards his investment philosophy  (00:42:05) - How he goes about valuing non-traditional companies like sports franchises  (00:46:45) - The world of entertainment and how he sees it as a business today  (00:53:45) - The best business models he’s ever seen  (00:55:40) - What valuing Instacart taught him about online grocery shopping (00:58:55) - The most interesting company he valued over the last year (01:03:25) - How bank failures changed his thinking on our financial systems and banks as businesses writ large  (01:06:15) - The changing attitude towards ESG investing  (01:11:11) - Why there are still so many pools of capital that pursue an active strategy (01:11:06) - Being sick and tired of the conversation always revolving around central banks (01:15:53) - What he’s most excited to look into over the coming year (01:17:53) - Major differences between a financial and an accounting balance sheet

Transcript

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0:00.0

This episode is brought to you by TIGAS, the modern research platform for leading investors and the provider of Canilist.

0:06.0

Tired of calculating fully diluted shares outstanding,

0:09.0

access every publicly reported data point and industry specific

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KPI through their database of over 4,000

0:15.7

driveable global models, hand built

0:17.8

by a team of sector-focused analysts,

0:20.4

35-plus industry comsheets, and Excel add-ins that let you use their industry-leading data in

0:25.3

their own spreadsheets.

0:26.3

Tegesis models automatically update each quarter, including hard to calculate KPIIs like

0:31.0

stock-based comp and organic growth rates, empowering investors to

0:34.3

bypass the friction of sourcing, building, and updating models. Make efficiency

0:38.1

your competitive advantage and take back your time today. As a listener you can

0:42.1

trial candlest by Tegis for free by visiting

0:44.5

Tegis.co. If you're a regular listener of my podcast I have another

0:49.7

recommendation for you. The podcast is called Founders and it's hosted by David Senra who has devoted his life to learning from history's greatest entrepreneurs.

0:58.0

Each week David distills the lessons of a different founder from Henry Ford to Cocoa to Edwin Land.

1:03.7

His recent episode on James Cameron is particularly excellent if you're looking for

1:07.9

somewhere to start.

1:08.9

I guarantee if you listen to founders you'll feel inspired to level up whatever you're working on.

1:14.1

You can find a link to founders in the show notes of this conversation and because founders is part of

1:18.6

the Colossus network you can search all the past transcripts on our website at join Colossus.com.

1:27.5

Hello and welcome everyone I'm Patrick O'Shaughnessy and this isn't best like the best.

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