TIP515: The Little Book of Valuation by Aswath Damodaran

The Investor's Podcast (We Study Billionaires) - The Investor’s Podcast Network

Stig Brodersen

Business, Education, Investing

4.6 • 3.6K Ratings

🗓️ 15 January 2023

⏱️ 55 minutes

🔗️ Recording | iTunes | RSS

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Summary

IN THIS EPISODE, YOU'LL LEARN: 00:00 - Intro 05:11 - Aswath’s two primary methods for valuing a company. 05:40 - The general truths about valuations that investors should understand. 12:38 - The four most basic inputs to valuing a company. 19:37 - How to go about setting an appropriate growth rate in our valuations. 34:11 - Additional considerations in performing valuations such as a company’s intangible assets. 47:09 - Clay’s intrinsic value assessment of Williams-Sonoma (Ticker WSM). Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences. BOOKS AND RESOURCES Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, and the other community members. Tune in to We Study Billionaires' recent episode about Warren Buffet's Money Mind, or watch the video. Listen to Clay Finck's deep dive on Peter Lynch and his book, One Up on Wall Street, or watch the video. Aswath Damodaran’s books: The Little Book of Valuation, The Dark Side of Valuation, & Applied Corporate Finance Follow Clay on Twitter. NEW TO THE SHOW? Check out our We Study Billionaires Starter Packs. Browse through all our episodes (complete with transcripts) here. Try our tool for picking stock winners and managing our portfolios: TIP Finance Tool. Enjoy exclusive perks from our favorite Apps and Services. Stay up-to-date on financial markets and investing strategies through our daily newsletter, We Study Markets. Learn how to better start, manage, and grow your business with the best business podcasts. SPONSORS Support our free podcast by supporting our sponsors: Bluehost Fintool PrizePicks Vanta Onramp SimpleMining Fundrise TurboTax HELP US OUT! Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds, and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it! Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Learn more about your ad choices. Visit megaphone.fm/adchoices Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

Transcript

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0:00.0	You're listening to TI P.
0:03.0	Hey everyone, welcome to the Investors Podcast.
0:06.0	I'm your host, Clay Fink, and on today's episode, I'm going to be giving an overview of
0:11.0	AzzWoth to Motorance Great Book called the Little Book of Valuation.
0:15.0	During this episode, I will cover AzzWoth's two primary methods to valuing a company.
0:20.0	Some general truths about evaluation that investors should understand.
0:24.0	The foremost basic inputs to valuing a company.
0:27.0	How we can go about setting an appropriate growth rate and evaluations.
0:32.0	The differences between valuing a growth company and valuing a more mature company.
0:37.0	As well as the adjustments that we need to make when valuing a company with a lot of intangible assets like many technology companies today.
0:45.0	At the end of the episode, I'll be touching on William Sonoma and why I have started A position in this company.
0:51.0	So be sure to stick around until the end to hear that pitch.
0:54.0	If you're a stock investor, learning how to value a company is a critical skill in achieving good returns.
1:01.0	I found a ton of value reading through AzzWoth's book, No Pun intended, as he is often referred to as the Dean of Valuation.
1:09.0	And he has written so much about how to properly value a company.
1:13.0	William Green actually had AzzWoth on his podcast back on episode RWH005 on the podcast feed you're on.
1:22.0	Back in April of 2022. If you tune into that episode, you know that AzzWoth is a very intelligent and gifted teacher as he has taught finance at NYU since the 1980s.
1:35.0	Additionally, AzzWoth made all of his courses free online.
1:39.0	I can assure you that there is probably no one better to learn from when it comes to learning how to properly value a company.
1:46.0	With that, I hope you enjoy today's episode covering AzzWoth to Motorance book, The Little Book of Valuation.
1:53.0	You are listening to the Investors Podcast where we study the financial markets and read the books that influence self-made billionaires the most.
2:05.0	We keep you informed and prepared for the unexpected.
	...

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