BusinessEntrepreneurshipEducation

Aswath Damodaran

I teach corporate finance, valuation and investment philosophies at the Stern School of Business at New York University. I have online versions of all three courses here, as well as other finance-related videos.
1. The Corporate Finance Online playlist has an introductory video and 36 sessions that cover all of corporate finance (at least as I see it).
2. The Valuation playlist has 25 sessions that cover valuation approaches, issues and questions.
3. The Investment Philosophies playlist has sessions that cover different investment philosophies.
4. The Accounting and Statistics playlists reflect my quirky and unorthodox introductions to two disciplines that are critical to my valuation and corporate finance classes.
5. The Blog Posts playlist has sessions that go wit my blog posts and reflect my standing as a dabbler, rather than expert, in all things finance-related.
If you need the supporting material for any of the classes, check the links below.

Links:
Corporate finance materials: http://www.stern.nyu.edu/~adamodar/New_Home_Page/corpfin.html
Valuation materials: http://www.stern.nyu.edu/~adamodar/New_Home_Page/equity.html
Investment Philosophies: http://www.stern.nyu.edu/~adamodar/New_Home_Page/invphil.htm
Books: http://www.stern.nyu.edu/~adamodar/New_Home_Page/public.htm
My website: http://www.damodaran.com

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October 13 · 1 hr 39 min
Session 13: More on stories and first valuations
In this class, we continued our discussion of stories, and how critical it is to keep the feedback loop open, so that you can make your stories better. We also talked about how story breaks, shifts and changes. Since I talked about dealing with new earnings reports, I thought you may find these two posts of interest in how narratives shift, and with them, values: Reacting to Earnings Reports: http://aswathdamodaran.blogspot.com/2014/08/reacting-to-earnings-reports-lets-get.html Narrative Resets: http://aswathdamodaran.blogspot.com/2015/08/narrative-resets-revisiting-tech-trio.html We started with a conventional valuation of Con Ed in class, but we will move to more interesting storylines and valuations next class. Start of the class test: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/storytest.pdf Slides: https://www.stern.nyu.edu/~adamodar/podcasts/valspr23/session13slides.pdf Learn more about your ad choices. Visit megaphone.fm/adchoices
October 13 · 19 min
Data 2017 Update 4: Country Risk
To do corporate financial analyses or value companies, you have to grapple with and come up with a way of incorporating country risk that goes beyond looking at where a company is incorporated. In this session, I go through my approach for measuring country risk and bringing it into equity risk premiums. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/dataupdate4.pdf Blog Post: Data links: Sovereign ratings: http://www.stern.nyu.edu/~adamodar/pc/blog/sovrRatingsJan17.xls Sovereign CDS spreads: http://www.stern.nyu.edu/~adamodar/pc/blog/sovrCDSJan17.xls PRS Scores: http://www.stern.nyu.edu/~adamodar/pc/blog/PRSJan17.xls ERP & CRP by country: http://www.stern.nyu.edu/~adamodar/pc/datasets/ctryprem.xls Learn more about your ad choices. Visit megaphone.fm/adchoices
October 13 · 1 hr 26 min
Session 15: More on story telling and first valuations
In this class, we continued our discussion of stories, and how critical it is to keep the feedback loop open, so that you can make your stories better. We also talked about how story breaks, shifts and changes. Since I talked about dealing with new earnings reports, I thought you may find these two posts of interest in how narratives shift, and with them, values: Reacting to Earnings Reports: http://aswathdamodaran.blogspot.com/2014/08/reacting-to-earnings-reports-lets-get.html Narrative Resets: http://aswathdamodaran.blogspot.com/2015/08/narrative-resets-revisiting-tech-trio.html We started with a conventional valuation of Con Ed in class, but we will move to more interesting storylines and valuations next class. Start of the class test: https://pages.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/dcfintro.pdf Slides: https://pages.stern.nyu.edu/~adamodar/podcasts/valUGspr23/session15slides.pdf Learn more about your ad choices. Visit megaphone.fm/adchoices
October 12 · 1 hr 37 min
Session 14: Equity Analysis, Acquisition Valuation and NPV vs IRR
We started this session by looking at to how taking an equity perspective can alter how you measure returns and cash flows, and alter the hurdle rate you use, using an iron ore project for Vale as illustration. We also looked looked at an acquisition as a really big project, and argued that the same rules should apply to acquisitions as to regular projects. The cash flows should include any side benefits and costs and the cost of capital you use should reflect the risk of the project (target company), not the entity looking at the project (acquiring firm). We moved on to comparing NPV versus IRR as decision rules, and why they might yield different answers for mutually exclusive projects, of both same and different lives. Slides: https://pages.stern.nyu.edu/~adamodar/podcasts/cfspr23/session14slides.pdf Post class test: https://pages.stern.nyu.edu/~adamodar/pdfiles/cfovhds/postclass/session14test.pdf Post class test solution: https://pages.stern.nyu.edu/~adamodar/pdfiles/cfovhds/postclass/session14soln.pdf Learn more about your ad choices. Visit megaphone.fm/adchoices
October 12 · 21 min
Data 2017 Update 3: Cracking the Currency Code
When valuing a company, especially one with operations in many countries, you are faced with the challenge of what to do about currency. Which currency should you pick to value the company in and how will the value change as you switch currencies. I make the argument in this session that if you are consistent in your currency treatment, your valuations should be invariant to currency. I also report on how risk free rates, inflation and real growth vary across countries at the start of 2017. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/dataupdate3.pdf Blog Post: http://aswathdamodaran.blogspot.in/2017/01/january-2017-data-update-3-cracking.html Data sets: 1. Government Bond Rate & Risk free rate by currency: http://www.stern.nyu.edu/~adamodar/pc/blog/currencyriskfree2017.xlsx 2. Fundamental Risk free rate by currency: http://www.stern.nyu.edu/~adamodar/pc/blog/FundCurrencyRiskfree2017.xlsx 3. Cost of capital for global industries, with currency converter. http://www.stern.nyu.edu/~adamodar/pc/blog/waccGlobalPost.xlsx Learn more about your ad choices. Visit megaphone.fm/adchoices
October 12 · 1 hr 34 min
Session 14: Valuing the Market and Young Companies
We started class today with a, model to value an index (the S&P 500). If you are interested in an updated version, where you can change the numbers try this link: https://pages.stern.nyu.edu/~adamodar/pc/blog/S&P500ValueJan2023.xlsx We then looked at valuing young companies, with the focus on Amazon. If you are interested in how best to adapt valuation models to value companies on the dark side. Specifically, we examined how best to value young companies with limited information. If you are interested, try this paper on valuing young companies: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1418687 I also have a blog post that you may find relevant for today’s discussion on how dilution in future years is already incorporated into value: http://aswathdamodaran.blogspot.com/2018/07/share-count-confusion-dilution-employee.html Start of the class test: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/dcfvaltests.pdf Slides: https://www.stern.nyu.edu/~adamodar/podcasts/valspr23/session14slides.pdf Post class test: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session14Ctest.pdf Post class test solution: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session14Csoln.pdf Learn more about your ad choices. Visit megaphone.fm/adchoices
October 12 · 16 min
Data 2017 Update 2: The US Markets in 2016
If there is a word to describe US markets in 2016, it is that they were resilient. Not only did they weather the concerns about the Fed raising rates and slowing growth in China but they bounced back from the political surprises of Brexit and the US election. In this session, I take a look back at 2016 and at where stocks and bonds stand, entering 2017. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/dataupdate2.pdf Blog Post: Learn more about your ad choices. Visit megaphone.fm/adchoices
October 11 · 1 hr 20 min
Session 16: Valuing companies across the life cycle
We started class today with a, model to value an index (the S&P 500). If you are interested in an updated version, where you can change the numbers try this link: https://pages.stern.nyu.edu/~adamodar/pc/blog/S&P500ValueJan2023.xlsx We then looked at valuing young companies, with the focus on Amazon. If you are interested in how best to adapt valuation models to value companies on the dark side. Specifically, we examined how best to value young companies with limited information. If you are interested, try this paper on valuing young companies: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1418687 I also have a blog post that you may find relevant for today’s discussion on how dilution in future years is already incorporated into value: http://aswathdamodaran.blogspot.com/2018/07/share-count-confusion-dilution-employee.html In the last part of the class, we talked about valuing mature companies in transition and declining companies. Start of the class test: https://pages.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/dcfvaltests.pdf Slides: https://pages.stern.nyu.edu/~adamodar/podcasts/valUGspr23/session16slides.pdf Post class test: https://pages.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session16DXtest.pdf Post class test: https://pages.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session16DXsoln.pdf Learn more about your ad choices. Visit megaphone.fm/adchoices
October 11 · 11 min
Narrative and Numbers: A number cruncher learns to tell stories!
My newest book, Narrative and Numbers: The Value of Stories in Business is now out in bookstores. I explain what I try to do in the book and I hope that you get a chance to read it (and enjoy it). Amazon link to book: https://www.amazon.com/Narrative-Numbers-Business-Columbia-Publishing/dp/0231180489 Columbia University Press link: https://cup.columbia.edu/book/narrative-and-numbers/9780231180481 Website for the book: http://people.stern.nyu.edu/adamodar/New_Home_Page/numbers&narrative.htm Learn more about your ad choices. Visit megaphone.fm/adchoices
October 11 · 1 hr 29 min
Session 15: More excursions on the dark side of valuation
In this session, we continued on the dark side of valuation with a look at mature companies on the verge of transitions, and how you have to value the status quo company and the restructured one to make a judgment on investing in it. We then moved on and looked at declining companies, where your forecasts may have to show declining revenues and margins, and added a twist with distressed companies, where you have to follow up your DCF. In the second half of the class we examined the issues (country risk, cross holdings and currency gyrations) that are part of emerging market company valuations and began our assessment of why banks pose special challenge in valuation. Start of the class test: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/dcfvaltests2.pdf Slides: https://www.stern.nyu.edu/~adamodar/podcasts/valspr23/session15slides.pdf Post class test: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session15Ctest.pdf Post class test solution: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session15Csoln.pdf Learn more about your ad choices. Visit megaphone.fm/adchoices
October 11 · 23 min
Data 2017 Update 1: The Promise and Perils of Data
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October 10 · 1 hr 25 min
Session 17: More excursions on the Dark Side of Valuation
In today’s session, we continued on the dark side of valuation with a look at mature companies on the verge of transitions, and how you have to value the status quo company and the restructured one to make a judgment on investing in it. We then moved on and looked at declining companies, where your forecasts may have to show declining revenues and margins, and added a twist with distressed companies, where you have to follow up your DCF. In the second half of the class we examined the issues (country risk, cross holdings and currency gyrations) that are part of emerging market company valuations and began our assessment of why banks pose special challenge in valuation. In particular, we valued Deutsche Bank in October 2016, and if you are fascinated with this horror story, you may want to read this post from the time: https://aswathdamodaran.blogspot.com/2016/10/deutsche-bank-greek-tragedy-at-german.html tart of the class test: https://pages.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/dcfvaltests2.pdf Slides: https://pages.stern.nyu.edu/~adamodar/podcasts/valUGspr23/session17slides.pdf Post class test: https://pages.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session17Dtest.pdf Post class test: https://pages.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session17Dsoln.pdf Learn more about your ad choices. Visit megaphone.fm/adchoices
October 10 · 1 hr 34 min
Session 15: The Tesla Bot Case and Side Benefits/Costs in Projects
The bulk of this session was spent discussing the Tesla Bot case (see below for the case) and the broader implications for investment and valuation. In the last 30 minutes of class, we turned our attention to the side costs and side benefits in projects, including opportunity costs and synergies and how to incorporate them into decisions. (I am sorry, but I screwed up on sharing the slides for this section for the first 15 minutes or so, but the link to the slides is below as well). Tesla Bot Case: https://pages.stern.nyu.edu/~adamodar/pdfiles/cfexams/TeslaBots.pdf Tesla Bot Presentation: https://pages.stern.nyu.edu/~adamodar/pdfiles/cfexams/TeslaBotPresentation.pdf Slides for rest of class: https://pages.stern.nyu.edu/~adamodar/podcasts/cfspr23/session15slides.pdf Post class test: https://pages.stern.nyu.edu/~adamodar/pdfiles/cfovhds/postclass/session15test.pdf Post class test solution: https://pages.stern.nyu.edu/~adamodar/pdfiles/cfovhds/postclass/session15soln.pdf Learn more about your ad choices. Visit megaphone.fm/adchoices
October 10 · 26 min
Active Investing: Rest in Peace or Resurgent Force?
When Jack Bogle started the Vanguard 500 Index fund in 1975, I am sure that he never visualized how successful he would be. In the last few decades, passive investing has widened its offerings (to include ETFs and other markets) and has taken away market share from active investing, but the pace of disruption seems to have quickened in the last decade. The best advertising for passive investing is the performance of active investors, who seem to lag their passive counterparts, across time, style classes and geographies. I argue that active investing is destined to shrink as a business and that while there are potentially dangerous consequences to the rush to passive investing, the process has its own correction mechanisms. Finally, even in the face of the evidence to the contrary, I explain my rationale for staying an active investor. Slides: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/activeinvesting.pdf Blog Post: http://aswathdamodaran.blogspot.com/2016/12/active-investing-rest-in-peace-or.html Learn more about your ad choices. Visit megaphone.fm/adchoices
October 10 · 54 min
Session 16: Closure on Investment Analysis
In this quiz shortened session, after the quiz, we looked at the final pieces on investment analysis, starting with side benefits from projects (from small pluses to synergy in acquisitions). We also looked at optionality in projects, i.e., times when you can legitimately override conventional investment metrics to take a project, because you may have the option to delay, expand or abandon the project. We then looked back at the process of analyzing projects in place, either for accountability (review forecasts versus actuals) and for decision making (continue, abandon or expand the project). Slides: https://pages.stern.nyu.edu/~adamodar/podcasts/cfspr23/session16slides.pdf Post class test: https://pages.stern.nyu.edu/~adamodar/pdfiles/cfovhds/postclass/session16atest.pdf Post class test solution: https://pages.stern.nyu.edu/~adamodar/pdfiles/cfovhds/postclass/session16asoln.pdf Learn more about your ad choices. Visit megaphone.fm/adchoices
October 9 · 1 hr
Session 16: Tying up Intrinsic Value
In this session, after the second quiz, we wrapped up our discussion of intrinsic valuation. For decades, we have valued banks using the dividend discount model, simply because getting cash flows is so difficult, but that approach is built on trusting management at banks to behave sensibly (paying out what they can afford to in dividends) and regulators to do the same. For me, that trust was breached in 2008, and I present a way of estimating FCFE for a bank, using investment in regulatory capital as my stand in for reinvestment. Next session, we will wrap up the valuation section and start on pricing. If you are interested in reading more about valuing financial service companies, try this link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1798578 The Deutsche Bank post is here: http://aswathdamodaran.blogspot.com/2016/10/deutsche-bank-greek-tragedy-at-german.html With SVB’s collapse, which was triggered by duration mismatch, there might be a new iteration that I have to try to bring in that risk into the valuation. We also looked at valuing commodity and cyclical companies, and why capitalizing R&D can change the value of a pharmaceutical company. Slides: https://www.stern.nyu.edu/~adamodar/podcasts/valspr23/session16slides.pdf Post class test: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session16Ctest.pdf Post class test solution: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session16Csoln.pdf Learn more about your ad choices. Visit megaphone.fm/adchoices
October 9 · 49 min
Session 18: Tying up Intrinsic Value
In this session, after the second quiz, we wrapped up our discussion of intrinsic valuation. For decades, we have valued banks using the dividend discount model, simply because getting cash flows is so difficult, but that approach is built on trusting management at banks to behave sensibly (paying out what they can afford to in dividends) and regulators to do the same. For me, that trust was breached in 2008, and I present a way of estimating FCFE for a bank, using investment in regulatory capital as my stand in for reinvestment. Next session, we will wrap up the valuation section and start on pricing. If you are interested in reading more about valuing financial service companies, try this link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1798578. We also looked at valuing commodity and cyclical companies, and why capitalizing R&D can change the value of a pharmaceutical company. Slides: https://pages.stern.nyu.edu/~adamodar/podcasts/valUGspr23/session18slides.pdf Post class test: https://pages.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session18Dtest.pdf Post class test: https://pages.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session18Dsoln.pdf Learn more about your ad choices. Visit megaphone.fm/adchoices
October 9 · 1 hr 34 min
Session 23: The Options to Expand and Abandon, Financial Flexibility and Distressed Equity
We started this class by looking at the option to expand, where your capacity to enter or expand into new (big) markets can justify up-front bad investments and then at the option to abandon poorly performing investments. We then valued financial flexibility as an option, and argued that it was worth more to capital-constrained companies with unpredictable and high-value-added investments. We continued with our examination of equity in trouble, debt-laden companies. Given that the equity in these companies takes on the characteristics of an option, we teased out three implications: The equity in these companies will be valued as out-of-the-money options are and not as conventional stocks. Thus, they will retain their value, even in the face of daunting debt, and will become more valuable as the risk in the business increases and with longer term debt. Start of the class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/realoptions2mod.pdf Slides: http://www.stern.nyu.edu/~adamodar/podcasts/valfall16/valsession23.pdf Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session23test.pdf Post class test solution: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session23soln.pdf Learn more about your ad choices. Visit megaphone.fm/adchoices
October 9 · 1 hr 32 min
Session 17: The Financing Mix Trade off
In this class, we started our discussion of the financing question by drawing the line between debt and equity: fixed versus residual claims, no control versus control, and then used a life cycle view of a company to talk about how much it should borrow. We then started on the discussion of debt versus equity by looking at the pluses of debt (tax benefits, added discipline) and its minuses (expected bankruptcy costs, agency cost and loss of financial flexibility). Even with the general discussion, we were able to look at why firms in some countries borrow more than others, why having more stable earnings can make a difference in how much you can borrow and why having intangible assets can affect your borrowing capacity. Slides: https://pages.stern.nyu.edu/~adamodar/podcasts/cfspr23/session17slides.pdf Post class test: https://pages.stern.nyu.edu/~adamodar/pdfiles/cfovhds/postclass/session17test.pdf Post class test solution: https://pages.stern.nyu.edu/~adamodar/pdfiles/cfovhds/postclass/session17soln.pdf Learn more about your ad choices. Visit megaphone.fm/adchoices
October 8 · 58 min
Session 22: The Option to Delay
In this shortened session after the webcast, we looked at the option to delay and applied it to valuing patents and undeveloped natural resource reserves. Slides: http://www.stern.nyu.edu/~adamodar/podcasts/valfall16/valsession22.pdf Post class test: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session22Atest.pdf Post class test solution: http://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session22Asoln.pdf Learn more about your ad choices. Visit megaphone.fm/adchoices

Showing 61–80 of 215 episodes