Episode 432

MI249: Stock Valuation Masterclass w/ Aswath Damodaran

Rebecca chats with Aswath Damodaran about the importance of having an investment philosophy and how to figure out what your investment philosophy is, the difference between having an investment philosophy and strategy, why Aswath believes it’s better to be a generalist than a specialist in one area of investing, what are value drivers and how to apply them in our valuation process, the 5 basic variables we need to value any business, how to convert these value drivers into a DCF or intrinsic value model, the most common mistakes investors make when valuing a company and how to avoid these, Aswath’s test on how to figure out if your growth rate is reasonable, what is the correct discount rate to use, why Aswath doesn’t believe in a “hold forever mentality” of stocks in a value investing approach, how often we should revisit our valuations for companies, how do companies get on Aswath’s radar, and much, much more!

The Intrinsic Value Podcast - The Investor’s Podcast Network

January 17, 202358m 31s

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Show Notes

IN THIS EPISODE, YOU’LL LEARN:

00:00 - Intro

03:53 - The importance of having an investment philosophy and how to figure out what your investment philosophy is.

The difference between having an investment philosophy and strategy.

03:53 - An example of what a growth investor’s investment philosophy may be, such as the famous growth investor Peter Lynch.

08:22 - Why Aswath believes it’s better to be a generalist than a specialist in one area of investing.

15:00 - What are value drivers and how to apply them in our valuation process?

15:00 - The 5 basic variables we need to value any business.

24:27 - How to convert these value drivers into a DCF or intrinsic value model.

26:23 - The most common mistakes investors make when valuing a company and how to avoid these.

26:23 - Aswath’s test on how to figure out if your growth rate is reasonable.

29:23 - How to figure out what discount rate we should use?

36:11 - Why Aswath doesn’t believe in a “hold forever mentality” of stocks in a value investing approach.

37:24 - How often we should revisit our valuations for companies?

56:53 - How do companies get on Aswath’s radar?

And much, much more!

*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Kyle and the other community members.
Check out Aswath's Website.
Check out Aswath’s YouTube Channel.
Related Episode: Listen to MI226: Investing in Small Cap Stocks w/ Rayna Lesser Hannaway, or watch the video.
Related Episode: Listen to RWH005: Meet the Master w/ Aswath Damodaran, or watch the video.

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