Damodaran's Market Thoughts On The Crisis
The Dean of Valuation talks about the current crisis, teaching & investments
A very nice talk Noah Kagan had with one of my favorite “must reads” and “must listens”, NYU professor Aswath Damodaran.
Kagan thoughtfully zeroed in with summary notes including:
Set aside the “FANG” label, and focus on the cash. Apple has cash.
Damodaran has 4 investment buckets for everyone to use.
(I like Kagan’s use of tacos in this graphic. I like tacos.)
Taco #1 is the old school investment of the Ben Graham Margin of Safety school.
Taco #2 is the temporarily discounted growth rocket. They blow up or go to the moon.
Taco #3 is personal favorite: the fortress of cash solitude the size of nation states.
Taco #4 are the disruptors of social behavior. Maslow’s hierarchy solved in new ways.
I see one thing in common between all of these different approaches: the idea of “lumpy returns”. Each of these techniques produce positive returns but they are not investments with perennial ATM like returns. Their returns will be uneven: lumpy.
Looking to the future Damodaran asks how will societal habits change?