tag:blogger.com,1999:blog-8152901575140311047.post8624981437817648474..comments2024-03-29T03:33:47.317-04:00Comments on Musings on Markets: Valuation Myths: Young companies cannot be valuedAswath Damodaranhttp://www.blogger.com/profile/12021594649672906878noreply@blogger.comBlogger29125tag:blogger.com,1999:blog-8152901575140311047.post-31278972477399486422014-04-21T04:12:22.833-04:002014-04-21T04:12:22.833-04:00sangat menarik sekalisangat menarik sekalisepatu nike freehttp://www.stepsepatu.comnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-12824155909801577142014-02-11T01:04:35.760-05:002014-02-11T01:04:35.760-05:00Excellent post. Its really informative and useful ...Excellent post. Its really informative and useful for us. This article is an online business solution. I thinks its must be for IT related person and new freelancer. Thanks for your nice post.Fishing Rod Holdershttp://www.fishingtriptips.com/fishing-rod-holders/noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-9751847033745330102014-01-30T12:11:01.937-05:002014-01-30T12:11:01.937-05:00Value investors fail at this because they attempt ...Value investors fail at this because they attempt to determine a 'value' for the company rather than a range of values and the scenarios which drive the various elements of that range. Lulled by the sell and buy side research that touts an absolute value, price target or 'Fair Value' amount they forget that markets and companies are dynamic and a valuation is only a starting point for giving you the information you need to understand information about your investment as time elapses.<br />The Contrarian Individual Investorhttps://www.blogger.com/profile/10812447117232102268noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-14452227208174214092014-01-14T12:42:46.849-05:002014-01-14T12:42:46.849-05:00Sepatu,
That calculation is the Gordon Growth Mod...Sepatu,<br /><br />That calculation is the Gordon Growth Model that is used to project a consistent cash flow into perpetuity, which then needs to be discounted back to the present value.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-44546140858868993182014-01-13T06:35:31.174-05:002014-01-13T06:35:31.174-05:00Namaste Prof. Damodaran,
I want to know why did yo...Namaste Prof. Damodaran,<br />I want to know why did you divide the terminal FCF with risk premium percentage and then discounted it to present value? Sepatu Runninghttp://www.tokosepatumurahonline.com/noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-87612743949341807182014-01-02T07:07:09.448-05:002014-01-02T07:07:09.448-05:00Broad commodity indexes are likely to under perfor...Broad commodity indexes are likely to under perform again as surpluses burden oil, grains and metals such as copper and nickel. <br />Commodity Online Tipshttps://www.epicresearch.co/commodity-tipsnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-32734458090109055842013-12-31T02:46:02.938-05:002013-12-31T02:46:02.938-05:00This is an outstanding content with lots of inform...This is an outstanding content with lots of information! I found it very interesting .Thanks for the wonderful share.<br /><a href="https://www.epicresearch.co/commodity-tips/comex" rel="nofollow">Comex Gold Live Tips</a>Ruchi Agrawalhttps://www.blogger.com/profile/17815393718686621563noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-76792868488842354442013-12-23T10:59:40.730-05:002013-12-23T10:59:40.730-05:00I believe it is about picking stocks which have mo...I believe it is about picking stocks which have more certainty around them rather than knowing how to value a particular stock. Traditionally, young companies have a lot more to prove than a matured company which has walked the talk. It is not just about quantifying future expectations; it also is about management's ability to deliver. So in case of a company which is yet to prove it's ability to manage; "risk" taken demands higher expected return which again may be difficult to quantify while valuing.Abhishek Sinhahttp://abhishekteaches.blogspot.comnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-35243734482627629262013-12-19T03:53:00.196-05:002013-12-19T03:53:00.196-05:00The Sensex, which spurted to 21,017.45, is now dow...The Sensex, which spurted to 21,017.45, is now down 56.65 points or 0.27% at 20,803.21. The Nifty is down 23.10 points or 0.37% at 6194.05, after rising to 6263.75 at the start.<br /><br /><a href="http://www.moneycontroltips.com/" rel="nofollow">Stock tips</a><br /><a href="http://www.moneycontroltips.com/" rel="nofollow">Moneycontrol</a>Moneycontrolhttp://www.moneycontroltips.comnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-52174129953229424302013-12-18T14:12:14.116-05:002013-12-18T14:12:14.116-05:00Rule No. 1 : Do not lose money
Rule No. 2: Remembe...Rule No. 1 : Do not lose money<br />Rule No. 2: Remember rule 1<br /><br />Buffett isn't trying to be the smartest guy in the room. He isn't interested in showcasing his valuation prowess, and he probably doesn't believer he has it. He is a fool, and he knows spots, and he sticks to spots.<br /><br />He doesn't know technology companies. He knows insurance (it was explained to him by GEICO VP when WB was a young lad), he knows consumer companies, old technology like railways and brick and mortar technology companies like IBM.<br /><br />And I don't think Value Investors say its impossible to value young companies. They just said its hard for them, if smart people like you can then good, less competition for you to make money...<br /><br />Actually, Charlie Munger has said that if he was a young man, he would "get them young."<br /><br />P.S. I follow your blog religiously. You're doing an awesome job educating the public outside the classroom. KudosAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-92161358680404828972013-12-18T14:11:48.922-05:002013-12-18T14:11:48.922-05:00Rule No. 1 : Do not lose money
Rule No. 2: Remembe...Rule No. 1 : Do not lose money<br />Rule No. 2: Remember rule 1<br /><br />Buffett isn't trying to be the smartest guy in the room. He isn't interested in showcasing his valuation prowess, and he probably doesn't believer he has it. He is a fool, and he knows spots, and he sticks to spots.<br /><br />He doesn't know technology companies. He knows insurance (it was explained to him by GEICO VP when WB was a young lad), he knows consumer companies, old technology like railways and brick and mortar technology companies like IBM.<br /><br />And I don't think Value Investors say its impossible to value young companies. They just said its hard for them, if smart people like you can then good, less competition for you to make money...<br /><br />Actually, Charlie Munger has said that if he was a young man, he would "get them young."<br /><br />P.S. I follow your blog religiously. You're doing an awesome job educating the public outside the classroom. KudosAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-48472957161830865002013-12-18T14:10:59.542-05:002013-12-18T14:10:59.542-05:00Rule No. 1 : Do not lose money
Rule No. 2: Remembe...Rule No. 1 : Do not lose money<br />Rule No. 2: Remember rule 1<br /><br />Buffett isn't trying to be the smartest guy in the room. He isn't interested in showcasing his valuation prowess, and he probably doesn't believer he has it. He is a fool, and he knows spots, and he sticks to spots.<br /><br />He doesn't know technology companies. He knows insurance (it was explained to him by GEICO VP when WB was a young lad), he knows consumer companies, old technology like railways and brick and mortar technology companies like IBM.<br /><br />And I don't think Value Investors say its impossible to value young companies. They just said its hard for them, if smart people like you can then good, less competition for you to make money...<br /><br />Actually, Charlie Munger has said that if he was a young man, he would "get them young."<br /><br />P.S. I follow your blog religiously. You're doing an awesome job educating the public outside the classroom. KudosAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-65927492536229446902013-12-18T14:10:29.554-05:002013-12-18T14:10:29.554-05:00Rule No. 1 : Do not lose money
Rule No. 2: Remembe...Rule No. 1 : Do not lose money<br />Rule No. 2: Remember rule 1<br /><br />Buffett isn't trying to be the smartest guy in the room. He isn't interested in showcasing his valuation prowess, and he probably doesn't believer he has it. He is a fool, and he knows spots, and he sticks to spots.<br /><br />He doesn't know technology companies. He knows insurance (it was explained to him by GEICO VP when WB was a young lad), he knows consumer companies, old technology like railways and brick and mortar technology companies like IBM.<br /><br />And I don't think Value Investors say its impossible to value young companies. They just said its hard for them, if smart people like you can then good, less competition for you to make money...<br /><br />Actually, Charlie Munger has said that if he was a young man, he would "get them young."<br /><br />P.S. I follow your blog religiously. You're doing an awesome job educating the public outside the classroom. KudosKemorwalehttps://www.blogger.com/profile/04296554172758121642noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-65921213826966653942013-12-17T18:39:52.047-05:002013-12-17T18:39:52.047-05:00great valuation...was a treat reading this! Thank ...great valuation...was a treat reading this! Thank you Mr. Damodaran! sepatu adidas murahhttp://www.centersepatu.com/noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-23539216047748280072013-11-22T04:39:49.221-05:002013-11-22T04:39:49.221-05:00hi
there is maybe a problem with the link for the ...hi<br />there is maybe a problem with the link for the last postAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-48392104064194422412013-11-21T05:01:59.412-05:002013-11-21T05:01:59.412-05:00The annual headline inflation is expected to moder...The annual headline inflation is expected to moderate to near 5 percent as there was reasonable price stability in some major commodities, the finance minister said on Thursday.<br />P. Chidambaram made the comment in a lecture at the National University of Singapore.<br />India's wholesale price index based headline inflation rose to an eight-month high in October at 7 percent, driven by costlier fuel and manufactured goods, raising the prospect of a fresh interest rate hike.<br />stock tipshttp://www.moneycontroltips.comnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-5871365699451026902013-11-20T09:01:23.295-05:002013-11-20T09:01:23.295-05:00This blog is very good for the growth of my new si...This blog is very good for the growth of my new site, I am very grateful for many yea arrival of the owner of this blog because I am allowing the link here, to hope his boss is always healthy, amensepatu runninghttp://buysepatu.blogspot.comnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-48779487858815223122013-11-20T08:56:31.873-05:002013-11-20T08:56:31.873-05:00A good post, thank you for that!
And I also liked ...A good post, thank you for that!<br />And I also liked the model used for evaluating Tesla and Twitter. <br /><br />I would though have a question regarding the calculus behind.<br /> Where are the finance cost and equity impact of the losses for the 9 years taken into account? <br /><br /> You were calculating with negative cash-flow for both businesses for 9-10 years. These losses will have to be financed either by equity or by debt at the companies, both of them would mean less equity for present owners and maybe additional costs. Is it taken into account? <br /><br />Thank you!Laszlonoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-21782026653476765792013-11-19T17:30:41.000-05:002013-11-19T17:30:41.000-05:00I am curious which text states that intrinsic valu...I am curious which text states that intrinsic value is static? Even Graham was very careful around this issue. I am pretty sure Buffett, Graham, Dodd, Munger, et al don't believe that is true...<br /><br />A value investor isn't just looking for a bargain, he is looking for a bargain with a substantial margin of safety... something you can build a confidence interval around. Now when value investors claim they "don't understand" or "don't invest in" technology-- does that mean they are dumber than the rest of us? They just don't get it? No, it just means they can't build in a margin of safety in a confidence interval they are comfortable with. And anyone who says they can predict Facebook's next 5-10 years with confidence (with greater certainty than Exxon Mobil or Coca Cola) is lying or dumb. <br /><br />A value investor is looking for an investment that he can hold while going to a remote island for a decade and not have to worry about it.<br /><br />Mohnish Pabrai says there are 4 types of investments: low risk, low uncertainty; low risk, high uncertainty; high risk, low uncertainty; and high risk high uncertainty. His Dhando Investor is about the pursuit of these low risk, high uncertainty investments.<br /><br />Or take it from the Munger angle-- similar to the pari-mutuel bet at the race track: "It's like looking for a horse that pays 50/50 and has a 3-to-1 chance of winning."mhayonnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-89975852631849028912013-11-19T17:30:27.380-05:002013-11-19T17:30:27.380-05:00I am curious which text states that intrinsic valu...I am curious which text states that intrinsic value is static? Even Graham was very careful around this issue. I am pretty sure Buffett, Graham, Dodd, Munger, et al don't believe that is true...<br /><br />A value investor isn't just looking for a bargain, he is looking for a bargain with a substantial margin of safety... something you can build a confidence interval around. Now when value investors claim they "don't understand" or "don't invest in" technology-- does that mean they are dumber than the rest of us? They just don't get it? No, it just means they can't build in a margin of safety in a confidence interval they are comfortable with. And anyone who says they can predict Facebook's next 5-10 years with confidence (with greater certainty than Exxon Mobil or Coca Cola) is lying or dumb. <br /><br />A value investor is looking for an investment that he can hold while going to a remote island for a decade and not have to worry about it.<br /><br />Mohnish Pabrai says there are 4 types of investments: low risk, low uncertainty; low risk, high uncertainty; high risk, low uncertainty; and high risk high uncertainty. His Dhando Investor is about the pursuit of these low risk, high uncertainty investments.<br /><br />Or take it from the Munger angle-- similar to the pari-mutuel bet at the race track: "It's like looking for a horse that pays 50/50 and has a 3-to-1 chance of winning."mhayonnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-23810337967158492022013-11-19T17:29:51.776-05:002013-11-19T17:29:51.776-05:00I am curious which text states that intrinsic valu...I am curious which text states that intrinsic value is static? Even Graham was very careful around this issue. I am pretty sure Buffett, Graham, Dodd, Munger, et al don't believe that is true...<br /><br />A value investor isn't just looking for a bargain, he is looking for a bargain with a substantial margin of safety... something you can build a confidence interval around. Now when value investors claim they "don't understand" or "don't invest in" technology-- does that mean they are dumber than the rest of us? They just don't get it? No, it just means they can't build in a margin of safety in a confidence interval they are comfortable with. And anyone who says they can predict Facebook's next 5-10 years with confidence (with greater certainty than Exxon Mobil or Coca Cola) is lying or dumb. <br /><br />A value investor is looking for an investment that he can hold while going to a remote island for a decade and not have to worry about it.<br /><br />Mohnish Pabrai says there are 4 types of investments: low risk, low uncertainty; low risk, high uncertainty; high risk, low uncertainty; and high risk high uncertainty. His Dhando Investor is about the pursuit of these low risk, high uncertainty investments.<br /><br />Or take it from the Munger angle-- similar to the pari-mutuel bet at the race track: "It's like looking for a horse that pays 50/50 and has a 3-to-1 chance of winning."mhayonnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-72174818985637081382013-11-19T12:53:36.715-05:002013-11-19T12:53:36.715-05:00isn't valuation done on an "as is" b...isn't valuation done on an "as is" basis? which means with any additional information my assumptions about,and the value of a company can dramatically transform. This is especially true for companies in distress and young companies. People also usually shift between being traders and investors based on their beliefs and how their portfolio is performing relative to their opinions.It's all convenience!UniverseofRisksnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-38163918232899511362013-11-19T12:01:52.617-05:002013-11-19T12:01:52.617-05:00Blog posts, now are not being delivered to my emai...Blog posts, now are not being delivered to my email - is there anything that needs to be done?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-42856734172892894022013-11-18T14:47:04.079-05:002013-11-18T14:47:04.079-05:00Prof Damodaran: "Good point but who would we ...Prof Damodaran: "Good point but who would we look at?"<br /><br />That's easy: your own work, and that of your students. You have the potential to build a database like no other. After all, don't your courses teach students how to value exactly these types of situations?<br /><br />Do they systemmatically undervalue or overvalue companies, for example? Do they do better in some areas compared to others. e.g. cyclicals versus small growth companies, or option-like environments?<br /><br />MarkAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-52122111018293007302013-11-18T13:48:33.842-05:002013-11-18T13:48:33.842-05:00Prof,
Why do you use Free cash flows = EBIT (1-t)...Prof,<br /><br />Why do you use Free cash flows = EBIT (1-t) * (1-Reinvestment rate)?<br /><br />Reinvestment rate includes positive effect of depreciation also because Reinvestment = Capex – Depreciation + Change in working capital.<br /><br />Since EBIT is calculated after depreciation which is a positive cash flow, wouldn’t doing EBIT (1-t) * (1-Reinvestment rate) to get FCF will make FCF lower, i.e. effect of depreciation not considered?<br /><br />-SP<br />Anonymousnoreply@blogger.com