Photo: Bloomberg Television
Anyway, he recently got some headlines for saying that after a long time, he’s dumped his shares in Apple.
It’s not necessarily that he thinks the value is bad, but rather he says the stock has been taken over by momentum investors, and at that point, his valuation approach no longer works.
So how does Davodaran value a stock?
What’s awesome is that his NYU website is LOADED with his course material, and he encourages people to dive into it.
He even has his Introduction To Valuation presentation from his Spring 2012 course up, wherein he explains the three basic models of valuation, which are: Intrinsic Valuation (think cash flow), Relative Valuation (how a stock compares to other possible investments), and Contingent Claims Valuation (basically the option value of a stock).
This just scratches the surface of the three models, but it’s a great intro to the concepts, and from there you can learn more.