We’re big fans of NYU finance professor Aswath Damodaran. In addition to being one of the foremost experts on valuation, he recently called Apple’s top and perfectly predicted how Facebook’s IPO would unfold.
We can also confirm that he’s a great lecturer. Professor Damodaran is teaching his entire MBA valuation class in 3 days at Stern Executive Education.
We attended the first day, and will bring you highlights all week.
So what’s the most dangerous sentence in finance? According to Professor Damodaran:
“They Must Know Something That I Don’t. Remember those seven words, they’re the seven most deadly words in investing and valuation. They Must Know Something That I Don’t. You know when you learn? You value a company…. You value it when the stock is at $640, you come up with a value of $200. What’s your rational side saying? Don’t buy that stock, right? Then you hear this voice… they must know something that you don’t…. And when you hear that voice, magical things start happening to your valuation. Your cash flows start to go up, your discount rates start to go down, your growth rates start to expand. $200 becomes $300 becomes $400. You will not stop until you get to $640.”
Thanks to Stern Executive Education for allowing us to attend the lecture
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