Aswath Damodaran: The 10 Key Perspectives Of Valuation

In his recent four day masterclass at Coronation Capital, Aswath Damodaran discussed corporate finance and business valuation including his ten key perspectives of valuation. Here’s the list:

1. Valuation is not a science or art, but a craft
2. Valuing an asset is not the same as pricing an asset
3. A good valuation comes with a story and numbers
4. All valuations are biased. The only question is how much and in which direction
5. Fixing uncertainty in the area of policy stability is key to addressing issues of valuation
6. For the Discounted Cash Flow Model, the choices are between the equity valuation and firm valuation
7. There are no precise valuations
8. The payoff to valuation is greatest when it is least precise
9. One’s understanding of a valuation model is inversely proportional to the number of inputs required for the model
10. Simpler valuation models do much better than complex ones