Valuation Course by Aswath Damodaran (Part I)

Aswath Damadoran, a.k.a "dean of valuation", is a thought-leader in finance. You can often see him on CNBC commenting on the state of the markets. Many are not aware of his outstanding teaching skills and generosity in sharing teaching materials: you can actually take his classes online for free. 

I wanted to dig into his most recent (Spring 2021) undergraduate valuation course, which can be found here. My aim is to share the fundamental ideas from the course here in this blog. The reason I chose a valuation course is its significance for any finance-related decision making, say investing in a cryptocurrency, buying a house, or owning stocks and bonds.

Let us begin with the short introductory video, in which AD talks about what to expect from this course. Here are the key points:

• Valuation is a craft, which can only be learned through making valuations.
• AD actually discourages students to follow step-by-step recipes, and instead encourages them to deviate from rules and improvise as they practice more. 
• Valuation is not only about famous, publicly traded companies like Tesla or Apple; principles of valuation are universal, they can be applied to any kind of business
• Assuming the markets are efficient, "value" and "price" refers to the same thing. However, "pricing" an asset often results in a different number than "valuing" an asset.
• Valuation is not only about numbers but also about the story behind the numbers.
• Do not make a valuation for valuation's sake, you should be willing to act on it (that is invest in an asset you find undervalued). And to act on your valuation, you need faith in your judgments and the market. 

This is only the beginning. Hope you will follow my journey as I study and summarize this course.

Namaste.