Aswath Damodaran was born September 23, 1957, in Chennai, India.
Aswath Damodaran was born September 23, 1957, in Chennai, India. ◦ He holds a Bachelor of Commerce in Accounting from Loyola College Chennai (1977), a Post Graduate Diploma in Management from IIM Bangalore (1979), and both an MBA (1981) and PhD (1985) from UCLA Anderson School of Management. ◦ Damodaran holds the Kerschner Family Chair in Finance Education and is Professor of Finance at the Stern School of Business of New York University, where he has taught since 1986. ◦ He describes himself as "a teacher first, who also happens to love untangling the puzzles of corporate finance and valuation, and writing about my experiences." ◦ A distinguishing feature of his career is making education accessible by placing his MBA courses and teaching materials online for free. ◦
Damodaran is a prominent advocate of Discounted Cash Flow analysis, emphasizing that the value of an asset is the present value of its expected future cash flows. ◦ He argues that "Rather than cringe in the face of uncertainty and act like it is not there, I have found that it is freeing to admit that you are uncertain and then to take the next step and be explicit about that uncertainty." ◦ He believes that "Being comfortable with uncertainty may very well be the edge that separates success from failure in investing." ◦ Damodaran distinguishes pricing from valuation, stating that "Most people, even those claiming to perform valuations, are actually just engaging in pricing," noting that pricing is driven by market behavior while intrinsic valuation requires a deep understanding of the business and its potential. ◦ He frames investing's purpose as "Investing is about preserving and growing wealth; it's not about getting rich." ◦ He views investing as an act of faith: "As an investor, you are acting on faith when you invest, faith in your assessment of value and faith that the market price will move towards that value." ◦ At the same time, he insists that "As an investor, you have to be open to feedback, i.e., accept that your story (and valuation) are wrong and that market movements in the wrong direction are a signal that you should be revisiting your valuation." ◦ He views his investing challenge as "maintaining a balance between faith and feedback since too much of one at the expense of the other can be dangerous." ◦ On price discipline, he states, "I will not buy a great company if I have to pay too high a price. I will buy a terrible company if the price is right." ◦ His first rule of risk management is "Do no harm. Do nothing in your investment philosophy that can create serious damage to your portfolio." ◦ He argues that "Shareholder value is the most long-term concept you can think of." ◦
Damodaran employs a counterintuitive method: "The more uncertainty there is, the simpler my valuation models become, with fewer inputs and less levers to move." ◦ He revisits his valuation when market movements go in the wrong direction, treating them as a signal to revisit his story. ◦ He maintains a balance between faith and feedback, because too much faith leads to doubling down blind to new information, while too much feedback creates an endless loop of changing value with price. ◦ He will not buy a great company at too high a price, but will buy a terrible company if the price is right. ◦ He warns against outsourcing judgment, noting that buying a stock because Goldman Sachs recommended it means "you're outsourcing a decision-making." ◦ He cautions against over-concentrating in one portion of the corporate life cycle, noting that holding 25 mature companies means "you've over concentrated in a portion of the life cycle." ◦
Damodaran's central mental model is Discounted Cash Flow analysis, where the value of an asset is the present value of its expected future cash flows. ◦ He operates with a pricing-versus-valuation dichotomy, viewing most market activity as pricing driven by behavior rather than intrinsic valuation. ◦ He integrates narrative and numbers, believing that numbers are a reflection of a story told about a business. ◦ Under uncertainty, he simplifies rather than complicates, reducing model inputs and levers. ◦ He maintains a faith-feedback loop, acting on faith in his assessed value while remaining open to market feedback that signals error. ◦ His risk management model is governed by "Do no harm." ◦
Damodaran is widely known as the author of several widely used academic and practitioner texts on valuation, corporate finance and investment management. ◦ His books include *Damodaran on Valuation* (1994), *Investment Philosophies* (2003), *The Little Book of Valuation* (2011), and *Narrative and Numbers* (2017); he received the Herbert Simon Award in 2013. ◦ He is a prominent advocate of Discounted Cash Flow analysis. ◦ He distinguishes pricing from valuation, identifying pricing as driven by market behavior and intrinsic valuation as requiring deep understanding of the business and its potential. ◦ He distinguishes the trader's mindset from the investor's, noting that "If you're a trader, then all you care about is pricing. It's mood and momentum." ◦
Damodaran describes himself as "a teacher first, who also happens to love untangling the puzzles of corporate finance and valuation, and writing about my experiences." ◦ He makes his MBA courses and teaching materials accessible online for free. ◦ He emphasizes the inseparability of story and math, stating that "Every number tells a story, whether you want it to or not," and that "The numbers are essentially a reflection of a story you're telling about a business." ◦ He uses self-deprecating humor about his fallibility, noting, "I am wrong a hefty percent of the time, but so what? It's only money! I am just glad that I am not a brain surgeon!" ◦
Damodaran openly embraces fallibility, stating, "I am wrong a hefty percent of the time, but so what? It's only money! I am just glad that I am not a brain surgeon!" ◦ He treats comfort with uncertainty as a competitive edge. ◦ He holds a tension between faith and feedback, viewing the balance as dangerous to tilt too far in either direction. ◦ He is willing to own terrible companies at the right price while rejecting great companies at the wrong price, a stance that prioritizes valuation over quality. ◦
Damodaran makes his MBA courses and teaching materials online for free, making his educational content broadly accessible. ◦ He describes himself as a teacher first. ◦