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Aswath Damodaran is an Indian-American finance professor, valuation expert, and author who is widely regarded as the world's leading authority on corporate valuation and financial modeling. Here's who he is:
Aswath Damodaran has been a professor of finance at New York University's Stern School of Business since 1986, where he teaches corporate finance and equity valuation to MBA and undergraduate students. Known as the "Dean of Valuation" on Wall Street, he has educated thousands of students who have gone on to careers in investment banking, private equity, and asset management. His courses are among the most popular at NYU Stern, and his teaching style combines rigorous academic theory with practical real-world applications.
Damodaran is known for his comprehensive approach to valuation that emphasizes understanding the underlying business fundamentals rather than relying on shortcuts or rules of thumb. He advocates for a disciplined, data-driven approach to valuation that considers uncertainty, incorporates market dynamics, and adjusts for company-specific and country-specific risks. His work spans traditional discounted cash flow models, relative valuation techniques, and real options valuation.
Beyond academia, Damodaran maintains an extensive online presence where he shares his research, data, and insights freely. His website provides comprehensive financial data for companies worldwide, and his blog offers regular commentary on market developments, valuation controversies, and investment trends. He's also a sought-after speaker and consultant, known for his ability to explain complex financial concepts in accessible terms while maintaining analytical rigor.
Aswath Damodaran's Best Quotes
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"The only number that I care about is value. Price is what you pay, value is what you get."
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"Valuation is not an exact science. It's an art where precision matters less than accuracy."
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"A good valuation model should be simple enough to understand but sophisticated enough to capture the key drivers of value."
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"The biggest mistake in valuation is not mathematical but psychological - letting your biases drive your assumptions."
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"Uncertainty is not the enemy of valuation; it's an integral part of it. The key is to be honest about what you don't know."
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"Every number tells a story, but not every story that sounds good translates into a good number."
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"The market is not always right, but it's right more often than any individual investor, including me."
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"In valuation, garbage in will give you garbage out, no matter how sophisticated your model."
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"The essence of risk is not knowing what's going to happen, and that uncertainty has to be built into value."
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"A DCF model is only as good as the narrative that drives it. Without a coherent story, it's just a collection of numbers."
Written Works
Investment Valuation: Tools and Techniques for Determining the Value of Any Asset
Damodaran's most comprehensive textbook covers every aspect of valuation from basic discounted cash flow models to complex real options. The book serves as both an academic text and practical guide, providing detailed methodologies for valuing companies, bonds, real estate, and other assets. Each edition incorporates new developments in valuation theory and practice, making it the definitive reference for finance professionals and students.
The Dark Side of Valuation: Valuing Young, Distressed, and Complex Businesses
This specialized text addresses the challenges of valuing companies that don't fit traditional models - startups with no earnings, distressed companies, and businesses with complex structures. Damodaran provides practical frameworks for dealing with uncertainty, negative cash flows, and unconventional business models. The book has become essential reading for private equity professionals and anyone involved in valuing early-stage companies.
Damodaran on Valuation: Security Analysis for Investment and Corporate Finance
A practical guide that bridges academic valuation theory with real-world application, this book focuses on equity valuation techniques used by investment professionals. It covers both absolute valuation methods (DCF) and relative valuation approaches, with extensive case studies and examples. The book emphasizes developing intuition about what drives value in different industries and market conditions.
The Little Book of Valuation: How to Value a Company, Pick a Stock and Profit
Part of Wiley's "Little Book" series, this concise guide distills Damodaran's valuation expertise into an accessible format for individual investors. It provides practical steps for valuing companies, understanding when stocks are cheap or expensive, and avoiding common valuation mistakes. The book emphasizes building valuation discipline rather than following market trends.