YouSaid · the spoken record

Aswath Damodaran

lines on the record: 198
first: 2023-04-06
most recent: 2023-04-06
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“So when I look at the G in ESG, I have the same reaction I had, and I'm old enough to remember when there were two Germanys, West Germany and East Germany. I remember what East Germany called itself. Do you remember?”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“The G and ESG is stakeholder governance. You're accountable to everybody. You're accountable to shareholders. You're accountable to lenders. You're accountable to society. You're accountable to, you know,”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm going to say something about the GNESG, right? The governance in ESG is not the corporate governance that we've talked about in finance for 50 years, which is managers being accountable to the owners of a company. That's a corporate governance that I was brought up on all the research in it.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“I wish I could tell you that markets have the good sense to learn and adapt, but I don't think they do. What strikes me as amazing in markets is how much collective amnesia there is. So three months of Facebook going up and all of a sudden they've forgotten all the complaints they had at Facebook's bottom. So, I wish I could tell you that investors in portfolio managers would have the stomach to stand up and say, you know what, we're not going to take this two classes of shares anymore. But I think once we open that door, and I blame Google for this, Google, in a sense, created this process. And people walked in, it's very difficult to relock that door. Now, and so I'm not, I wish that change would come, but I'm not optimistic that it will.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“For the first couple of years And the response I had was benevolent dictatorships over time is what starts as a benevolent dictatorship eventually becomes malevolent. You've taken away the power to do it. And they said, Don't worry about that'll never happen.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“We've effectively given Mark Zuckerberg 57% of the voting rights in perpetuity. And when this happened, I remember asking this question of portfolio managers, why are you okay giving up this much power? And their response was, hey, he's a genius. He's amazing.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“He's the right person for that phase of the life cycle. Steve Jobs had stayed on because Steve Jobs would probably have shot for the moon on something else and ended up effectively putting a trillion and a half dollars at risk. So, I think that you need transitions, but unfortunately we're also creating a structure where we're doing that has become more difficult at some of these companies that are the 21st century companies. And what I mean by that is if you don't like the way Mark Zuckerberg likes Facebook, he owns only 14% of the stock. But because we allowed, we collectively, and we have to take the blame for this, we as portfolio managed investors allowed Facebook to go public with two classes of shares. Right.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“I might be saying something that be sacrilegious, but in a sense, I think Apple is better off with Tim Cook having run it for the last decade.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“And he says, Look, where are trillion dollar company? We can't be going after new businesses and not protecting the core business. So in a sense, the”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“But it took a while. Remember that after Tem Cook came in, people said, you're not doing what Steve Jobs. Why aren't you disrupting a new business? Tim Cook was a business builder in a sense. He's”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“I've tried to navigate that middle ground by saying this company is not as amazing as you think it is to the Tesla fans. And at the same time, there's something special about this company. You need to bring it in. I think that the problem with the company, and this is something I would say about any company, it's a company that is wrapped up in a person. And what I mean by that is when you think Tesla, you think Elon Musk.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“Which means they are unwilling to listen to any story you tell about, hey, you can't dismiss this company. As you said, it's changed the entire business, the automobile business, a business that was immune to change. And think of DeLorean trying to do this 50 years ago, right? It destroyed every person trying to change the business. And in 10 years, Elon Musk has done more for climate change and all the ESG people put on the face of the earth because he's changed how decisions are made in the business.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“The other extreme, your people are convinced that this company is a scam. They've always believed really a scam. I mean, they're selling a lot of cool. And they claim the whole thing is accounting, gameplay that the company's never made money. There's a whole Tesla short community you might visit. They can visit whole things going. So it's just a pack. The whole thing is going to come crashing down”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“Have been rapidly accelerating. The person running the company as a mature company is often the same person who is the company who created the visionary who started the company is now running the company. And let's face it. The guys who run Blackberry were great with vision. And guess what? The decision they made drove the company into the ground. And I think that's going to be an increasing problem in the 21st century because the 21st century company, ages and dog years.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“He passed on, and now his grandson took over. Time to care of these transitions because the typical company in the 20th century took 40 years to build up, stayed 40 years at the top, and then declined over 30 years, 100 year life cycle. In contrast, think about a Yahoo or a Blackberry. From start to end, you're looking at 15 to 20 years. So the life cycle.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“And here's the big reason why I think this is going to become a bigger issue in the 21st century. In the 20th century, if you look at, let's take Ford, right? Henry Ford was the perfect CEO of Ford as a startup. Why he had a vision? Visionaries are strange people. They're eccentric. So he made the model T only in one color. Why? Because that's the way he wanted everybody. Everybody drives a black car. Why would you want a different color? But by the 1930s, he was actually developing other tastes which were not particularly appropriate for US automobile company. time took care of the problem.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“Somebody's going to eat your core business, and then you get to the last phases, you know, who you need running the company. Larry the liquidator. I see Danny DeVito every time I see Bed Beth and Beyond, right? You need somebody coming in saying there is no good ending to this story.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“Then you get to this phase where you're building a business. Now you've gone from vision. You need somebody pragmatic because if you have a visionary who says, I want this perfectly the way my vision tells me, you're never going to get off the ground. You need a builder, let's call it Bob the Builder. If you want Brianna the builder, if you want to stop being sexy and make the CEO of somebody of the other sex, then you get to this phase where you get to be a mature company. You need Don the Defender, somebody who's protecting your core business because you take your eye off that and you go after new businesses.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“I think you're raising a very interesting and a big point about corporate governance and how we change management. I mean, one of the chapters in my book is about who's the right CEO for your company. Because if you listen to McKinsey and Harvard Business Review, they claim the 23 characteristics. That's not true. The right CEO of a company will depend on where you're in the life cycle. You're a startup. You want a storyteller. You want a visionary. Why? Because you got to get people to buy into your story, your employees, your investors, your customers. Let's call that person Steve the visionary.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“They will overreach. It's going to be much more effective than any regulator doing it. So, your pathway to faith because he's worried about Facebook taking over the world. I said, don't worry, it'll eventually, and this has been the case with technology companies especially, they will overreach and that overreach will be what brings them back to Earth.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“And it made me pure coincidence, but they're the oldest companies in this group. They've lived through painful war, right? Apple has lived with a near-death experience. Microsoft has seen what happens when your existing projects age. So in a sense, they've learned the lessons from this saying, we need to be more careful about how we behave because we're older companies. Google and Facebook are young companies in terms of chronological age. So the people running Google, it's not some distant memory. They remember when they were at peak age, right? 2017, you looked at Google and Facebook, I remember being in a discussion with my friends Cott Galloway, and he said, we've got to break up these companies. They're going to dominate the world. And I said, Scott. You don't have to break them up. They will do it themselves.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“You can try paying a plastic surgeon to get it, but gravity works its magic anyway. And companies do the same thing, which is they're constantly trying to rediscover their youth. But eventually you get middle-aged. Facebook, Google, Apple, that entire group of companies are middle-aged companies. I mean, that's not bad. They've had a great younger life. But they have to recognize that you're middle-aged, you're in overreach. You don't jump out of bed. You very gingerly step out of bed because you jump out of bed 23, you're okay, you land on your feet, you jump out of bed and you're 55. Who knows where you will land, right? Right. So I think one of the points I've always made is companies need to act their age.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, I think it's almost built into every company's DNA that they will blow themselves up. It's a nature. That's why you're lifecycle, which is as you age, you look back with nostalgia at what you used to be able to do when you're 25. And then you make the stupid mistake of thinking that if you spend enough money, you can go back to being 25.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“Getting close, and I think they need to be careful. I think that's part of what the market's doing is sending them a warning. Let's see if they listen.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“I think Amazon needs to return to that core business and kind of make sure that it's cleaned up to get back the customers But they still have that disruption army, right? Amazon Prime. And I think that they need to make sure that they're not putting the loyalty of those prime members to the test.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. But then how do you make revenue? So, what is the revenue base, which is a weakness that many tech that Amazon did not used to have? I used to describe Amazon as a company that rent for revenues first, but always had this eye on long term, this is what we want to do. And some of the stuff they've done over the last few years, I'm not sure what their end game is other than we'll have more people in our ecosystem. So I think that Amazon took their eye off the ball. And you're right, their retail side has become just, you know, there's a lot of chaos going on there. I don't trust Amazon reviews anymore. Oh, any review.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“They outsource, I'm sure, healthcare, they have little experiments that they're running. The only problem is when you're looking at that many different businesses, it's difficult to keep focus. And I think that you see this with the LX write-offs they're taking, which is what exactly was the end game with Alexa? What were you trying to do? I was never quite clear on what Alexa was supposed to do.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“Is Amazon doing outside of retail? Well, logistics. So, in a sense, they're bringing in businesses that you might have viewed as online pages.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“I think they took their eye off the ball. I mean, let's face it, Amazon started as a retail company. They built their reputation as an online retail company about 10 years ago when I valued Amazon, I described it as a disruption platform. In other words, I said, this is no longer a company that thinks of retail as its core business. It's going to disrupt any company in any business if it feels there are soft spots. And in a sense, you've seen Amazon's actions over the decade reflect that.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“16% one in six dollars. Those six companies accounted for 16% of the increase in market cap of 7,500 US stocks. With the implication of that is if you spend the entire decade with none of these stocks in your portfolio, I don't see any way in which you could have created any kind of positive alpha, right? It's almost like you had to have at least one, hopefully more than one. So you're coming off a decade where you've added trillions of dollars of market cap, often based on flimsy stories that you don't carry through. Netflix, we can keep adding subscribers. Nobody seemed to ask the question. You're going to run out of people on the face of the earth before you add subscribers.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“Was amazing. One out of every $6, in increase in value that came to markets, increase in market cap during the last decade, happened in just these six companies.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that if you think about pricing is driven by mood and momentum, come easy, go easy. And I think in a sense to complete the story, you need to bring in what happened in 2029. In fact, the previous decade to these Fang Amstocks.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“15 years ago, and we're going to save this piece of our past. So it's interesting. There is a collection of things coming together in the memes talk phenomenon, but it's an old phenomenon that's replaying out there. So I won't blame the traders. Let's not use the word investors. The traders in these stocks for doing something that is irrational. I think it just reflects humanity and it's always going to be with us.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a human emotion revenge, and here you have a collection of people saying, We're going to take revenge by pushing up the price of GameStop and drive, and you still see this phenomenon, AMC, you're seeing the phenomenon in Bed Bath, and beyond, you saw the phenomenon. This is something that seems to play out. And it's usually younger people who have an emotional connection. If you look at the big companies that are in the meme phase, you see GameStop, you see AMC, you see Bed Bath and Beyond. It's almost like you can see 35-year-olds with nostalgia for the malls they used to visit.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“So the question I was asking is what is the core reason or the driver of this? And it seemed to be revenge. Revenge in what sense the core reason people were giving for buying GameStop had nothing to do with GameStop. It's because they wanted to get back at the hedge funds. We're going to bring the hedge funds down, which is interesting because some of the biggest hedge funds who are making money from this were on the other side of the hedge funds. Payment for order.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“With an online Chewy, and that worked out well. And that's, in fact, one of the things you find at the core is there's a core story that is true. You've just come up with a number that has completely no relationship in the magnitude of that story. So it's something that has happened before, but what it shows you is with social media how much what might have been a 20% bubble can become a hundred percent bubble in the social media age. And so it was actually interesting. For buying the shares.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“So, for instance, you could argue that GameStop has potential in the online gaming market. They have a collection of data, people have shopped at the store that they're going to build on it.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“Because all these things are stories. At the core, there is usually a story that makes sense. Even the stupidest push-ups are driven by a core story, that's some truth to it.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“And I originally wrote about it when I wrote about CNBC 30 years ago. I said this is today or 20 years ago. I said, this is today's pub, which is you go on CNBC, you say, look, I'm going to tell you a secret. It's just between you and I. And then, so But if you think about social media, that now has become the place you go. You go to social media.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“And then you blurted out what you said were secrets about South Sea that nobody should know. And then other people in the pub heard you and they went and bought the shares. And I thought.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“So, when that happened, part of me said this has happened before, so I'm not going to get extra hot under the collar because of it. Clearly, this has nothing to do with value. It's got to do with mood and momentum, but that's not new. Markets have always been driven by mood and momentum. But what social media has run, and this I think is a more general point I would make, Is it's made mood and momentum stronger, right? Because you're able to gather together a crowd a much larger audience. I remember reading this book a bit extraordinary. You might have read about popular delusion to the crowd book. Charles Mackey, you know. Oh, Charles Mackey. And he talked about how in the South Sea bubbles, you know, you created news stories. You went to a pub, you acted like you were drunk.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“The short seller said basically it seemed on a pathway to zero. It seemed that that was going to be the endgame. And then all of a sudden you had this group on the Wall Street bets. And then, of course, you had the push-up that they collectively did. I call this the first crowd short in history. Right, because usually crowd shot squeeze in history because historically short squeezes come from rich people deciding to squeeze other rich people, right? I mean, that's basically how it happens. Here at a collection of people. So it's very much a 21st century phenomenon. In fact, it's a phenomenon that's a social media phenomenon because if you think about 20 years ago, you couldn't even have gathered together this many people in the town square.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, when GameStop took off, it went from $20 to $400. It obviously caught my attention because if you think about it”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“That might be well worth considering as an alternative to going to a four-year university and paying for every single year.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“Because I think that paying 225,000 dollars or $250,000 for a four-year university education, even if it's at a very top university, I can't see the payoff from that economically. I'd much rather that you went to a lesser school, spent the four years there, created, and have all the other stuff that comes to the package, that college football that you go to and hanging out with friends. And pay $50,000 instead of $250,000 because think of what that extra $200,000 can do for you in the rest of your life. Now, I think that might be the place to start is rather than talking people away from a college education, ask, why are you spending so much? Is there a way you can bring it down? And the suggestion you made of these hybrid models.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“As a college education, and you can create your networks. You can create your networks, they don't have to be college networks. I don't think they're the healthiest networks in the world to begin with. Fraternity you belong to. Those might not be the best connections you have. It takes more work. We're still not quite there. I mean, I'll make it personal. One of my kids said, should I go to college? I'd probably still encourage them to do it. I'd encourage them to go to college on a scholarship if they could and pick a lesser college than the college they get into that there might be the top pick.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“So, if you ask me, can I educate myself today? We have the resources to do it. I mean, you need to find the right play. You can't just take classes randomly. You can educate yourself. That's something we could not have done 30 years ago. That option exists for people who are self-starters. But that's where the discipline part comes in. So maybe the startup you need in education is a startup that wakes you up at 7.30 in the morning and makes you reminds you that it's almost like you need that because the reason you go to college is your roommate wakes up to go to college. He notices you're still sleeping and that you have a class at 10 and he nudges you saying, aren't you going to class? You might not wake up, but you feel guilty about going back to sleep because your roommate reminded you. If you can get that discipline component into this process, then I think online education can do just as good a job.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“College education is we overestimate the But three or four years in, when they look at the differences across people, the differences in income start to the relationship to the college you went to starts to disappear.”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“A subset, right? I mean, I think if you think about it as an economic proposition, it probably doesn't make sense for 95% of people to go for much for master's degrees, right?”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source
“Take Google, right? It's called itself alphabet. I think of it as Snow White and the Seven Dwarfs because 90% plus of its revenue still comes from the search box, right?”
2023-04-06 · Masters in Business · Aswath Damodaran on the Future of Business Education · IDENTIFIED FROM THE TRANSCRIPT · source