In Conversation with Investment Philosophies Professor Aswath Damodaran
Professor Aswath Damodaran holds the Kerschner Family Chair in Finance Education and before coming to NYU Stern, he lectured in Finance at the University of California, Berkeley.
Professor Damodaran's contributions to the field of Finance have been recognized many times over. He has been the recipient of Giblin, Glucksman, and Heyman Fellowships, a David Margolis Teaching Excellence Fellowship, and the Richard L. Rosenthal Award for Innovation in Investment Management and Corporate Finance.
His skill and enthusiasm in the classroom garnered him the Schools of Business Excellence in Teaching Award in 1988 and the Distinguished Teaching Award from NYU in 1990. Professor Damodaran’s student accolades are no less impressive: he has been voted "Professor of the Year" by the graduating MBA class five times during his career at NYU.
Professor Damodaran’s new online executive certificate course, Investment Philosophies, is being offered this fall semester. The course looks at the range of investment philosophies with the intent of finding not only the core beliefs that animate them, but also the ingredients needed to make them work. Professor Damodaran answered a few questions from the NYU Stern Executive Education team including why the course is being offered now, who will benefit from it, and other key points for anyone wanting to learn more about this course offering.
Can you briefly explain why this course offering is important right now?
Professor Damodaran: Having an investment philosophy is important to investors at all times, but especially during periods of uncertainty and crisis. Investment Philosophies gives one the core principles they can use as a guide to finding a way back to investment serenity. It also acts as a shield against the barrage of sales pitches you hear from market gurus and pundits who pop up during these periods.
The course outline for Investment Philosophies on your website mentions that the introductory session of the course focuses on what an investment philosophy is, why you need one to be a successful investor, and how best to tailor a philosophy to fit you. Would you elaborate on the last point and why risk aversion, time horizon, and tax status are important to investing?
Professor Damodaran: Contrary to conventional wisdom, there is no one best investment philosophy that works for all investors. If there were one, we would all succeed with it. Instead, it is finding an investment philosophy that fits not only what you believe about markets but what makes you tick as a person. Thus, if you are by nature impatient, a long term value investing strategy will not work for you.
Who will benefit most from taking your new course?
Professor Damodaran: I created this class for anyone who invests, and more so for those who invest their own money, rather than professional money managers. The end game, from this class, is that you reclaim your own path as an investor and not be dependent on investment experts. So, if you are curious about markets and concerned that everyone who talks to you about investing seems to have an agenda that fits their own interests, not yours, this class is for you.
How does this course relate to the other online certificate courses you are teaching in Fall 2020 — Advanced Valuation and Corporate Finance?
Professor Damodaran: One of the investment philosophies that I describe is true value investing, where you buy stocks that are selling for less than their value. To put this philosophy into practice, you have to be able to value companies and that is what I cover in the valuation class. To invest in businesses, you need to be able to understand how to run a business, and the Corporate Finance class covers it.
How, if at all, does the course differ from your Investment Philosophies book? Are there any critical updates since its publication in 2012?
Professor Damodaran: The answer is not much, though the data is updated through 2018. That said, I do find myself developing more doubt in what I know and more nuance in what I say as I get older and learn more about how markets work and sometimes don’t work.
Professor Aswath Damodaran’s Investment Philosophies online certificate course will run from September 8 - December 22, 2020. To learn more and register for the course, click here (please note the registration and payment deadline is this Friday, August 28th). You can find his full bio here and see other Executive Education courses taught below:
Browse our full schedule of upcoming Online and Live Online courses below.