Traditional value investing doesn't work anymore - Damodaran

Discuss

I think there is some merit to the idea... think of how books like "Built to Last" don't apply anymore. In the NSE, there are many stocks trading below their book value... but it would take years for the market to catch up, during which time that cash could have been invested elsewhere.

29/05- stick to the old ways of valuation. https://blogs.cfainstitu...d-19-go-back-to-basics/

30/05 -old style valuation doesn’t work....

But digging deeper in to other dissections of what this guy has said in the past few days, one thing I get is he says book value has become irrelevant

That's why I said it is a "Lazy Headline"

BV may not be captured accurately due to many things eg valuation, accounting standards, "value" of intangibles, franchises, perception, etc.

Except for a business with lots of real assets and cash-equivalents, BV is not a great metric to use.

Even for real assets, it can be problematic. Machinery valued at KES 1bn = scrap if the factory shuts down for a while e.g. ARM, Mumias, etc.

A mall which is partially empty isn't worth what it cost to build e.g. pick a number of malls...

UNIVERSITY OF WEALTH CREATION

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"Academic excellence is overrated! Did I just say that? Oh, yes, I said it.
Being top of your class does not necessarily guarantee that you will be at the top of life. You could graduate as the best student in Finance but it doesn't mean you will make more money than everybody else. The best graduating Law student does not necessarily become the best lawyer. The fact is life requires more than the ability to understand a concept, memorise it and reproduce it in an exam. School rewards people for their memory; Life rewards people for their imagination. School rewards caution; Life rewards daring. School hails those who live by the rules; Life exalts those who break the rules and set new ones. So do I mean people shouldn't study hard in school? Oh, no, you should.
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Think less of becoming an excellent student but think more of becoming an excellent person. Make the world your classroom!"