The Dark Side of Value Investing | Practical Lessons from Aswath Damodaran

Full Interview on Talking Billions https://youtu.be/7UEb_JEbeAE Full Interview on Excess Returns https://youtu.be/JMlAi0B-rlE Join Matt Zeigler and Bogumil Baranowski as they play our favorite clips from both the Excess Returns and Talking Billions podcast interviews with Aswath Damodaran. This conversation unpacks Damodaran’s timeless insights on navigating uncertainty, embracing the process of investing, and finding comfort in a volatile market. From the ritualistic allure of the Berkshire Hathaway meeting to the pitfalls of factor investing, Main Topics Covered: The dangers of rigid, ritualistic value investing and the Berkshire Hathaway meeting’s cult-like atmosphere, contrasted with its networking value. Embracing uncertainty as a feature of investing, not a bug, and avoiding unhealthy coping mechanisms like denial or outsourcing. The limitations of factor investing, emphasizing the need to bring unique value to the table to achieve excess returns. The stock market as a reflection of real-world business value, not a place where money is made, and the futility of fighting market dynamics. The importance of loving the investing process over obsessing about beating the market, with diversification as a safeguard against hubris. Balancing comfort investments with high-risk, high-reward opportunities to build a resilient portfolio. The rise of passive investing and its potential to create opportunities for active investors as fewer people seek market mistakes. The "sleep test" for investors—framing choices with gratitude and perspective to maintain peace of mind. 00:00:00 – Introduction and Damodaran’s view on contempt in investing 00:01:00 – Matt and Bogumil introduce the episode and their admiration for Damodaran 00:03:00 – Why the Berkshire Hathaway meeting terrifies Damodaran 00:11:42 – Uncertainty as a feature, not a bug, in investing 00:21:02 – The shortcomings of factor investing and the need to bring value 00:31:01 – The market as the boss and the importance of staying detached 00:38:22 – Loving the investing process over beating the market 00:44:05 – Comfort investments vs. edge opportunities in portfolio construction 00:52:50 – Active investing as bad plumbing and the rise of passive investing 01:01:12 – The sleep test: Framing investments for peace of mind 01:06:48 – Closing remarks and where to find more from Bogumil and Matt