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January 2018 Data Update 7: Growth and Value
I have spent the last few posts trying to estimate what firms need to generate as returns on investments, culminating in the cost of capital estimates in the last post. In this post, I will look at the...
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January 2018 Data Update 8: Debt and Taxes
In the United States, as in much of the rest of the world, and as has been true for most of the last century, the tax code has been tilted towards debt, rewarding firms that borrow money with tax...
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January 2018 Data Update 9: Dividends, Stock Buybacks and Cash Holdings
If success for a farmer is measured by his or her harvest, success in a business, from an investors' standpoint, should be measured by its capacity to return cash flows for its owners. That is not...
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January 2018 Data Update 10: The Price is Right!
In my first nine posts on my data update for 2018, I focused on the costs that companies face in raising equity and debt, and their investment, financing and dividend decisions. In assessing those...
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Testing Times: Market Turmoil and Investment Serenity
The last week has been a roller coaster ride, though more down than up, and investors have done what they always do during market crises. The fear factor rises, some investors sell and head for the...
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Interest Rates and Stock Prices: It's Complicated!
Jerome Powell, the new Fed Chair, was on Capitol Hill on February 27, and his testimony was, for the most part, predictable and uncontroversial. He told Congress that he believed that the economy had...
View ArticleDamodaran Online: There is an App for that!
My posts over the last two months have been heavy, dealing first with my data update from January 2018, and with the market and its volatility in the last few weeks. I felt like taking a break and...
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Stream On: An IPO Valuation of Spotify!
In the last few weeks, we have seen two high profile unicorns file for initial public offerings. The first out of the gate was Dropbox, a storage solution for a world where gigabyte files are the rule...
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Spotify Loose Ends: Pricing, User Value and Big Data!
In my last post, I valued Spotify, using information from its prospectus, and promised to come back to cover three loose ends: (1) a pricing of the company to contrast with my intrinsic valuation, (2)...
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Come easy, go easy: The Tech Takedown!
If there is one thing that I have learned about markets over the years, it is that they have a way of leveling egos and cutting companies and investors down to size. The last three weeks have been...
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The Facebook Feeding Frenzy: Time for a Pause!
In my last post, I noted that the FANG stocks have been in the spotlight, as tech has taken a beating in the market, but it is Facebook that is at the center of the storm. It was the news story on...
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Netflix: The Future of Entertainment or House of Cards?
For better or worse, Netflix has changed not just the entertainment business, but also the way that we (the audience) watch television. In the process, it has also enriched its investors, as its market...
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Alphabet Soup: Google is Alpha, but where are the Bets?
In my last two posts, I looked first at the turn in the market against the FANG stocks, largely precipitated by the Facebook user data fiasco and then at the effect of the blowback on Facebook's value....
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Amazon: Glimpses of Shoeless Joe?
It was just over two weeks ago that I started my posts on the FANG stocks, starting with Facebook, which I decided to buy, because I felt that notwithstanding its current pariah status, its user base...
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Walmart's India (Flipkart) Gambit: Growth Rebirth or Costly Facelift?
On May 9, 2018, Walmart confirmed officially what had been rumored for weeks, and announced that it would pay $16 billion to acquire a 77% stake in Flipkart, an Indian online retail firm, translating...
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User and Subscriber Businesses: The Good, the Bad and the Ugly!
In a series of posts over the course of the last year, I argued that you can value users and subscribers at businesses, using first principles in valuation, and have used the approach to value Uber...
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Twists and Turns in the Tesla Story : A Boring, Boneheaded Update!
There are lots of complaints that you can have about Tesla, but being boring is not one of them. It helps to have a CEO who seems to find new ways to make himself newsworthy, in good and bad ways. In...
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Share Count Confusion: Dilution, Employee Options and Multiple Share Classes!
In my last post, just about four weeks ago, I valued Tesla, and as with all of my Tesla valuations, I got feedback, much of it heated. My valuation of Tesla was $186, in what I termed my base case, and...
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Country Risk: A Midyear Update for 2018
While political and trade wars are brewing around the world, centered on globalization, the enduring truth is that the globalization genie is out of the bottle, and no political force can put it back....
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The Privatization of Tesla: Stray Tweet or Game Changing News?
After my last two posts in Tesla, I was planning to take a break from the company, since I had said everything that I had to say about the company. In short, I argued that Tesla, notwithstanding its...
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