Welcome to a special episode of the property show. So what should we talk about?

I know the shit show crazy mania, weirdness, passing the baton from one generation to another, the mob or the new generation of investor, whatever you want to call it, whatever you want to call it. The markets have just been exceptionally interesting the last 48 hours and my go to as well as several hundred thousand people to go to around stocks and valuation is the individual who was my first guest on the property show and also probably for lack of a better term, my role model around teaching, because he is the best teacher in the world.

No joke. He's been voted the best instructor in the world. Professor Aswath Damodoran and who literally wrote the book on valuation, the best selling book on stock market valuation, and has this gift regarding the ability to communicate complicated concepts. And he is there's this occasionally in your life. There's there's people that nobody says a bad word about because they're outstanding professionally. They reek of just depth and character and are incredibly generous. I have never heard the word no from Aswath whenever I've asked him for anything.

Anyways, he's he is the go to he is the Yoda here and thought this would be timely or relevant to check in. And here is our interview with Professor Aswath Damodaran.

Why, it's good to be with you. OK, I'll just throw out a word and you respond.

GameStop, I think the question of GameStop is not why it's happening, but why it took so long for this to unfold, because in a sense, it's a culmination of three forces that we've been seeing in society. One is a complete loss of faith in experts in coming back to 2008 and since and with good and with good reason. The second is this worship of crowds that you see everywhere you go to use Yelp reviews, restaurants, tomatoes to become movies.

And we we trust crowds implicitly. And we've made it much easier to gather the crowd with social media. And the third is everything is personal. Not every single disagreement you have becomes personal and political. And you can see that unfolding here, because I think what you have with GameStop is those trends coming together, invest in markets. And I don't think it's good for anybody. And of course, the hedge funds are going to feel the pain and have no sympathy for that.

What I want to do for this is great for small investors. And why is that?

They're claiming that this is a passing of the baton from the establishment investor class to a new a new cadre of investors who are leveraging a new medium and new skills and making bank. Why do you think it's not going to end?

Well, and I don't begrudge them any of those things. I think everybody's entitled to buy or sell. But the question is, what's your end game? I mean, let me turn it on on the Reddit investors. Let's, as I said, no sympathy for the hedge funds. Let's say you write the hedge funds are screwed up and you need to take them out of the process. My question to Wall Street bets or any other group of investors is what's your end game?

If your end game is driving Melbourne Capital out of business, you might very well succeed. But you know what? Somebody else will step in. It's like a whack a mole. But once you've done that, what's in your portfolio? Do you really want to live life with AMC, BlackBerry and GameStop in your portfolio? I mean, after all this is done, that's what you're going to have in your portfolio. And presumably this is your savings, your pension fund money, your college tuition.

That's a question I want them to ask themselves, because if you make this about running the hedge funds out of town, sometimes you can get exactly what you want and then say, what the heck have I bought? And the concern I have here is not about individual investors going out and trading. I think that they're entitled to do that and have make their own judgments. But to do it in their own best interests don't make this a game of driving somebody else out of the market front and center.

That that can be a side benefit if you want, but that can't be front and center. Talk about credit.

What do you think, if any, is their obligation or their role in this?

I think that they provide a platform. But at the same time, my feeling is you take the platform away. These people gather elsewhere that that train's left the station. We we've let that beast out. It's not going back. And so you can shut down Twitter, you can set down Facebook, you could shut down Reddit. But these people are going to find a forum because in terms of technology, finding a forum is not going to be difficult.

The question I would ask is, how do we make the discussions on this forum have a focus, some sense, some sense of engagement. And that is something that I think we're going to be struggling with, not just an investment from every aspect of our lives. It feels as if the narrative here you wrote a book called Narrative and Numbers and that the narrative here started out as fundamentals, an activist investor comes into GameStop, sees it as undervalued, points out some fundamentals, and the stock goes from four bucks to 40 bucks.

And then it became a technical trade momentum, short squeeze, and then it became a movement, which I've never seen before, that investing in a stock is supposed to be linked to some sort of movement.

Have you ever seen that?

Sustain this just feels as if it feels as if I might be wrong, if this is if a lot of young men, quite frankly, are being played around this notion of a movement.

Yeah, and I think you're absolutely right. I think that it has. I mean, it's the first time I've seen AOC and Ted Cruz agree on something, right? I mean, they both think they're both on the side of the Reddit investors. And that should tell Reddit investors something about getting played because you become a pawn in a larger game. And in this case, they're playing the game with your savings, your investments. That's why I said you got to look at what and to what do I hope to get out of this, because I'm not sure that you want to be a pawn in that game.

Do you think there's any legitimacy to people saying, OK, there is momentum trading all over the marketplace and we have found a subset of stocks that are are shorted or over shorted for lack of a better term? And we're going to go in and raise awareness and go hard at them. Isn't that just an investment strategy that certain short or long players have been playing for a while?

This is where I'm on the side of the Reddit investors. When I hear the the morning from Wall Street, you think that Wall Street's cared about value on Wall Street has been a momentum play forever? I mean, when you think about the whether you're a trader, invest in 99 percent of people on Wall Street traders, they're not investors. They've never cared about value. They've been momentum players. So for them to say, oh, my God, these these these naive investors, what are they doing?

I think strikes me as hypocritical. And that's what I think the Reddit investors are latching onto, is the hypocrisy of this. So I think that what this is exposing is the emptiness of professional investors and Wall Street. That's basically what it is, because what they're telling investors is saying, hey, we're doing exactly what you're doing. Why are we bad and you good? I mean, so it's not as if Wall Street is care about fundamentals and cash flows and earnings.

I mean, look at Tesla. I mean, if you look at equity research analyst, magically, that target price is always 20 percent above whatever the current price is. How does that happen? Yeah, if you're really looking at fundamentals. So I think that that on that dimension, I think they're absolutely right. Not this isn't something that naive retail investors alone do. Everybody does it. And now that the cat is out of the bag, I think it's revealing the emptiness of a lot of hedge fund trading, which is it's not driven by fundamentals.

It's driven by momentum. And what do you think should happen here? You're advising the SEC or financial regulators, what do you think is is there is this just educate people and let there be life lessons and let the markets reign? And platforms are, like you said, going to pop up, or does it require some sort of regulatory intervention?

I think my instinct is let let it play out, because I think that the only way people learn lessons is through. That's unfortunate, but true. And the lessons here are going to be on both sides. It's not just those Reddit investors are going to learn lessons. Hedge funds are two because let's face it, selling short is always a dicey game because your time horizon is not in your control. So when you sell short, you have to do things to try to make that difference narrow.

In other words, make the price move in your direction. Sometimes you do it legitimately. And I'm talking about historically, there's been sometimes you do it by putting out your thesis on why you think a company's operating, hoping that other people read it. And other times you step over the line, you create cartels, have investors who try to push the price down. unintelligible (Prof G). It's never been this isn't you know, this is like the UFC brought to market.

It's always been the case. What's different about this this short squeeze? Because remember, short squeezes have a long history. Cornelius Vanderbilt did eighteen sixty two to get control of New York railroads and he succeeded. What's different about this one is it's the first crowd squeeze in history. In a sense that, you know, usually when you have a short squeeze, it's a big players squeezing short sellers. So you go back to the 1980s, 90s or even the last decade, that was true.

And in this case, you're seeing, in fact, a very different kind of short squeeze where the big investors squeezing the short sellers. It's a bunch of small investors and that should kind of make professional investors think about how they play the game, because now the game is not in their control anymore. Yeah, I love that term (Prof G).

And I would like to slow down during this podcast when there's, I think, a real and especially cogent moment of analysis or insight. I love that term. Crowd crowd short I've never or wait. Did you say. "Crowd squeeze" Excuse me. Crowds squeeze as opposed to an institution we didn't talk about Robinhood.

Do you think? What's your view of Robin Hood?

I think RobinHood started off as a place where sports gambling gamblers came because it couldn't find any football games to bet on. I know that's a very simplistic description, but, you know, if you look at the players and RobinHood, basically, they're very open about the fact that they really don't care about any of the things that drive it. They've said this is a gambling game. If I get the the direction right, I'm going to make money in a sense.

Again, that an extreme version of what you see on Wall Street, because that's effectively what traders on Wall Street have always believed, even though they might never say it, and rather that they're open about it. They say, look, I don't care about earnings or cash flows of value. I don't even care what the company does. If I can find a way to make money, I'm going to make money, and that is kind of fed on itself because greed draws in more people.

So the more money people make, the more other people want to join it. I think we can try to stop RobinHood, but the reality is, as I said, these people will move elsewhere. What will teach them a lesson ultimately about risk is the reality that you can lose everything you've made in 12 months or 18 months in 15 minutes. Forget about 15 days and 15 minutes. Markets, I think, are more powerful at delivering lessons than any regulator regulatory government is.

Do you think at some point, though, so free market life lessons? I get it, but we also don't allow people to sell their organs because we don't want them to make historically bad. We want to prevent a tragedy. The Commons, at some point, if you employ gamification techniques and addictive attributes into your operating system, that encourages a lot of young men, a lot of whom are home bored, have a phone, some stimulus, your attitude is like it might be a painful life lesson, but it's a life lesson.

They've they've got to register. Is there any I mean, are there guardrails for there are some online trading platforms that aren't letting aren't allowing options or margin unless you have a certain net worth. Now, is that discriminating against the small investor or is trying to prevent a tragedy of commons?

No, I think that sensible I think that any Leawood position and options are in a sense, a type of leverage position. You're taking whatever bet you're making and multiplying. So I think that reducing access to leverage, either by reducing the margin margin buys or options is a good idea. And I think it's a good idea across the board. I think, you know, why should individual investors be the only ones who have to kind of be scaled down on that?

But I think every investor or even institutional investors need to have some kind of constraint on how many open option. So you use options to hedge. Of course, you're allowed to do that. But to the extent that you take naked option positions and you're exposed and you could potentially bring other people down with you, I think we have to think about restrictions on both leverage and options.

And what do you think I mean, it's difficult to tell, but what do you think happens to this class of stocks, the AMC, the Blackberries, the game stops of the world?

Do you have any gut feel for if you were to make a prediction, what happens over the next seven days in the next 30, 60, 90 days?

Any thoughts either go back to where? I think in a sense, I look at what happened at or if you remember two years ago, two years ago in twenty eighteen, there was a huge, huge short squeeze (??) Stock, I think went up on one hundred. I think it went up 10 fold. It lost it all within a few weeks. And the reason is very simple of all that sustaining used momentum. And that's all that's sustaining GameStop or AMC.

Now, what happens when those traders move on? Already this morning I was I was watching news stories that said that those that dreaded group, because they couldn't trade on GameStop, had moved on to silver. I don't know how they latched on to silver, but this is not a group that's going to have staying power. Any stock. And to the extent that the leopard and they are they've taken risky positions, if the stock starts to go down, it's it's going to go down in hyperspeed.

And that's, I think, one of the one of the things to think about, because ultimately, if you think about capital markets, it's existing to allow companies to access capital and survive in the economy. None of what's happening here is helping AMC or GameStop. In fact, you could argue that it could have a perverse effect of hurting these companies. And here's what to me. AMC chance for survival lies in somebody buying the company and making it part of a larger ecosystem, whether it's possible to buy now.

But if you increase the market cap by tenfold, nobody will be able to buy. So I think that if you're doing this because you like the company, which very few people are, but if that's the reason you're doing it, it's not accomplishing that objective. And that's why I think we need to think about what's your end game? Why are you doing it? And that's one reason why I think now the GameStop and AMC are very different from Tesla because Tesla's had five short squeezes in the last decade.

Mm hmm. And it's come out of each of them stronger than it went in. But here's the difference. When you've had a short squeeze in Tesla, it's because there are people out there, whether you agree with them or not, who absolutely loved the company and its products.

Yeah, if it's a side product, they get put. David, David, I know out of business, that's fine for them, but that's not their end game. The difference in AMC and GameStop is the end game seems to be let me take it to these hedge funds and make them suffer. But beyond that, there seems to be no other thought given to why these companies. Yeah, it's it's it's still difficult to kind of wrap your head around, so let's let's talk about another asset class or another group of equities that have outperformed in two thousand and twenty.

And there's more of them year today just in the first three weeks of the year than there were in all of 2019. And that is "SPACS". What is your view on special purpose acquisition corporations?

Well, I mean, again, we've had them for a long time. They ebb and flow with time. I think what they're going after is a failure in the IPO market in tradition, the way companies have gone public because they go to investment bank and investment bank prices them and then puts out a road show and then introduces them to markets. There's this implicit agreement that companies have with investment banks, which is you give us your pricing skills and your sales skills, and we will not only pay you in underwriting fee but it will actually let you on the price of securities by a moderate amount, 15, 20 percent.

You know what, investment banks have screwed up badly on every dimension.

They've failed at pricing, they've failed at selling. And when they sometimes misprice these companies they ridiculously miquote the price (that quadruplets of triples on the offering-Help!), that there's no excuse for that.

So people have been looking for alternatives. One, of course, is direct listings, which (?? person's name) has pushed. And that's a way in which you just go to the market directly and let the market set the price. The other is you pick somebody that you think has more expertise than you do, which is what this pack offers. They then collect your money and they said we'll find the right targets this way, that you could argue that the company gets a higher price because it can negotiate with the owner and investors get a better deal because they don't have to pay these investment banking fees and the strange offering prices.

So I think every mistake breeds its own consequences. And the banking mistakes and IPOs has opened the door to SPACS. The only problem with SPACS is the fact is that people who create these SPACS are they're not doing it for your interest and my interests or the company's interest. They have their own incentives now. They take a pretty hefty slice of the money that's raised for themselves. And unless they're really good at supporting companies that are good companies and negotiating the best price for you, you're not getting a great deal.

As you saw with Nikola, you can have SPACS that have absolutely no idea what they're doing. They collect your money. They claim to have expertise, but they have none . So if you're picking between banks and these SPACs founders, it's a tough choice because I don't trust either of them. But I don't think of SPACs as necessarily worse than banks, to be quite honest. I think that somehow, assuming that banks will provide you the protection and IPO that you don't get with SPACs, I think is looking at the wrong place.

I still believe that eventually I think direct listings are better for companies and maybe that's where we'll end up. But there are some growing pains. It's going to be difficult to do it under. Some of the rules have changed by how the proceeds used, because right now, when you do a direct listing, you can't keep the proceeds in the company to cover investments. You got to let bonus cash out, which is not a great end game for a young company that needs the cash.

Maybe we need to start thinking about making direct listings easier as as an antidote to SPACs, because I think that could take a lot of the money out of SPACs and put it back into the traditional going public process.

So let's shift back and talk more broadly and talk about the markets in general. Your thoughts on the market's all time highs and continuing to accelerate in the midst of a pandemic.

I think there are three things that are driving the market. The first is the pandemic has shut the economy down, but has done surprisingly little damage to corporate earning collectively. I mean, obviously, some companies like Boeing and the airlines are reporting losses, but there seems to be they seem to be other companies like Amazon and Apple that are reporting earnings that are blowing the doors of what people are expecting.

So collectively, earnings did not do as badly last year as people thought they would. And they're going to do better this year than many people are projecting. So that's the first leg of this market. So earnings are coming in the coming better than expected. The second leg is that the economy is going to reopen and implicitly, that seems to be assumption, the vaccines, no matter notwithstanding all of the logistical problems we're facing right now, will get given out to people.

The economy will open and we're all going to go back to spending like we did before. And there's a third leg to this to this to this market movement, which is that the Fed will magically keep rates low when all of this stuff is unfolding. And to me, that is the weakest link in years. What if investors are right and the economy is going to come back gangbusters? I don't see any way in which the Fed can keep rates of one percent.

The Fed doesn't separate its a follow more than a leader. So if you're if you see the economy coming back, rates are going to rise whether the Fed wants to or not. Jerome Powell is not a magician. So to me, the weakest link in this market is people are picking whatever they want, the best part of each story, combining it all into that one story for the market and pushing markets up. And that's one reason when earlier a week ago, I valued the market on my blog, I value I found it to be of a value of about 12 to 15 percent.

Not monstrous. It's not a bubble territory. This is not nineteen ninety nine. But there is... This market is priced to perfection and beyond. And that's what you worry about episodes like this GameStop episode, because, you know, there's a psychological component to markets which, you know, I don't know what drives that component, which can feed back into markets when you find market corrections, it's almost never been because of one big event. It's been a collection of small events.

I mean, go back to 2008, two thousand one (2009?). It's a small cuts accumulating to one day, just blowing up the market. And that this GameStop episode, no matter how it ends, is one of those cuts you look at and said, really? Because if it leads you to lose faith in the future of what what prices actually are telling you, I think, that we're in a dangerous place. And I would be concerned as an investor for that reason and think about getting at least getting some protection.

If I have a portfolio that's done well over the last seven, eight, nine, 10 years, I've been lucky enough to accumulate wealth. The reality is, no matter where you invested that money, you made a lot over the last decade. You've got to think about protecting some of those gains now more than in prior years.

So how do you take a more defensive posture, what's what's the most, on a risk adjusted basis, thoughtful way to to put up some protection?

The simplest is to just hold on to cash to the extent that that you already have cash, leave it in cash. Don't be in a hurry to put get in the market. The second, I think this is more in an explicit way of getting market protection, is to buy protection. And this is why I think you can make option trading work for you as an investor. I mean, you could buy puts on the market. It's simple to do. You can get it for three months, six months.

And you've got to think about it correctly, which is the money you're investing in these puts. It's like buying is that it's like the money is spent buying insurance. And when you spend an insurance, your best case scenario. Is that you will lose that basically that money does not get the money you want to buy fire insurance and see if your house. Yeah. You don't want to use it. So you could buy it in three month chunks.

It's not unreasonably priced and you don't have to go crazy. You're not protecting all of your wealth. I mean, you might say, look, I'm willing to take a 10 percent loss, but no more. But there are and this is the plus side of having derivatives. Derivatives can be misused, but they can also be very effective in kind of holding the line when you worry about the future.

So I'm one of those people that recognizes I have done really well or my portfolio of some really well over the last decade. And I recognize that it's dangerous to conflate luck with talent and that this is it's been very easy to think you're a good investor over the last 10 years. And so I want to go on to a defensive position. But I look at buying puts against the S&P or something, given the volatility in the market. It's just it's expensive.

It's an expensive way to hedge. Are there less expensive ways that maybe I'll give you as direct coverage, say, diversifying across regions or going into ETFs or different asset classes and like I said, different different markets to provide you with some, some or most of that protection, but aren't as expensive as going out? I just look at the cost. I mean, literally as we were talking or just for talking, I was looking at Put's.

They're really expensive right now because of the volatility of the markets. So anyways, is there is there any way to have my cake at a lower cost?

There is with the caveat, which is, you know, it's it's funny you should ask about diversification across markets, in different geographies, different asset classes. Yesterday, I just put out a correlation matrix of every conceivable asset class that started with stocks, foreign stocks, emerging market stocks. And I brought in corporate bonds, t bonds. And I looked at gold, silver, bitcoin, yttrium commodities, oil, copper. And what what do you see in the correlation?

Matrix is is very interesting. You know, it's everything moves together now.

It's that there is no place to hide, no place to hide. And it's because the lessons really well. And I let me explain what I mean by that. Now, when I took my first investment class, I was told, go ahead and invest in foreign markets, go out and buy real estate, go diversify. That was in the 1980s. You know what? We listen. We all did what we were told to do. And this one unfortunate side effect, which is as we did this, we increased the correlation across markets.

When you securitize real estate, you know what it did to real estate and made it behave like stocks. That's why in years where your stocks are up, your house is also up in price. And we have stocks are down. Your house is also down.

That did not used to be the case in the 60s or 70s or even the 80s. So the bottom line is there are no places to hide. That said, you can still get some diversification benefits by going across geographies, across asset classes. So one thing I tell people to do is, is take a look at your portfolio, do a pie chart of where exactly you're investing. My guess, for instance, not even looking at the portfolio is you probably have a much bigger slice of your portfolio in technology than the overall market.

It's not a slice. It is the VIX, which effectively also is what made you the money. Right over the last decade. The fact that technology. Yeah, but from a risk standpoint, you are overexposed now and and it's difficult to adjust to exposure overnight for the same reasons. Buying puts are expensive. Adjusting exposure overnight means selling your your tech stocks and paying this huge capital gains tax. You probably have Florida based. But in California, not only do I have to pay the 20 percent federal tax, I have to pay a California income tax, which can very quickly push that taxed thirty, thirty five percent.

That's a pretty big expense to pay to get my portfolio back to sink. So it's it's not easy to reallocate your portfolio, but if you the the advantages of a fresh income coming in, hopefully and we do, then you can direct that income to places where I'm investing. So it might be an incremental process. You're still exposed for that happens. But if you're willing to be a little patient, my suggestion is look at where we're not investing.

And you might not like those parts of the economy, but guess what? At the prices, you're getting them yet, they would still be pretty good investments in your portfolio. And so to buffer your portfolio against the downside. I won't say I want to ask where you see value, where you see less overvalued by region or companies or asset classes, where do things look less the least frothy?

I think we've the markets have been too quick to write off the value of companies, traditional companies and most businesses, and I've made my case that traditional companies have been punished and they deserve to be punished for not keeping up with what's going on around. But I think not all traditional companies in every space are created equal. So we look at retail, for instance, should we be bundling all brick and mortar retail companies into one big group, or should we pick and choose a Costco and say, look, this company, in addition to being brick and mortar, is bringing something else to the table?

So what I would suggest is and I'm not going to put names out because that would that would put you in spaces where I think the value is. And that might not be what you think the value stake hotels take brick and mortar can take all the places where people say disruption is destroying this business. Look across a list of companies and say, which of these companies in this list has found ways to kind of live with that disruption?

So that mean if you look at brick and mortar retail, what is it the Costco and Dollar General did that allowed them to not just stay in the business, but prosper in the midst of this overall disruption? And my guess is the equivalent of those companies and pretty much every sector. So distinctive, distinctive, the ethics of it oil stocks, is that the kind of thing where it's probably been unfairly punished?

Well, if you don't have any concerns about having fossil fuels in your portfolio to that, it's it's so you got to live with your own conscience. If you are climate change is your thing, then no matter how cheap Exxon Mobil is, you can find yourself pulling the trigger and buying Exxon Mobil. Mm hmm. But I think that that's exactly what I'm talking about, is your conscience is OK with that kind of company and you think it's being punished to a point where the price is right for you.

Adding it to your portfolio, not enough people, for instance, I own Facebook. And I know how you feel about Facebook, and there are lots of people now who say, I do not own Facebook, I can live with Facebook, because to me, from my from my perspective, there are other companies that I worry about more than Facebook. But I'm saying find your own Facebook, Facebook to make a lot of money from me since the Cambridge scandal.

But find your own find. Find your own Facebook, put them in your portfolio. And if you can live with your conscience, can live with it, it could be a pretty decent investment. So let's do a lightning round, I'm going to give you I'm going to throw out some names and you give me your reaction. So let's start with Facebook.

It's Facebook still in my portfolio. I think that they're going to be the next year or two are going to be trying times. But I don't see anybody else taking the online advertising business away from Google and Facebook. I don't own it. I you know, I bought it one eighty and sold it six hundred and now it's about four thousand. But I have no regrets. I think that the stock is priced not just for perfection, but for the things that I don't even see how they can pull off.

I love that. I really like the company, but I don't like it at this price. Disney, I like the company, I own it, and I think that they have a potential for upside if they play their cards right. The key is they have to play their cards right. They I mean, we live in the entertainment world. Content is king. I mean, you know, if you have the content and you can figure out a way to package and deliver that content, then I think you are top of the heap.

And who has more control of content than Disney has? They haven't. They're still stuck in their old ways and some of the things they do. But if they can kind of put a new hat on and think about the content, a more effective ways of doing it, I think there's a lot of upside.

Netflix, Netflix. Again, it's I like the company, but I think that that the streaming business is approaching maturity. And at this point, it's know growth of users for Netflix is coming from emerging markets, especially India. And the problem with India growth is you're getting about three dollars a month per user, not 30 dollars and or 20 dollars. And that's, you know, that's it. So you use account could keep going up, but your revenues are not going to go proportionately.

Twitter, you know what? It's a tough one. Now, I think Twitter Twitter's always had potential, but it's like one of these kids you keep watching or pictures and their baseball team that potentially at 18, potentially 20 to potentially twenty five, you get to be thirty five. You can talk about potential anymore. So I'm waiting for something more concrete that would show me that they're willing to deliver on the potential. And now I'm still waiting.

At some point, demands be that any companies that you're especially excited about or you think that there's something, something we should discuss now?

It is it's it was interesting to see Airbnb and go public last year because I really like Airbnb as a company. Again, I think at today's prices they're vastly overpriced. But to me, I never say never. I mean, I actually have a limit by an every and be the only problem is my limit by price is a third of the price. I don't think I'll get there this month and next month, but I will have it on my watchlist because with these stocks have discovered that there's always ups and downs.

I mean, it's always a price at which you can get it. In contrast, I don't like I don't like their I don't like the business model. I don't think that that this I don't I don't think they have a particular edge over GrubHub Overeats or or any of the competition, to be quite honest. But they really pulled it off in twenty twenty in markets I think are over overexcited about their success of Wanya. A different type of question and I don't know.

Usually life isn't about what happens to you, it's how you react to what happens to you. For some reason, these markets have made me really anxious the last few days or the last few weeks.

And I don't I don't know if that's just my own body chemistry or if there's a reason to be anxious to you.

How do you register emotions around the markets and what's your general sense right now? Do you feel the same anxiety or is this just more like looking at a chart on a on a graph?

No, I can I can like it like a psychologist. I can diagnose why you're anxious.

And it's for I think people laugh at efficient markets.

So when you talk about a fish market, that's crazy, but you don't all believe in a fish market. The only question is when we think markets become efficient. In other words, when you buy an undervalued stock, how do you make money? Ultimately, the price has to adjust the value, which means markets eventually become efficient to have faith in that end, game changes. If you don't if you believe markets are just random games that there's nothing efficient about.

Then, no matter what kind of investor you are, you are, you get more nervous because there is no end game that kind of delivers your rewards, even if you did everything right. So when you see something like a game where you see the price go up and you know that there's absolutely no fundamental reason for Bitcoin and Bitcoin is just as bad a currency now as it was a year ago and 10 years ago.

And it was a terrible collectible because if you think about a collectible as Moeed, the opposite direction as financial assets, Bitcoin behave like very risky stock last year, not like gold. Mm hmm. So when you see the prices continue to go up, it shakes your faith in that end game being in your favor. And when that faith is shaken, I get what philosophy of about markets you can worry. You think I did all my homework, but now there's no guarantee I will get rewarded for it because markets are just random.

But my advice is this, too, shall pass. Markets have had a lot more staying power than all of us experts, gurus, et cetera, markets find their way back to a steady set. The process, a lot of people might feel pain. But I retain my faith, I mean, it's the essence of faith is it gets shaken and you come back and I tell people about a long time ago, I was lucky enough to listen to Mother Teresa speak.

And she said, every day I wake up and the question, the existence of God. And I said, if Mother Teresa can get up every day and question the existence of God, I can get up every day and question whether markets are efficient and that's OK. I can still have faith. So I think the essence of faith is will get shaken. But that doesn't mean you lose the faith. You have to rediscover a way of coming back with that faith, because without that faith, it just becomes another gambling exercise.

Professor asked automatons contributions to the field of finance have been recognized many times over the recipient of several awards.

The most impressive, in my view, he's been voted professor of the Year by the graduating MBA class five times during his career at NYU, amongst from the faculty of 190 190 people, in addition, a myriad of publications and academic journals.

Professor Damodaran is the author of several highly regarded and widely used academic on valuation, corporate finance and investment management. He joins us from his home in San Diego. Thanks very much. Thank you, Scott.