Aswath Damodaran (Youtube)
Chapter/Session 9: Valuation and Pricing 101
Session Description: In this session, I start by contrasting valuation, where we attach a number to an asset, based upon its cashflows, growth and risk, and pricing, where we decide how much to pay, based on what other investors are paying for similar assets. In the context of intrinsic valuation, I look at the drivers of value and then examine why the importance of the drivers can change as companies move through the life cycle, and in the context of pricing, I examine why pricing metrics and peer groups can shift across the life cycle.
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/CLC/slides/Ch9.pdf
Exercise:
a.     Estimate the historical values for revenue growth, margins and reinvestment (sales to capital) for each of your firms.
b.     Estimate at least three pricing multiples for each of your firms, with a mix of equity and enterprise value ratios.
c.     Find peer group companies for each of your firms, with median (and average) values for the pricing multiples of your choice.

Aswath Damodaran (Youtube)
Chapter/Session 10: Valuing and Pricing Start-ups and Young High Growth Firms
Session Description: In this session, I look at why the absence of historical data, the lack of a working business model and the uncertainty about survival and success make valuation more challenging at young firms and start-ups, and why the payoff to making your best estimates, in the face of these challenges, is so large. I then examine the process of valuing and pricing a young firm or start-up, and techniques that can be used to face up to the uncertainty in your estimates.
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/CLC/slides/Ch10.pdf
Exercise:
For the youngest company in your peer group:
a.     Given what you have learned about your company, what is your valuation story?
b.     Does your valuation story pass the 3P test?
c.     How does your valuation story play out in your valuation inputs (revenue growth, margins, reinvestment, and risk)?
d.     Given these valuation inputs, what is your valuation for the company?
e.     How uncertain are you about this valuation? How do you deal with this uncertainty?
f.      Is there any optionality in this company? If yes, why and what drives that option’s value?

Aswath Damodaran (Youtube)
Chapter/Session 11: Valuing Growth Firms
Session Description: In this session, I examine the big questions involved in valuing high-growth firms, with established business models, but where the key question becomes one of whether and if yes, how much, a firm with strong past growth can continue to grow. I also look at pricing high growth firms, where the key difference to control for is in expected growth.
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/CLC/slides/Ch11.pdf
Exercise:
For the high growth company in your peer group:
a.     Given what you have learned about your company, what is your valuation story?
b.     Does your valuation story pass the 3P test?
c.     How does your valuation story play out in your valuation inputs (revenue growth, margins, reinvestment, and risk)?
d.     Given these valuation inputs, what is your valuation for the company?
e.     How uncertain are you about this valuation? How do you deal with this uncertainty?
f.      What is the value that growth is adding (or destroying) in your company?

Aswath Damodaran (Youtube)
Chapter/Session 12: Valuing Mature Firms
Session Description: With long financial histories, and settled business models, firms in their mature phase should be easiest to value and price. That said, in this session, I look at the questions of how best to deal with the effects of changing the management of a mature firm, as well as imminent disruption of the core business. I argue that all mature firms can be valued for the status quo (existing management) and with change, and that the expected value of control stems from the difference between the two values.
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/CLC/slides/Ch12.pdf
Exercise:
For the mature company in your peer group:
a.     Given what you have learned about your company, what is your valuation story?
b.     Does your valuation story pass the 3P test?
c.     How does your valuation story play out in your valuation inputs (revenue growth, margins, reinvestment, and risk)?
d.     Given these valuation inputs, what is your valuation for the company?
e.     How uncertain are you about this valuation? How do you deal with this uncertainty?

Aswath Damodaran (Youtube)
Chapter/Session 13: Valuing and Pricing Declining Firms
Session Description: In this session, I argue that valuing declining firms is daunting, since the value you attach to a business is very much a function of whether you believe that the management of these firms is in denial, acceptance or actively working towards a rebirth. I also look at pricing a firm with declining revenues and margins under pressure is different, with both healthy and declining peer group companies in the mix.
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/CLC/slides/Ch13.pdf
Exercise:
For the declining company in your peer group:
a.     Given what you have learned about your company, what is your valuation story?
b.     Does your valuation story pass the 3P test?
c.     How does your valuation story play out in your valuation inputs (revenue growth, margins, reinvestment, and risk)?
d.     Given these valuation inputs, what is your valuation for the company?
e.     How uncertain are you about this valuation? How do you deal with this uncertainty?

Aswath Damodaran (Youtube)
Chapter/Session 14: Investment Philosophies 101
Session Description: In this session, I start by describing an investment philosophy as a set of beliefs about market behavior and misbehavior which translate into market mistakes that you try to exploit as an investor, and go on to contrast investment philosophies that are odds with each other - value versus growth investing, momentum versus reversal trading, market timing versus stock selection. I then look at how different investment philosophies lead you to companies at different stages in the life cycle, and why you should be aware of these links, as an investor.
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/CLC/slides/Ch14.pdf
Exercise:
a.     Are you an active investor?
b.     If yes, what types of mistakes do you think markets make, and why? If no, why not?
c.     What investment strategies do you use (or plan to use) to take advantage of those mistakes?
d.     What are the weakest links in your investment philosophy/strategies?
e.     Do you have an investment track record? Have you earned more than you would have as a passive investor (buying index funds)?

Aswath Damodaran (Youtube)
Chapter/Session 15: Investing in Youth
Session Description: In this session, I look at the investment philosophies (and strategies) most focused on young and high growth companies, starting with venture capital and then moving on to public market growth investors (and traders). I argue that to be successful with companies at this stage in the life cycle, you need to be a good judge of both narratives (company stories) as well as people (founders) and be willing to live with uncertainty and error.
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/CLC/slides/Ch15.pdf
Exercise:
a.     If you had the capital and the capacity, do you think you would be a successful venture capitalist? If yes, why? If no, why not?
b.     As a public market investor, what approach to investing in growth companies offers the best odds for you? Why?

Aswath Damodaran (Youtube)
Chapter/Session 20: Lessons for the Road
Session Description: In this session, I wrap up by looking at lessons for managers, as companies make their way through the life cycle, as well as for investors, navigating the same path. I end with suggestions for regulators and policy makers on how to approach disclosure and corporate governance for firms at different stages in the life cycle.
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/CLC/slides/Ch20.pdf
Exercise:
Given what you have learned about each of your five companies across the dimensions, has your view about where each of them falls in the life cycle changed? If yes, in what way and why?

Aswath Damodaran (Youtube)
Chapter/Session 19: Aging with grace!
Session Description: In this session, I look at the choices that managers face when put in charge of declining firms, starting with acceptance (where they accept aging and act accordingly) and why management fights that path so much. I also look at the more alluring paths of revamps and rebirths, with examples of success, but with cautionary notes on difficulties on those paths.
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/CLC/slides/Ch19.pdf
Exercise:
For the declining company in your group
a.     What would denial look like (in terms of investing, financing and cash return policies?
b.     What would acceptance look like (in terms of investing, financing and cash return policies)?
c.     What would a revamp/rebirth look like (in terms of investing, financing and cash return policies)?
d.     Which of the above paths is the management currently running the company most likely to pick?

Aswath Damodaran (Youtube)
Chapter/Session 18: Managing across the life cycle
Session Description: In this session, I look at what top managers in businesses do, and how the skill sets annd mindsets you need in these managers will change as a company moves through the life cycle, turning on its head the notion that there is one prototype for a "great CEO". I also argue that a mismatch between a firm and its top management can be value-destructive, and that the odds of this mismatch have increased as company life cycles get compressed.
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/CLC/slides/Ch18.pdf
Exercise:
a.     Who is the CEO of each of your companies? How long has he/she been CEO and how did he/she get the position (founder, hired from outside, hired from inside)?
b.     Is your CEO matched to your company?
c.     If there is a mismatch, is there a response building to that mismatch (activist investors, proxy challenges)?

Aswath Damodaran (Youtube)
Chapter/Session 17: Investing in Decline
Session Description: In this session, I look at the investor groups, especially private equity and activists, who try to make their money by targeting companies in decline. In some cases, they do so, because the price is attractive, and in others, because they think that breaking up or even liquidating the firm can deliver more value than continuing as going concerns.
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/CLC/slides/Ch17.pdf
Exercise:
a.     If you had the capital and the capacity, do you think you would be a private equity investor? If yes, why? If no, why not?
b.     As a public market investor, what approach to investing in declining companies offers the best odds for you? Why?