Aswath Damodaran: Keep it simple but not too simple

In the latest interview with Everything Money, Aswath Damodaran talks about the art of keeping investing simple, but not too simple. Damodaran argues that we as investors should only add details to our analysis of companies when they are actually needed to make an informed decision. Something that can be quite challenging in a world almost drowned in information.

Especially as [Investors] get more technically proficient, the more access they have to data, it’s easy to get drowned in the details and lose perspective. So you constantly have to step back and say, “Does it make sense for me to add that layer of detail? Does it make me a better investor, or am I just doing this because it makes me feel better?” A lot of this is psychological.

You feel like you’re in control when you have a lot of data and you do more work, but sometimes you’ve got to let that need for control go and say, “Look, this isn’t helping me as an investor. It’s making me feel more secure, more confident, but it’s really doing nothing for my investing.”

Share the news

Disclaimer of liability

The above has been prepared by Børsgade ApS for information purposes and cannot be regarded as a solicitation or recommendation to buy or sell any security. Nor can the information etc. be regarded as recommendations or advice of a legal, accounting or tax nature. Børsgade cannot be held liable for losses caused by customers’/users’ actions – or lack thereof – based on the information in the above. We have made every effort to ensure that the information in the above is complete and accurate, but cannot guarantee this and accept no liability for errors or omissions.

Readers are advised that investing may involve a risk of loss that cannot be determined in advance, and that past performance and price development cannot be used as a reliable indicator of future performance and price development. For further information please contact info@borsgade.dk

You might also find this interesting:

Michael Mauboussin: Everything is a DCF Model

In this article, Michael Mauboussin argues that whenever investors value a stake in a cash-generating asset, they are essentially using a discounted cash flow (DCF) model, whether explicitly or implicitly.

Aswath Damodaran: Nvidia And The Power Of Expectations

In this article, Aswath Damodaran delves into the complex interplay between corporate earnings reports, market expectations, and stock price movements, using Nvidia’s recent earnings announcement as a case study.

Guy Spier: A Masterclass On Building Wealth, Wisdom & Success

In this interview, Guy Spier covers a wide range of topics, blending practical investing advice with broader life lessons and philosophical insights. Guy emphasizes the importance of long-term thinking, personal growth, and maintaining a balanced perspective on success and happiness.