
Aswath Damodaran: Globalization Backlash
In his recent article, NYU professor Aswath Damodaran shares his thoughts on how politics, globalization, and disruption has changed the investing landscape.
You are here: Home || All posts || InvestorNews || François Rochon: Never Overpay – Even for The Best of Companies
In this interview, Francois Rochon, CIO of Giverny Capital, discusses how a handful of dominant companies—such as Amazon, Apple, Microsoft, and Nvidia—have significantly influenced the S&P 500’s performance in recent years. Their rapid growth has increased their weighting in the index, encouraging more investors to adopt indexing strategies, which further reinforces their dominance.
Rochon also cautions against the dangers of overpaying for even the most successful companies, drawing parallels to the tech bubble of the early 2000s. He uses Cisco Systems as an example, noting that its high P/E ratio in 2000 constrained long-term returns despite strong earnings growth. Additionally, Rochon emphasizes the difficulty large-cap companies face in maintaining high growth rates due to the law of large numbers.
So there’s a danger of overpaying for even the greatest companies. The law of large numbers makes it, at some point, much harder to compound at 15% per year. You need another trillion of market cap addition in the next five years to justify 15% growth. So, when it trades at 30, 35, 40 times earnings, I mean, the street expects high growth rates.
And at some point, it’s going to be just impossible to continue at those high rates. But so far, they’ve [Amazon, Apple, Microsoft, and Nvidia] been incredible performers.
Share the news
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
In his recent article, NYU professor Aswath Damodaran shares his thoughts on how politics, globalization, and disruption has changed the investing landscape.
In this interview, Bill Nygren reflects on his career mistakes and lessons learned. These insights highlight the importance of balancing conviction with caution in investing and the need for value investors to adapt their strategies to include companies with significant intangible assets.
In this interview, Howard Marks shares his investment philosophy and lessons learned over his 55-year career, including contrarian investing, value versus quality and the inevitable market cycles.
In this interview at the 2025 MOI Global, Mohnish Pabrai shares insights on his investment philosophy and current market perspectives. The conversation covers various industries and investment approaches, with particular focus on cyclical businesses and special situations.