Prof G Markets: Third Quarter Review — with Aswath Damodaran

Future Prospects

Aswath Damodaran explores the complexities of valuing Tesla, emphasizing the importance of distinguishing between possibilities, plausibilities, and probabilities. He notes that while Tesla's side businesses, like robo taxis, are gaining plausibility, others remain speculative. "I've said, look, I'm willing to listen to your story, but I want to make sure that the story doesn't become a fairy tale," he remarks, highlighting the challenge of attaching realistic numbers to emerging business narratives 1. Scott Galloway adds that traditional automakers and energy companies may offer value on a risk-adjusted basis, despite their less glamorous profiles compared to Tesla 2.

   

Intangible Assets

The discussion shifts to the valuation of intangible assets, with Damodaran using Birkenstock as a case study. He argues that intrinsic valuation should naturally incorporate intangibles like brand value and management quality. "If you do a good intrinsic valuation, all the intangibles should be in there," he asserts, challenging the traditional accounting focus on tangible assets 3. Damodaran also highlights the role of intangibles in companies like Tesla, where figures like Elon Musk significantly impact perceived value 4.