Catch up on Aswath Damodaran videos in minutes

Interest rates in 2026 have seen a noticeable upward drift, with long-term rates approaching two-decade highs. However, when viewed against a longer historical backdrop, these rates are closer to historical norms than the exceptionally low rates experienced between 2008 and 2021. The market's perception of 'high' rates is often framed by recent memory, overlooking broader historical trends. This normalization is driven by factors like inflation and real growth, rather than solely by central bank actions. The future direction of rates will likely be more influenced by inflation dynamics than by central bank policy alone.

Every business faces a fundamental choice: prioritize scaling up to capture market share or focus on building a robust business model that ensures profitability. While these goals can align, they often present a trade-off that requires strategic decision-making.

AI has become an undeniable force, permeating business, investing, and personal conversations, reminiscent of past technological shifts like PCs and the internet, but with a greater sense of pervasiveness.

Leo Aschenbrenner's hedge fund, Situational Awareness, achieved extraordinary returns of 367% in a short period, positioning him as a potential investing prodigy. However, this success rapidly unraveled, leading to the fund's liquidation within weeks, losing two-thirds of its public equity value.

Tim Cook's tenure as Apple CEO, while often overshadowed by Steve Jobs' visionary legacy, has been marked by a strategic 'restraint' that preserved the company's financial health and shareholder value. This approach, characterized by disciplined capital allocation and a focus on operational excellence, contrasts sharply with the disruptive innovation often associated with Jobs.

Aswath Damodaran's initial valuation of SpaceX was based on limited, narrative-driven data. The post-prospectus analysis incorporates detailed financial statements, revealing that while operating and balance sheet numbers were largely as expected, the prospectus provides crucial clarity on revenue mix and cash flow. The core valuation remains stable, but the underlying business dynamics are better understood.

The imminent public offerings of SpaceX, OpenAI, and Anthropic, with potential trillion-dollar valuations, have sparked a parallel debate about their inclusion in the S&P 500. While these companies will undoubtedly rank among the largest, arguments against their inclusion stem from active investors fearing passive investing's dominance, academics warning of risks to small investors from potentially overvalued companies, and politicians concerned about enriching billionaire founders.

Country risk, once overlooked, is now an unavoidable factor in financial analysis. Initial assumptions that businesses could avoid emerging market risks or diversify them away have proven false due to globalization and increased correlation of risks across markets, especially during crises.

The SEC's proposal to shift from quarterly to semi-annual reporting and the idea of reducing Federal Reserve guidance both aim to remove 'news' that markets have become accustomed to using for price discovery. Advocates argue this reduces short-termism and market gaming, while opponents fear increased volatility and less informative prices.