Defining the risk-free rate

Aswath Damodaran, Professor of Finance at NYU Stern School of Business, joins Wilf to reveal that he is more cautious of the equity market today than at any point in his career.

Because of this he has “more cash in my portfolio now than at any time in history”, and says this is a time to harvest profits gained in recent years as opposed to sowing more crops. He has recently sold his position in Nvidia accordingly. 

Aswath shares his core reason for market concern, including the erosion of trust in economic institutions, and the move from a post WWII economic world order to an as yet unknown future, which he argues the market is too relaxed about.

He is sceptical of both the companies making AI who have overspent on CapEx, AND the companies due to use AI, arguing that rather than deliver greater efficiencies they will erode profitability – “if everybody has it, nobody has it”.

However – he does not believe in trying to time the market, and he reveals his cash balance is 15% not 50%, and that he still holds 5 of the Magnificent 7, his favourites being Apple, Amazon and Alphabet. 

Aswath shares many of his core investing principles including how you know when to sell a stock as well as when to buy it; why buybacks have done more good than bad; why we should listen to what the gold surge is telling us even if gold cannot be valued, only priced; and why you must view investing as a way to preserve and growth wealth not to get rich.

There is also some life advice too - the importance of idling, and finding space to dream. 

You can watch the full video on The Master Investor Podcast YouTube channel

And follow @WilfredFrost on X and Linked In

Sponsored by BNY Investments, Interactive Brokers - ibkr.com/masterinvestor and London Stock Exchange Group (LSEG). 

The Master Investor Podcast is produced by Paradine Productions, Master Investor Ltd in association with Bird Lime Media.

This podcast is for information purposes only. It does not constitute an invitation or inducement to engage in any investment activity. It is not a financial promotion as defined under section 21 of the Financial Services and Markets Act 2000 (FSMA). The views expressed by the presenter of this podcast are those of the presenter and are provided in the course of journalism. This podcast benefits from the exemption under Article 20 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (FPO), It does not require approval by a person authorised under the FSMA. Generic information, not identifying any specific investment, fund, provider or service, about a class of investments such as shares, bonds, derivatives and cryptoassets, might be provided and/or discussed during this podcast. Such discussion falls within the generic promotions exemption (Article 17 of the FPO). Such discussion is not a financial promotion requiring approval by an authorised person under section 21 of the FSMA. Investing involves risk. You should consult a suitably qualified adviser who can assess your individual circumstances before making any investment decision.