Damodaran outlines a three-step process for developing a personal philosophy:
Form a point of view on how markets work and where they are likely to break down.
Every asset generating cash flow has an intrinsic value that can be estimated. Investment Philosophies By Aswath Damodaran Pdf
Markets are generally efficient but fail during periods of extreme uncertainty or change.
Choose a philosophy that aligns with your specific risk aversion, time horizon, portfolio size, and tax status. 3. Key Categories of Investment Philosophies Damodaran outlines a three-step process for developing a
Minimize self-inflicted damage by spreading bets (diversification), acting rarely (low turnover), and staying away from personal weaknesses. 2. The Development Framework
Damodaran categorizes approaches based on their view of the "gap" between price and value: acting rarely (low turnover)
Master the basics of risk measurement and valuation.