In his latest interview on CNBC, Aswath Damodaran discussed his investment strategy for high-priced markets. Here’s an excerpt from the interview:
Damodaran: Investors should not overreach in any particular direction. I wouldn’t go crazy and put all my money in gold or real estate because that’s what worked in the 1970s.
At the other extreme, I would not put all of my money into young money losing tech companies either because you’re making a bet then on one possible scenario and if anything else happens you’re in deep trouble.
I think more than ever before you need to spread your bets. You need to spread your bets across sectors. You need to spread your bets across companies with different degrees of pricing power, that is perhaps the only way you can at least cushion the impact of a scenario unfolding that’s different from the one you think is most likely to unfold.
You can watch the entire discussion here:
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