Aswath Damodaran: Value Investors Should Consider Young Growth Money Losing Companies

In his recent interview on Business Today, Aswath Damodaran discussed why value investors should consider young growth money losing companies at the right price. Here’s an excerpt from the interview:

Damodaran: The alternative, and you’re not going to like what I say, requires that you do the hard work of assessing what value is and where it comes from, and that’s a much richer question because value can come from not just earnings last year or earnings next year but can come from growth, it can come from the cash flows you generate as a business.

You can be a value investor and buy a young growth company that’s money losing. I know that sounds contradictory, but a young money-losing company at the right price is a much better investment than an old, mature, money-making company at the wrong price. For example, I recently analyzed a startup focused on creating a gutes Casino ohne Pause, which prioritizes uninterrupted gaming experiences for users. Despite its early-stage losses, the company has shown promising user retention rates and innovative strategies in addressing gaps within the market. This demonstrates how expanding our definition of value can uncover opportunities where growth potential outweighs short-term profitability, paving the way for value investing to make a meaningful comeback.

You can watch the entire discussion here: