This is going off-topic, but I was referring to Damodaran's technical/academic expertise/understanding of how to build financial models. I am not saying that he is the best predictor of the future. So completely different definition of "most respected name in financial modeling".
JC called him out that Damodaran did the model wrong, and came up with a flawed PT. JC tried saying that internally generated cash is free, while the whole irony was that JC was the one who did not understand how to build financial models properly, because that cash has a cost to shareholders.
In am not arguing that Damodaran knows how to model TSLA. Because he clearly does not understand the company and it was an academic exercise for him anyway.
I think this actually very on topic to Tesla investors' interest in understanding the long term fundamentals of the company.
There are various people out there who by reputation and/or having a huge platform to get out their message project starkly misleading ideas about evaluating Tesla's long term fundamentals. I think part of improving as an investor is learning first hand that
you have to understand the long term fundamentals of any business you invest in for yourself, and not rely on the "reputation" or "expertise" of someone else.
What were Moody's and Standard and Poor's reputation pre 2008? The "gold standard" in rating debt?
As John Wooden said "your character is what you really are, your reputation is merely what others think you are."
Here's a few quick examples of people, including Damodaran, whose reputation and/or platform have led many off the path with Tesla.
Jim Cramer may have a shaky reputation, but he's got one massive platform. He has engaged in essentially a propaganda campaign of repeating ad infinitum that Tesla is a "cult stock" and "you can't value the darn thing." Both are nonsense, but undoubtably have thrown many off from making the effort to look at the long term fundamentals... realize that Tesla is a rare company you can actually see a highly probable path to tremendous earnings growth 5 and 10 years out; earnings that say the stock was a great buy when he started claiming it can't be valued, and is at a minimum worth holding at current values. I doubt that this man who publicly said in the hedge fund business the last thing you ever want to do is tell the truth (happy to provide the link again to video of him saying this if you like) has accidentally been saying you can't buy this stock on fundamentals over and over and over, when that is simply not the case.
Aswasth Damodaran Implied credibility and objectivity of being an academic, reputation you've suggested of being the top global academic expert on valuation paired with a more modest platform (his blog) which at times becomes a large platform... for example when his Tesla valuation call of ~$65 and months later ~$120 got written up in the Wall Street Journal, led to appearances on CNBC about Tesla being overvalued, and made the rounds of repetition in the other financial media outlets.
What we can now see of Damodaran's output on Tesla tells me I'd take what he says with as much skepticism as I take what Cramer and John Lovallo (see below) say.
When he wrote his blog saying Tesla was worth ~$120 I had a pretty thorough back and forth with him where he explicitly stated his valuation was based on Tesla needing to spend $50 billion on capex in the next 10 years to get up to revenues in his model suggesting 1 to 1.5 million vehicles/year (he never explicitly shared his unit sales assumptions), and that this would mean they'd have to more than double their share count to raise that money; that is, he directly said he saw Tesla's 2024 share count reaching 300 million. I went through with him what they would need in capex through his timeframe (outlining and offering back up on projected costs for additional service centers, stores, vehicle factories and battery factories), and it wasn't even half of the $50 billion he claimed... in fact it was so much smaller, retained earnings are likely to fund the lions share of it.
He wrote back basically a ~"I see what you are saying, looks like you may be right. I'm going to have to look at this some more independently... though I have to look at the competition this opportunity would draw" at the time. When I raised the question again this week, he gave me basically, ~"now that Elon has given away the battery patents, the story of them being an EV company and battery maker has been undercut. I don't know what they are about."
Sleepy, frankly that response is even less appealing than Cramer's "I don't know how to value the darn thing"... do you really think Damodaran doesn't know whether Tesla has an opportunity in EVs and batteries in general because of the patent move? While this current "I don't know now what Tesla's worth" stance is much like what Cramer has done, unlike Cramer, he publicly said in the past that he could value the stock and that it was overvalued. He did this a couple of times, and appeared on CNBC to say it. If his goal was to convey what he thinks about the company, don't you think it would make sense to put out a blog pulling back his earlier valuations? That is saying something like "I was premature in making valuation calls on Tesla in the past... it's not a business I feel confident in determining a valuation for."
I'd say what we've seen from Damodaran is analogous to Alex Rodriguez. Lots of talent, but I wouldn't take what's been produced at face value.
John Lovallo (and the pitfall of wall street analysts in general) their position at large institutions gives both a reputation and platform advantage to all the analysts. Without going into great detail on Lovallo, he's made some statements it's hard to believe anyone having spent more than an hour learning about Tesla's and the potential for EVs as a whole could make. Some have wondered if he's lacking in brain power, some have wondered if he's got an ulterior motive. I think it's more the latter... this could of course be financial, but it can also involve ego. The point is Wall Street analysts are fully capable of writing "bizarro world" reports on the company they cover, and should not be taken at face value. Again, to me what brings it all back to the topic of this thread is you want to understand the long term fundamentals well enough for yourself not to go on someone else's say so who may be presenting a really insightful picture of a stock or a "bizarro world" fakery.