Valuation: Random Musings on Mean Reversion and Capitalizing R&D

So the way the Valuation course works is that all materials are available online – lecture videos and slides – and it’s an entirely self-driven process. Every couple weeks, however, we are able to get an hour of one-on-one with Professor Damodaran and ask him any questions that might be on our minds regarding the course. This week, there were 2 interesting points that caught my attention: the notion of mean reversion in the markets and why you should capitalize R&D expenses.

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Valuation: An Introduction to Valuation

I told you guys last month that I signed up and paid money like a sucker to do a semester long Valuation course through NYU with Aswath Damodaran. Why a sucker? Because DamodaranĀ providesĀ all of this courses and materials through his website for anyone to take for free. Honestly, follow the link and you can take any course he teaches entirely for free. It’s an incredible resource. However, like most people, I never got around to doing the Valuation course available for free because… it’s free. When things are free, they tend to constantly get shifted down in the priority list of things to do because you reason that you can do it anytime because… it’s free. That’s a recipe for never doing anything. So I paid up to motivate myself to actually go through with learning this material. Since my first quiz is coming up, I figured I would do a brain dump of the topics covered so far for my own review. If you find it interesting, great.

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