Aswath Damodaran: Buying Opportunities In Facebook And Apple

Aswath Damodaran: Buying Opportunities In Facebook And Apple

The Dean of Valuations, NYU Stern’s Aswath Damodaran, breaks down buying opportunities in Facebook and Apple.

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Aswath Damodaran: Buying Opportunities In Facebook And Apple

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The Dean evaluations joins us now with those insights and where you Sternes Oswald tomorrow. Nice to have you. Right let's start with Facebook. Up Today. You know a lot of people out there say it's cheap but it's very hard to navigate when you're in the. Swarm of potential regulation and criticism that they are in right now isn't it. Well. I think Facebook's biggest problem to politically at this point in time they have no friends on either side of the spectrum.

And that's a pretty dangerous place to be if you're a big company. So I think Facebook has shown it's pretty inept at dealing with politicians. And I think it's got to get better. But fundamentally if you look at its business the business itself remains a solid one. I think it's going to be able to deliver its advertising revenues. But the politics are going to get in the way at least in the near term.

And you don't believe that all this criticism is actually going to. Contribute to people leaving the platform. In numbers that start to actually add up to be a concern for advertisers.

I don't think so. I mean I think people talk about leaving but you look at the actual numbers of people who are leaving are becoming inactive. Those numbers are small and it's not as if the competition is kicking up it's not as if there is some other social media company out there that's offering privacy and a subscription of Condit's taking off. So until you see something like that happening I think the fundamental business will remain a profitable one.

As well. The worst performer in the Dow this month is Apple down almost 19 percent. Is that a buy here or still steer clear given all the concerns around shipments.

You know the apple is a company that for the last six years the story has remained the same. It's a slow growth cash machine. That gets most of its money from a smartphone. Unfortunately though the market seems to be manic depressive when it comes to Apple getting over optimistic after an iPhone release or all the pessimistic when something bad happens wearing those one of those pessimistic faces. Now I would buy Apple because to me the cash flows are there and I can see it continuing to go back to that steady state. I mean I sold short on Apple 3 months ago at 230. I'd be willing to buy 175 180. I think it's a good buy.

Jacob Wolinsky is the founder of, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at) - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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