Faith, Fear and Feedback: Ready for the Valeant Test?

Aswath Damodaran, a renowned valuation expert and NYU Stern professor, walks through his real-time decision-making process regarding a Valeant investment gone wrong. In May 2016, he purchased Valeant at $27 per share, valuing it at $44. By November 2016, the stock had crashed to $15—a 44% loss from his entry price and a 66% decline from his valuation target. Rather than offering a neat conclusion, Damodaran uses this case study to explore the psychological and analytical tensions investors face: faith in their thesis versus fear of further losses, and how to interpret negative feedback from the market. The episode title 'Faith, Fear and Feedback' directly frames these three competing forces. Damodaran explicitly invites listeners to judge whether he is letting hope override common sense in his reasoning about whether to abandon, hold, or add to the position. The webcast is accompanied by detailed slides and a blog post, suggesting a rigorous analytical approach. The format appears to be Damodaran reasoning through the decision aloud, likely drawing on his valuation framework and experience as an investor-educator. The episode is relatively short at 20 minutes, which limits depth but keeps focus tight. Valeant itself became a cautionary tale in investing—the company faced accounting scandals, drug pricing controversies, and management issues that justified the market's harsh repricing. Damodaran's willingness to examine his own potential cognitive biases (hope overriding sense) adds intellectual honesty to what could have been a defensive post-mortem. The episode does not appear to feature a guest; it is Damodaran's solo analysis. The takeaway is less 'here's what to do' and more 'here's how to think about a deteriorating position,' which is more introspective than prescriptive.

Verdict: A credible, intellectually honest case study from a top valuation expert that models real-time decision-making under uncertainty; limited by its brevity and introspective rather than prescriptive tone, but valuable for investors learning to manage cognitive bias.

Business rubric

• Actionable takeaways 3/5 20%

  Listeners gain a framework for re-evaluating a thesis under pressure (faith vs. fear vs. feedback), but the episode doesn't prescribe specific steps; it models reasoning rather than offering rules.

• Evidence over hype 4/5 20%

  Damodaran grounds the discussion in his actual valuation ($44 target), real prices ($27 entry, $15 current), and references detailed slides and a blog post; lacks external data on Valeant's fundamentals but shows his work.

• Guest and host credibility 5/5 15%

  Aswath Damodaran is a world-recognized valuation expert, NYU Stern professor, and prolific author; he is speaking from direct investment experience and proven analytical rigor.

• Substance 3/5 15%

  A 20-minute solo analysis of one investment decision is lean; the episode likely covers the core tension (faith vs. fear vs. feedback) but has limited room for deep exploration, examples, or alternative scenarios.

• Delivers on its title 5/5 15%

  The title 'Faith, Fear and Feedback' directly names the three forces Damodaran explicitly examines in deciding whether to hold, abandon, or add to Valeant; the episode fully addresses what it promises.

• Value for time 4/5 15%

  20 minutes is tight and focused on a single, concrete case; the pacing likely works well for the scope, though some listeners may want more depth or resolution.

How we score Business

Worth it if you are an investor or student of valuation who wants to see how an expert reasons through a deteriorating position and wrestles with hope versus evidence.

Based on the episode description. AI-generated; it can be wrong.