In the talk below Professor Damodaran lays out four simple propositions about valuation.
1 - Valuation is not an extension of accounting because valuation does not deal with historical events, it is about predicting the future.
2 - Valuation is not just about modelling numbers in spreadsheets, it must include a narrative that binds the numbers together.
3 - Valuing an asset or business is very different than pricing that asset or business.
4 - Luck plays a disproportionate role in whether you make money off of your valuations
